eBay ended that loophole long ago, this topic has been lying dormant for five years.

The total item value (price + postage) is used for tax purposes (both eBay's cut and GST). So in other words, $11 + $8.95 postage is exactly the same as $19.95 with "free" postage. eBay won't actually allow people to list items with significantly higher postage than the item price, it comes up with an error message and won't list at all.