The first step is to actually do something about the ridiculous gouging that Australian's are subject to across almost all sectors.
The next step is to understand how much of the current spending on overseas shopping would actually end up being spent here in the ideal (from their point of view) case that the threshold is removed entirely.
In many cases, adding the GST would still leave the overseas option cheaper. In other cases, the reason for buying from OS is not cost but selection. In both these instances, people would still buy overseas so the goal of making the local market more competitive is a ruse - the aim is tax revenue. It has nothing to do with helping Aussie businesses and they know it.
If you can buy a pair of jeans from the US for $70 AUD and have them delivered here for an extra $10 AUD then slapping a 10% GST on that is hardly going to get buyers to shop locally when the same item costs $180 AUD here.