I have a different view. When the GST was introduced back in 2000, online buying was in its infancy and very much a novelty. Most of the large online retail platforms (eBay, Amazon (in its early days it was principally a bookstore) etc) didn't really exist.
In 2000, virtually all shopping was done in local brick and mortar stores (with exception of those who travelled and enjoyed a $1000 goods exemption). GST income was easy to regulate and manage.
Before the dotcom crash in the late 1990s, business spruiked that everything would be done online (and why company valutaions became unrealistic). The dotcom crash, indicated that that time, that the promoted endless opportunity of online business may not eventuate to that which had been outlined in the previous years. As a result, the house of cards fell down.
At the same time as the dotcom crash, the government was negotiating/introducing the GST. I expect that the policy makers at that time though that online shopping would not be a big problem for the tax base, and did nothing about it.
Move forward 15-20 years, and it is becoming a problem for the tax base.
There are Australian businesses which have set up shopping platforms specifically to avoid GST on sales, there are multinational companies who have major buying platforms located in other countries to avoid GST, the parcel/freight industry has been largely automated reducing time and costs of international postage etc etc. The has been a drain on the government's GST revenue base from the every increasing foreign and GST exempt online purchases.
The government has been playing with GST on all imports for many years. Business has only more recently joined the bandwagon as it could be seen as anticompetive (good of less than $1000 imported pay not GST but the same goods purchased in Australia pay GST). A competitive government policy would be to treat all transactions the same...that being what they propose to do.
It is likely that it will still be cheaper to buy many items from foreign platforms, where access to these platforms are readily available.
What is challenging is the cost of implementation of the sub $1000 policy. The costs to collect could be horrendous. It appears that the government are targeting online businesses to collect and pay the GST for good purchased from Australia but sourced overseas. While the costs of collection won't be any different to that which occurs for business located in Australia, there will still be loop holes as every business in the world won't be collecting/willing to collect the GST for the Australian Government.
Many foreign located smaller companies say those which, one may deal directly with say for small items which can be readily posted, won't collect the GST. For example, a small car parts business in Munich won't be applying Australian GST on a car water pump sent to Australia as they won't have the means or inclination to collect and pay the tax. They may chose to send the goods to Australia, or chose not to if they are worried about that Australian government taking some sort of action against them (which would be unlikely).
This is possibly where the system could potentially fail. It uses the Australian GST business model where the business pays the tax. This is okay in Australia, but not a good model for foreign based companies of any size. It will probably only suit the big ones while they chose to provide buying platforms for Australians.
I also believe that it is 'unfair' (gees I hate that word) to blame Gerry Harvey. We should possibly be blaming the government and senate back in the late 1990s/early 2000s when they were deliberating on the GST. It appears that they could not see far into the future and since them, all governments have been sitting on their hands.
If it was introduced back in 2000 or even 2010, I expect the reaction would be non-existent. I suppose since we (including me) have become use to our online shopping tax-avoidance practices, we are now unhappy with the changes which reduce this avoidance.