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The government can’t miss this business opportunity

Trevor Evans

by Trevor Evans

13 Nov 05:45am

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Filed under: Business, Gst, Online Shopping, Tax, Wayne Swan

86 comments

Rarely do governments have an opportunity to close a tax loophole and keep people happy at the same time. They’re almost as rare as chicken’s teeth.

This is a win-win, you say? Photo: AFP

That’s why when business groups come together to argue for a change to the tax system, which will raise more revenue, a smart government ought to seize the opportunity.

In recent weeks we’ve heard an emerging chorus of business leaders call on the Gillard Government to close a growing tax loophole which allows foreign online retailers to avoid collecting the GST when selling goods worth less than $1000 over the Internet.

Against a backdrop of declining state government balance sheets, state Treasurers have also come out in support of this reform. As a matter of fact, they just met to talk about changes to the tax system.

And there are some very strong, compelling arguments why the Gillard Government must force foreign online retail giants like Amazon, eBay and Macy’s to collect the same GST and duties that locals are obliged to collect.

1. According to the Gillard Government’s own GST review, it stands to recoup an estimated $4.2 billion in tax revenue by making foreign online retailers play by the same rules as everyone else.

The Gillard Government and its state counterparts are currently having a tough time finding the money needed to get their budgets in order and fund the services most people expect – services like education, health and law and order.

Federal Treasurer Wayne Swan is currently staring down a $43.7 billion hole in his budget bottom line and his state colleagues face similar fiscal challenges.

2. A tax free zone for foreign online retailers is bad news for Aussie businesses and jobs.

Ask almost any industry commentator and they will tell you that online is a big part of the future of retail.

And Australian retailers agree. That’s why they are investing heavily in online platforms to meet the changing demands of customers.

Companies like David Jones, Myer and others have invested more than $600 million in making it easier to shop with them on the net.

But the reality is, when the Gillard Government’s tax system creates an effective tax free zone for foreign online retailers, it undermines the ability of Australian companies to compete.

The Australian retail industry is currently one of the country’s largest employers, supporting the jobs of more than one million Australians.

But there is little hope of that being sustained if foreign online retailers continue to get a free ride.

In fact a report by Ernst and Young, which was commissioned by the National Retail Association earlier this year, found that a failure to address the tax imbalance between local retailers and their foreign online counterparts could cost the sector 33,400 jobs by 2015.

It’s been one of the great myths of this debate that this is an argument between bricks-and-mortar retail and the new online, a sort of high stakes battle between the past and the future.

This is not true. Regardless of whether a retailer is of the traditional variety or online, or a combination of both, so long as they are based in Australia they are at a competitive disadvantage compared to companies based on foreign shores.

It’s particularly soul destroying for the thousands of small Australian retailers and innovators out there who want to make a go of it selling their wares on the web. Our tax system is stacked against them in favour of foreign, online giants. And that ought to be corrected.

3. Many Australian businesses feel they’ve had a rough trot with the Gillard Government.

Some complain bitterly that changing government regulations have tied their businesses in knots, making it harder to turn a profit and to employ more people.

Here the Gillard Government has an opportunity to build some goodwill and help businesses do what they do best: create economic opportunities and jobs.

All it would take is a small but meaningful change to the tax system.

4. Unlike past battles over tax, this time business is on the government’s side.

The Gillard Government can rest assured that this debate won’t be like the row over its mining or carbon taxes.

Those were debates where businesses had some serious and legitimate concerns and every right to make their voices heard.

In this tax debate, the Gillard Government has the support of business in delivering change because it makes good business, economic and social sense.

So, let’s draw up a chair to the negotiating table and get this tax problem sorted in the interests of everyone concerned. It’s an opportunity too rare to pass up.

Comments on this post will close at 8pm AEST.

Most commented

86 comments

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    • acotrel says:

      04:59am | 13/11/12

      This is about transferring more money from the pockets of Australian consumers and into the bank accounts of opportunists like Gerry Harvey.  For years importers have fleeced us with markups which double and treble the retail price compared with that available overseas .  Sorry, the game is over, we now have other options, and applying GST won’t change that much.  In fact it will make people more determined than ever to always buy on the web.  Even with GST, it would still be cheaper - most of the markups have been obscene.. Tax and be damned !

      Reply

    • Black Dynamite says:

      07:52am | 13/11/12

      Agreed, Gerry Harvey can bleat as much as he wants how hard it is for retailers but it’s now time for him to realise his time is past and thankfully for him he can sell up and live off the enormous profits he gouged out of Australian consumers.

      BD

    • Gregg says:

      08:07am | 13/11/12

      Pleased to see you’re saying applying GST to online purchases is a good thing.
      It’ll certainly not end up in Gerry Harvey’s pocket and Harvey Norman just like any other organisation is a business that employs Australians.
      You do like to see more employed do you not!

    • dovif says:

      08:30am | 13/11/12

      Acrotrel

      Why does the ALP government want to destroy Australian business and Australian jobs. Do they and the Unions wants to destroy the Australian economy and our jobs?

      I much prefer to buy from Gerry Harvey then some tax cheat set up in the carribeans, because it create jobs in Australia, but this government seems to want to make is more expensive for Australian businesses

      For example, a foreigner can ship goods at 10% cheaper then Australian businesses, because they do not pay the GST, Foreign businesses also do not have to pay the Carbon tax, while Gillard’s lies handicaps all Australians by making us pay a Carbon tax that none of the company importing into Australia have to pay.

      It is time Gillard and the ALP start helping Australian business, instead of heaping one tax after another to handicap them

    • Andrew says:

      09:00am | 13/11/12

      It’s not a tax loophole. It’s international business.

      Australian stores don’t collect US sales tax when selling to Americans, so why should US stores collect Australian GST when selling to Australians?

    • Black Dynamite says:

      09:16am | 13/11/12

      Gregg - If Gerry Harvey was concerned about the levels of employment and not why he can’t buy another yacht I might show some empathy to his plight.

      BD

    • Paul says:

      11:48am | 13/11/12

      “Australian stores don’t collect US sales tax when selling to Americans, so why should US stores collect Australian GST when selling to Australians?”

      Actually, US sales tax is applied to goods above the value of $30.  You are correct that the Australian stores aren’t the ones levying the charge, it is done as the goods go through customs (we do the same for imported goods).

      And here is the point, we have the largest threshold value for GST on imports in the world… $30 is pretty much standard for most countries these days.  One thing our govt isn’t big on is protectionism.

    • Esteban says:

      12:03pm | 13/11/12

      There is a lot more to Australian retail than Gerry Harvey.

      If it is all about hatred and envy of the success of gerry harvey why not just introduce a special tax regime for Gerry Harvey. You could call it the gerry Harvey super profits tax and use it to spread the benefits of gerry harvey.

    • PJ says:

      02:54pm | 13/11/12

      Oi Where’s our Mining Boom?

      ah there it is, African Mining 2012 from recession at -16.8 percent growing to +32 percent this year.

      Swan will tell you Australia’s mining boom is suffering because of commodity prices. There’s some truth in that but look at Africa under those same commodity prices. +32 precent this year alone.

      So whats the difference between Mining in Africa and Mining in Australia?

      Australia is now the most expensive country to Mine in, thereby turning off investors.

      How is that possible?

      Gillard Government taxes; Carbon tax and MRRT.

      But the Gillard Government tells us we don’t need Mining, it only creates 2 % of our jobs directly?

      True but indirectly it’s effect is 10 fold as it grows all other economic sectors. Even though the future of Mining in Australia is waining, even the current mining operations running for a few years have contributed 17% to GDP.

      In Africa, there mining boom has grown their formerly recessed economy by 3%

    • Chris says:

      05:06am | 13/11/12

      Knowing the failure that is the Dullard government, they’ll still screw this up.

      Reply

    • Anon says:

      09:04am | 13/11/12

      Chris, I would expect the Gillard Governemnt to do abolutely nothing on this issue. Why:

      1. GST revenue goes to the states
      2. most states have Liberal /National party governments with big budget problems - there is a greater chance of Liberals/Nationas loosing government if they don’t have the cash to fund their promises.
      3. if the GST loopholes are closed or the rates raised the Federal Labor government will cop most of the blame from consumers.

      Never going to happen.

      The best retailers can hope for is the GST to kick in after $500 rather than $1000… and frankly that would be a smart way to kill off the issue politically.

      Interestingly I was charged GST by customs (as well as WET, customs duty etc) on about $250 of wine I imported from overseas (for a gift)...so it looks like the GST already applies to lower limits for some goods.

    • Borderer says:

      09:09am | 13/11/12

      Oddly enough the tax is already in place for importing goods into the country, you must pay GST on landing them. There is however a threshold on the value of the goods to determine a “Commercial Quantity”. This is all that needs lowering in order to collect the tax, the rest of the processes are already in place. Then retailers only need to be price competitive instead of ripping us off eight ways to Sunday.

      I agree though, if anyone could screw this up it would be Jules and Co.

    • stevem says:

      01:45pm | 13/11/12

      Actually, Anon, I think customs don’t find it worthwhile to collect small amounts and set a limit of $100. If more than $100 of tax was collectable they enforced the collection.
      If goods ONLY attract GST then the vaunted $1000 limit applies. If other taxes apply as well then the threshold would be less - if the combined tax was greater than $100

    • Old Fogey says:

      05:19am | 13/11/12

      As a retailer, I can tell you that competition from on-line traders hurts and has done so for a few years now.  And when I pay my BAS every quarter, it hurts even more to know that the competition isn’t making this payment.  I can’t understand why Swan won’t take the opportunity to prop up his shaky budget.  What is he afraid of?

      Reply

    • Andrew says:

      08:56am | 13/11/12

      Your competitors overseas are collecting their own local sales taxes on their local sales, just like you do here with the GST.

      If you want them to collect Australian GST, then are you also willing to collect and pay all the foreign sales taxes when you sell to overseas customers?

      I doubt it.

    • TimB says:

      05:24am | 13/11/12

      First things first, let’s start with the presumption that the playing field isn’t level purely because of the GST. This implies that the price difference between goods bought online from overseas and those bought here is a mere 10%. I think you’ll find that this is not the case and the GST issue is not even close to being the real reason why the Australian retail sector is being hammered.

      Two, let’s for arguments sake pretend that you are right. That it is the GST, that people are shopping overseas just to avoid paying this tax. That’s the critical point you’re overlooking and the one that undermines the premise of your entire article. It’s the Australian consumers who are avoiding the tax.  Not the retailers. They just collect it on behalf of the government.

      So when you sit there and claim that ‘Unlike past battles over tax, this time business is on the government’s side.’, you ignore the critical component. The voting public. The same public who you claim are going out of their way to avoid this tax. The same public whom the government will need to convince that this is a good idea.

      Do you see your problem yet?

      ...And of course the third point is the argument that the cost of red tape and compliance to the government to make sure that this revenue is being captured will far outweigh the revenue being brought in.  Now I don’t know how accurate this is, I haven’t seen the figures to support it. But for you article to make no mention of it at all…

      Methinks you’ve got a few issues to address before you start portraying this as a no-brainer decision.

      Reply

    • Fiddler says:

      08:02am | 13/11/12

      correct. I purchase a great deal of stuff off ebay because it is usually less than half the price of what I get it for in a store. GST won’t save retail.

    • Harryzo says:

      08:22am | 13/11/12

      I don’t see the problem with the voting public, The government routinely throws new taxes on us and we just have to take them. Alcopops tax is a good example of something that was put in, voted out and still used.

      Don’t even get me started on how single people with 0 kids get screwed every way possible.

    • TimB says:

      09:32am | 13/11/12

      I agree Harryzo, like I said, I believe the reason why people buy online has nothing to do with the GST and everything to do with the *way* cheaper prices (in excess of the GST difference).

      But given that the author seems to believe the lack of GST is the big carrot, then the internal logic of the article would imply that consumers will be pissed if the government closes the ‘loophole’. And its them, the voters who the government would have to pacify, not business.

      Basically the author trips over his own argument.

    • TheRealDave says:

      10:04am | 13/11/12

      I hate it when I agree with you TimB, other than our mutual love, affection and undying loyalty to the mighty doggies.

      It makes me feel like I jsut sat down and ate, with a spoon, the entire tub of Nutella that was meant to go on the kids school lunch…..again…


      wink

    • TimB says:

      12:36pm | 13/11/12

      Bwahaha Dave. That’s a good feeling. Embrace it wink

    • Craig says:

      06:04am | 13/11/12

      The attempt to add GST to foreign purchases is simply a vain hope by local retailers to stymie the tide of online shoppers choosing service, range and convenience over the childish online shopping efforts of Australian companies.

      Sure add the GST, no worries. It will help the tax base, but it won’t save local retailers who stubbornly refused to provide a quality and professional online shopping experience.

      BTW it is important to point out who Trevor Evans is - “CEO of the NRA, Trevor leads a national organisation that provides a range of professional services to industry and represents the interests of the retail sector (Australia’s largest employer) to governments, the media and the wider community.”

      In other words - he’s an apologist for local retailers, who prefer to lobby than deliver service.

      Reply

    • Sync says:

      06:14am | 13/11/12

      “That’s why when business groups come together to argue for a change to the tax system, which will raise more revenue, a SMART government ought to seize the opportunity.”


      Note the key word - SMART.


      Unfortunately, time and against the current (Gillard) government has proven it ain’t so smart.

      Reply

    • Macca says:

      06:23am | 13/11/12

      GST on imports ? Okay, but drop the Customs “fees” which more than double gov’t charges in many cases. Example, I purchased a camera from o’seas for $1100. Had to pay GST of $110 , and a Customs Dept inspection fee of about $150. Never happens on goods below $1000.

      Reply

    • morrgo says:

      09:55am | 13/11/12

      Now, inspection is necessary for the levying of the GST, and cost-recovery principles dictate that it be recouped from the customer.  The same would apply if the limit were lowered.

      And this is the hidden agenda of the retailers.  A $10 GST on a $100 purchase would not make it unviable, but also slapping an inspection fee will.

    • Gavin Mc says:

      06:29am | 13/11/12

      You forgot point 5. Simple arithmetic. On line price, approx 45% of retail price. Plus GST, makes it 49.5% of retail. I couldn’t give a fat rat’s freckle if I have to pay GST because our retailers still can’t compete on price, but I’m smart enough to know that the cost of collection will far out weigh the nett benefit. I shop on line to save money, not to avoid the GST and I’m sure most others do the same. Still, I like it when someone thinks that they have a simple solution to a complex problem. Or even better, an answer to a problem that doesn’t exist.

      Reply

    • dale says:

      06:35am | 13/11/12

      “According to the Gillard Government’s own GST review, it stands to recoup an estimated $4.2 billion in tax revenue by making foreign online retailers play by the same rules as everyone else.”

      You forgot how it will cost more to recoup this money then what they will collect.

      You also forgot that we pay an “australia tax” to australian retail where items are marked up by over 50%. if you think charging 10% on these prices will stop people buying online you are a fool.

      Reply

    • Rose says:

      09:32am | 13/11/12

      I think he also forgot that this is not a ‘Gillard government’ loophole, it is in fact a situation that was exactly the same as in the Howard era.
      He also needs to be aware that the condition of Australian retail is largely the fault of Australian retail, the higher mark-ups, the lack of customer service, the limitless range of products online and the absolute ease of internet shopping as opposed to the stress of visiting malls etc, paying for parking etc are more responsible for people buying on line than any piddly tax break.

    • Rosie says:

      06:35am | 13/11/12

      Oh no, it might end up like the mining tax, introduce a tax but later finds out later that it is a tax in name only because it doesn’t collect any revenue.

      Can we please get an expert to show Wayne Swan how it is done before the fanfare announcement followed by another ‘white paper thingy’ as proof that we should wait and not be disheartened for it will be done while Labor is in Govt.

      Reply

    • acotrel says:

      08:31am | 13/11/12

      ‘Oh no, it might end up like the mining tax, introduce a tax but later finds out later that it is a tax in name only because it doesn’t collect any revenue.’

      As an LNP supporter, why aren’t you pleased about that ? Do we have a subversive element in our midst ?

    • Joan says:

      01:57pm | 13/11/12

      acotrel

      Is Rosie a threat?

    • George New says:

      06:35am | 13/11/12

      Yeah, nah. Why do we continue to have these style articles promoting the continuing rip off of Australian consumers. Shipping individual items from OS costs more than the gst cost on locally sourced goods, but the savings are often more than 30-50%. The difference is in retailers with high overheads and distributors who charge high markups. Until we lose this idea that everyone in the food chain can go on making big money forever then overseas markets will always be attractive.
      A case in point are some companies who are offering their products at the same or cheaper prices than overseas - and they are still making good profits. These include electronics, cameras etc and show it can be done. Now we need the rest of the retail industry to wake up to the reality that they need to change!

      Reply

    • mick says:

      07:12am | 13/11/12

      in regards to the imposition of GST on overseas purchases,do retailers really think it will favour them??.Add 10% to the cost of importing most goods and you still save a heap on the over the top prices we are asked to pay in the so called lucky country.

      Reply

    • L. says:

      07:27am | 13/11/12

      Wasn’t the cost to collect this $4.2 Bill in tax costed at being more than the $4.2 Bill??

      Maybe we should have an investigation into ‘sole provider’ contracts which severely limit price competition and contribute hugely to Australian retail prices being +/- 80% more than the overseas retail price.

      Take a look at cars for example. The only people able to sell new BMW’s in Australia is BMW. That, by any measure is a monopoly.

      Reply

    • PsychoHyena says:

      10:05am | 13/11/12

      @L I don’t have an issue with say BMW being the only company allowed to sell their product. Making a law that disables that removes the incentive for businesses to make ‘store-brands’ which can either be better/worse than a more expensive product.

      At what point should the removal of ‘sole provider’ take place? Often companies produce all the components of a product themselves, which can then only be used in products produced by that company.

      Here’s another example, the company I make produces software where we are the only distributors (a multitude of reasons for this), are you saying that we should be enabling other companies to sell our product?

    • Modern Primitive says:

      11:27am | 13/11/12

      L, you’d be better off getting the government to relax their stupid protectionist laws on parallel imports for second hand over seas cars. Then all importers from Ferrari to Mazda would be forced to compete on price and service.

      The best example I can give is your stock standard 911. There’s no way a car which is $70k USD should be 200k here.

    • L. says:

      11:33am | 13/11/12

      “@L I don’t have an issue with say BMW being the only company allowed to sell their product.”

      Tell me why I should not be able to buy brand new BMW’s from a UK dealer at 1/2 price, and import them in for sale?

      Do you really think being held captive to a monopoly is a good idea?

      Jag XJ..Aust price $270K +

      Jag XJ.. US price $90K.

      Yeah, monopoly sales.. Great idea. (insert eye-roll here).

    • Steve of QBN says:

      12:18pm | 13/11/12

      @L, same thing on brand name motorcycle helmets.  I can save between $100 - $300 on name brand helmets if I bought from the US however, I cannot use the helmets here because they don’t have the Australian Standards sticker on them.  And that’s the ONLY difference in them.  Made in the same factory, made to the same specifications, passes all the same safety inspections, only lacking the AS sticker.

    • Ben C says:

      12:20pm | 13/11/12

      @ L

      “Tell me why I should not be able to buy brand new BMW’s from a UK dealer at 1/2 price, and import them in for sale?”

      Nothing to stop you, but remember one thing: Vehicle certification - will you bear the cost and the time to get these cars certified? If they don’t meet our regulations, will you bear the cost and time to get them altered so that they do, and in such a manner that the manufacturer’s warranty is not voided?

    • TimB says:

      07:35am | 13/11/12

      *sigh* another eaten post. Take 2.

      First things first, let’s start with the presumption that the playing field isn’t level purely because of the GST. This implies that the price difference between goods bought online from overseas and those bought here is a mere 10%. I think you’ll find that this is not the case and the GST issue is not even close to being the real reason why the Australian retail sector is being hammered.

      Two, let’s for arguments sake pretend that you are right. That it is the GST, that people are shopping overseas just to avoid paying this tax. That’s the critical point you’re overlooking and the one that undermines the premise of your entire article. It’s the Australian consumers who are avoiding the tax.  Not the retailers. They just collect it on behalf of the government.

      So when you sit there and claim that ‘Unlike past battles over tax, this time business is on the government’s side.’, you ignore the critical component. The voting public. The same public who you claim are going out of their way to avoid this tax. The same public whom the government will need to convince that this is a good idea.

      Do you see your problem yet?

      ...And of course the third point is the argument that the cost of red tape and compliance to the government to make sure that this revenue is being captured will far outweigh the revenue being brought in.  Now I don’t know how accurate this is, I haven’t seen the figures to support it. But for you article to make no mention of it at all…

      Methinks you’ve got a few issues to address before you start portraying this as a no-brainer decision.

      Reply

    • Gregg says:

      08:11am | 13/11/12

      Looks like it was eaten and spat out for you above TimB.

    • Haxton Waag says:

      07:47am | 13/11/12

      How in the wide world do you think this is going to “keep the people happy”? I am already annoyed. Also, how are you going to tax companies that have no physical presence in Australia?

      Reply

    • Knemon says:

      08:00am | 13/11/12

      Total rubbish, we can’t force a foreign company to collect GST on our behalf, plus it would cost more to administer than what they would collect. Even if the GST free status was cut back to zero on imported goods it would still cost more to administer than what is collected, there is a reason for the $1000 limit and it relates to our high administrative costs, remember, this is Australia not Fiji.  Mind you, customs brokers would have a field day if the $1000 limit was dropped to zero. I would suggest cutting the mark back to $500, even then I would say the costs associated with collecting the GST would far outweigh the revenue collected.

      Reply

    • Matt says:

      08:02am | 13/11/12

      How does this rubbish get published?  The Productivity Commission looked and this and found that the cost of administration was more than would be recovered by the tax…

      Reply

    • MK says:

      11:40am | 13/11/12

      This has always been a too hard/too costly to impose,
      as it was under the previous liberal government

      but it is a good chance to smear this current labor govmenrt and accuse them of being bumbling fools

    • Joel B1 says:

      08:05am | 13/11/12

      If Australian companies can’t make a profit being geographically closer to their market then that’s their problem.

      Reply

    • Made in USSR says:

      03:28pm | 13/11/12

      Indeed!  There should be a mystery there, somewhere…

    • pissed off says:

      08:15am | 13/11/12

      another pro retailer opinion that is a load of s…!

      1. if gst is added it will not be hindering the overseas sellers at all, with gst added, prices will still be over 20% cheaper and up to 200% cheaper depending on what it is and where you shop (200% is the truth, i do it every week)

      2. Retailers have been ripping off consumers for ever in this country, im sure they were exited about globalisation increasing their market, well you got lazy and left behind didnt you. retailers think they can buy a business and put their price on it and its a sure ticket for retirement, well not so.

      3. retailers are buying goods from overseas and selling them at greater markups than what they used to so what are they complaining about

      4. 90% of the time, price is not the reason for buying offshore.  it is the absolute lack of quality customer service in this country, very rarely do you find a place that serves you well in this country, when you do you hold on to them and support them as much as you can, even if it means paying extra.
      an example that happened last week, products purchased from sydney sent to gold coast, parts show up wrong parts, phone call, new parts show up, wrong parts, phone call, finally correct parts show up.  net result is this took over 2 weeks, i end up providing crap service for my customer, and it cost me twice what it would have if i had of brought over seas, and took 3 times as long.  ALL becasue i thought i would give the australian another go, and this was the third time, and the last.

      5.  What business does the CEO of national retailers association have in writing a story that is pro his cause, i thought the journalist were supposed to be unbiased, yet another example of the punches journos, writing articles pro their view

      Reply

    • Phil says:

      12:59pm | 13/11/12

      How could anything be 200% cheaper?  Are they paying you the equivalent of the Australian price to take the goods?

    • pissed off says:

      02:10pm | 13/11/12

      nice work phil, not very good at maths are you % doesnt have to go in on direction

    • Phil says:

      03:06pm | 13/11/12

      Sorry, but nothing can be 200% cheaper - where did you learn your maths?  If it is 50% cheaper, it is half the price, 100% cheaper it’s free, 200% cheaper they are paying you to take it.  Understand?

    • Steve says:

      08:31am | 13/11/12

      Trevor Evans,
      did you notice that there is only one comment that is agreeing with this article, and low and behold it is a retailer that thinks, the gst is to blame, i hope your ears are burning and you actually listen, if you want to help your retailers, then you should listen to George. i totally agree with his point about middlemen. This is the root cause of YOUR problem, teach the people that pay you to be CEO how to avoid the middlemen, the net result will be each retailer will create a new purchasing job, your prices can come down drastically and you can compete. THEN we can all buy off Australian retailers and we want to but you dont give us a choice at the moment

      Reply

    • Anubis says:

      08:59am | 13/11/12

      This is a prime example of Australian Markups. The Nikon D510 DSLR camera. At HArvey Normans this camera is $779. To buy it from Walmart in the US it is $579. Add GST makes it $636.90. Walmart offers free delivery, provides free shipping back to them should the camera require warranty repairs. Additionally Walmart provides a bonus 16Gb SD card and a camera holster bag (neither of which is provided by Harvey Norman).

      Quite frankly, even with GST added I would still buy from Walmart.

      Reply

    • Debbie says:

      09:26am | 13/11/12

      The more you whinge the more inclined I am to shop overseas smile

      Reply

    • K2 says:

      09:32am | 13/11/12

      How about we stop this nany state bullshoot, and let a “free market” decide the price rather than all this regulation?  The problem has been inherent since inception. 

      Keating introduces luxury tax and import tax.  Price of imported goods literally double.  Local retailers see that people are still prepared to pay escalated price for imported goods anyway, and increase their price to match imported goods.  As a result, prices sky-rocket almost instantly.  Government is happy, they get even more tax revenue from the outcome.  Business is happy, both local and foreign are making money regardless, local is of course making more.  The net result - Australians get ripped off, but hey, business thrives (as does inflation) and government reaps massive tax gains.

      Reply

    • daniel says:

      09:39am | 13/11/12

      The argument that local retailers are at a competitive disadvantage due to the GST threshold goes down the drain when there’s significant geographic price discrimination through online content services (e.g., iTunes, Steam). In addition, the fact that it’s mostly cheaper to buy items such as computer parts in Australia than from overseas online retailers suggests that the a failure to collect GST from online purchases less than $1,000 isn’t the problem. I think the real problem is a lack of courage from business leaders and business groups to push for significant workplace reform.

      Reply

    • Rose says:

      09:42am | 13/11/12

      If the government stupidly caved into this demand, then what would retailers blame when their sales didn’t improve? I bet most would blame the cost of wages or rent etc and still not look at their own business practice for the answers.
      Here’s a tip for retailers, if you want me to shop in your stores start offering a bigger range, when I walk in the shop why not try offering customer service? When you price your stock, look at whatever formula it is that you use, I won’t buy if you’ve priced yourself too high. In other words, sort yourselves out and make it worth my while to shop in your store, you need me more than I need you!!!

      Reply

    • Esteban says:

      01:33pm | 13/11/12

      You are right Rose but you can’t blame the retailers for hanging on and doing their best to survive.

      Online retailing is just the next evolution of retailing. As online retailing grows it is likely to come at the expense of bricks and mortar retailers. Many will disapper for good.

      It is no different to the little corner shops that could not stand up to supermarkets.

      One thing we can be certain of is that with their high costs bricks and mortar retailers who try to compete with online on price will go broke. That is a certainty.

      Bricks and mortar retailers who keep with their pricing and offer excellent service or a convenient location have a chance of surviving.

      There is still the odd corner store around from time to time.

      Of course there is no excuse for poor service. Busniesses that have poor service are always closing down. Online trading wont be to blame under those circumstances.

    • Kev says:

      03:52pm | 13/11/12

      One pervasive attitude that comes across from retailers is laziness. They are willing and ready to demand the government help them and they are ready to attack anyone with the bullshit argument that buying overseas is un-Australian but they aren’t prepared to do the hard yards and market themselves in a way that makes them stand out from the competition particularly when they cannot compete on price. I’ve been following these sort of articles for years and the most common complaint is appalling customer service levels. Fix that and you’ll see an improvement.

    • Rose says:

      05:38pm | 13/11/12

      Esteban, agreed, but ultimately, every retailer must give you a good reason to choose their business over another, whether it be another shop or an online competitor. There are some shops that provide great service and competitive prices and I will always use them as my first point of call. A couple I don’t even check prices on to find stuff cheaper as I have great faith in them and their business practices and my trust in them beats my stingy shopping tactics. Often you find out exactly how ethical a business is when you come across a problem, if they treat you as well when stuff goes wrong as they do before they take your money you’re on a winner.
      As far as retailers hanging on, they should do so by ensuring that they provide a point of difference, range, customer service, price…anything that gives them the edge. Then they will most likely be fine (no guarantees in business), however bleating about a minor tax break takes away from their credibility, not helping them at ll!!!

    • Modern Primitive says:

      09:44am | 13/11/12

      Of course, the government would never look at trying to streamline all the red tape the buisness has to comply with to actually make running a business cheaper. No, just whack another tax on. When will we get a government that seriously wants to look at reforming things?

      What about the cost of living? Everything is going up, more taxes are levied and the price of houses keeps a nation impoverished to lenders and we wonder why retail is struggling?

      And then there’s business itself putting ridiculous markups on their products, or importers setting an unrealistic price for goods coming into Australia, forcing retailers to have high prices to cover the cost of doing business.

      Will we look at any of these things? No, slap a tax on that’ll cost more to administer than it’ll bring in, and still won’t change buying habits.

      We could be the greatest country in the world, but we’re run by fools and idiots.

      Reply

    • Kev says:

      10:06am | 13/11/12

      If retailers are in trouble because they’ve been too lazy or too inept to deal with the growth of online shopping then that’s their problem and the government shouldn’t be expected to solve it for them.

      Don’t bleat about the existence of an inequitable playing field due to a lack of GST for online purchases because we all know that when the playing field was slanted in your favour, you all made a killing due to Australian’s geographic isolation and the lack of competition. It’s about time you all earned your sales again.

      Reply

    • old fart says:

      10:58am | 13/11/12

      I dont see how they can collect a tax for a transaction that occured outside Australia no matter which way you look at it.  The ATO does not have jurisdiction outside Australia.  As far as I am aware, no country has or is able to lay territorial claim to the actual internet.  If you have a transaction overseas ie Europe otr the US as an Australain you are exempt from tax collection.  If you have a tranasction with an australian company you pay GST as an australian citizen but not as a foreigner. Will foreigners be expected to pay our GST as well, I dont think so

      So I cant see the Australian Govt. wanting to upset the status quo with other governments. Apart from that I dont think any government would risk pissing off several million voters when compared to a few opportunists like Gerry Harvey.  If Australain retailers want increased sales tell them to lift their game.
      I’m sure the overseas retailers might have a thing to say about the collection o ftax as well.  While we are at it, what about duty free shopping will that be the next thing Harvey will whinge about?

      Reply

    • expat says:

      02:23pm | 13/11/12

      The only way the ATO can enforce it would be to collect it at the import stage. They are dreaming if they think Amazon is going to collect the tax for them.

      Technically the location of the servers where the “shop” is run would be the country under which it should pay any taxes. Obviously the solution is to put your servers in tax friendly locations, many countries do not tax foreign derived income.

      The same applies to services, good luck to the ATO trying to recoup GST for a consultant who is billing you from anywhere else in the world.

      If I was running an internet shop from say Cyprus, and the ATO decided to send the company a GST bill, it would just get binned.

    • TimR says:

      11:31am | 13/11/12

      A book that is $50 in a shop is $15 online. A pair of shoes that are $180 in a shop are $100 in the USA. $150 jeans are $60 in the USA. That’s why you’re going broke. Don’t blame the GST for your own incompetence.
      You deserve to go broke.

      Reply

    • Steve of QBN says:

      12:24pm | 13/11/12

      Yep.  Bought my daughters uni text books from a site in the UK.  Generally half the price and free delivery.  I just bought three books for myself from the same site, total was less than buying just one of the books here and again, free delivery from the UK.

    • Esteban says:

      12:46pm | 13/11/12

      Every economic cycle is supposed to end in a recession. A recession is the lion that eliminates the slow moving wilderbeast.

      Because Wayne Swann applied massive stimulas, in what will ulimately be a futile attempt to prevent a recession, the slow moving wilderbeast have survived.

      Bricks and mortar retailers have much higher costs than online traders and there is usually one or two extra middlemen in the supply chain that result in higher retail prices.

      It is pointless to try and compete on price. Those who shop on price only are not the target market for Australian bricks and mortar retailers.

      Online retailing is just another evolution of retailing and is the biggest change since supermarkets and decentralised suburban malls.

      Up against the supermarket the corner store deserved to go broke?

      What about the draper shop, the wagon wheel manafacturer, the TV reparman, film developers and suppliers all deserved to go broke?

      Businesses have always got caught out by evolution and I guess you could argue they deserve it but as a businessman myself I would never rejoice in it I would feel sympathy and understanding.

    • Garry Ullous says:

      11:42am | 13/11/12

      This won’t be an issue when the speculators move out of the A$, the Central banks move back to the US$ and the world realises that we are heading for cumulative deficits of enormous sums.
      Of course the retailers may be gone by then and we will be ransomed by the Great Debtor

      Reply

    • Esteban says:

      12:50pm | 13/11/12

      I don’t think it is going to happen any time soon Garry.

      If you want a pointer to the future of the USD$ google up “oil trade deal China and Russis September 2012.”

      This barely reported event is actually the begginning of the end of the USD$

    • Steve of QBN says:

      12:00pm | 13/11/12

      ** looks my first post got munched **  take 2.

      Lets look at why people shop online from overseas websites.

      1.  Cost.  The majority of people shop overseas because there are massive savings to be made.  I recently bought a pair of large motorcycle boots from the USA.  After purchase, currency conversion (lowered the price due to +ive ratio) and shipping, I saved $300 (almost 50%) over buying the same boots locally.  Also, the boots were not available in Canberra or Sydney at the time I was looking to buy.  Where the price difference is small, I usually buy locally but I cannot say “no” to a 50% saving.

      2.  Range of goods.  Sometimes the item you want is not imported into Australia or is out of stock so online is your only hope.  I have shopped locally, ordered through a local supplier for an offshore item and waited 4 months for it to arrive.  After that, I went straight to the supplier, bought the item for less money than via the local supplier and had it on my doorstep in 10 day.  If you are into restoring old cars, motorcycles etc, sometimes the only parts you have access to are overseas.  Why should I be forced to pay a GST on items that cannot be found here?  That are not sold here?  That have no distributor here?

      Avoiding the GST is usually not a consideration because the savings is still greater even if a GST was applied and the item might not be available in Australia so purchasing off shore is the only option.

      But then there is “Taxation without representation”.  Sales taxes are point of sale taxes which are no applied to off shore sales.  Why?  Because sales taxes cannot be levied against non-residents.  If you travel overseas, you are advised that if you buy items over a certain value and a sales tax applies, you can claim that tax back as you leave the country.  Likewise, if you buy from an offshore web site in the UK, EU or US, you don’t pay VAT or state sales taxes because you are not a resident and the tax does not apply.  This also applies to overseas buyers on Australian web sites, they do not pay GST on their purchases and they do not pay the local sales tax equivalent because the purchase was not made locally.

      If Australia does decide to impose the GST on foreign purchases, would this encourage foreign governments to impose the same on Australian wed sites?  Would our online sellers become tax agents for the US IRS, the UK Tax Office just as the Government is demanding that Amazon, eBay etc become tax agents for the ATO? And would the cost of meeting this requirement be passed onto the buyer?  And if passed on, it will impact on local web site sales because their pricing might be the difference between that overseas buyer purchasing here or at home.

      Finally, would the imposition of Australia’s GST on foreign sales be contrary to the Free Trade Agreements we have signed?

      Reply

    • Esteban says:

      12:52pm | 13/11/12

      Don’t they already collect GST on sales over $1000?

    • Steve of QBN says:

      02:31pm | 13/11/12

      My understanding it that the value of the item(s) must be over $1000 before you attract duty (depends on item - booze and cigarettes are different).  Duty is an import tax, not a sales tax.  And yes, you pay GST on the duty payment.

    • SAm says:

      12:45pm | 13/11/12

      Gotta love these retail groups…
      1) How in the world will our government enforce a tax on EVERY online retailer worldwide just to shut a few bumbling incompetant and uncompetitive CEO’s up? We arent paying VAT, or american Sales tax on goods bought from the EU or America (unlike Australia, tax is charged seperately, it is not included in the items price).
      2) It will cost far more to administer than it ever will collect. The very definition of a stupid tax
      3) It will not acheive what this idiot thinks it will (ie if avoiding GST is such a great ambition of us online shoppers, how exactly will we suddenly go ‘wow i might go buy in a shop and pay GST anyway!)
      4) Sure a few retailers (as in owners, CEO’s) might want it. How many is that versus how many millions of us simply try to get the best deal?
      5) What value is added in someone else importing the good, whacking it on a shelf and taking your money? I can find it in seconds for half the price with better service
      6) Just bugger off. Seriously. Quit your whining and bugger off. Cant stand hearing these loonies. Simple easy win-win solution!

      Reply

    • Gertrude says:

      12:57pm | 13/11/12

      Is the same Trevor who worked as a Junior Adviser for the Coalition’s Peter Dutton and has never worked in the retail sector now running errands for the Queensland Retail Association whose President was a LNP Vice President? Wouldn’t have anything to do with his approach to the government on this would it?

      Reply

    • TheRealDave says:

      02:00pm | 13/11/12

      LOL - GOLD!!

    • the moor says:

      12:58pm | 13/11/12

      There should be no tax free threshold either.  The GST should be levied on all goods and services bought overseas.  I know the argument will be that the cost of compliance will be high but in this era of electronic payment that is nonsense.  Make it apply to everything with absolutely no exemptions and legislate to make the banks collect it and remit it to the Tax Department.  If it is bought overseas with a Credit Card or Bank Transfer then apply the GST.  If it is a payment to PayPal or the like then apply the GST.

      Whilst they are at it the government should also apply a realistic tax to ‘business services’ charged from overseas so that companies which use this loophole as a way to lower their Australian profits and therefore can no longer do it.

      Reply

    • GST lawyer says:

      01:21pm | 13/11/12

      I am a tax lawyer specialising in GST and thought it would be helpful to clarify the mechanics of lowering the $1,000 threshold. There are 2 taxing points where GST is potentially levied on importations - it can, and often is, both:

      (a) what can be called “sale GST” levied on the sale itself and payable to the Govt by the retailer, which usually increases the price accordingly - we see that every day in domestic transactions. These foreign transactions fall outside this as the sale does not have the necessary connection with Australia.

      (b) what can be called “importation GST” - payable by you as the importer in order to get the goods out of Customs (either directly or via Aust Post). You pay this directly rather than having it included in the price paid to the retailer.

      The $1,000 limit simply says that (b) importation GST will not be levied on customers where the goods are below that level. Lower the threshold (eg to $100) and more of you will need to pay importation GST direct to the Govt to get your hands on the stuff you order online.

      In theory anyway - Govt still needs to inspect consignments to determine value and assess tax (ie the collection costs referred to by many that could outweigh the GST collected directly form consumers). The Howard Govt increased the limit to $1,00 partly because of the low collections and high costs of the previous limit ($50 I think), but at that stage our dollar was low so there was a natural disincentive to import direct so not much tax was at stake.

      So let’s stop talking about foreign retailers being dragged into the Australian tax net. They won’t be and in fact the Govt has accepted a whole raft of recommendations to take foreigners out of our GST system.

      Reply

    • AdamC says:

      02:13pm | 13/11/12

      Thanks for this comment.

      So, in summary, it would be feasible to lower the $1,000 threshold and require importing purchasers to pay GST straight to ATO? That seems like a sensible approach.

    • Steve of QBN says:

      02:34pm | 13/11/12

      Very enlightening.  Many thanks.

    • Andrew says:

      02:59pm | 13/11/12

      “So let’s stop talking about foreign retailers being dragged into the Australian tax net. They won’t be…”

      But that’s what the article is about.

    • Phillip says:

      02:02pm | 13/11/12

      This lot are infamous for attacking QLD Labor and have deep LNP connections. Their ex head is now at the state government’s QIRC and the new guy was picked to try and pick up the profile which is dominated by national groups. This doesn’t surprise me in the least. For so long they have been union bashing and now consumers are having their revenge. I’d never heard of this Trevor Evans guy until now, having a look online he seems to only have worked for a Howard backbencher and a government department.

      Reply

    • expat says:

      02:37pm | 13/11/12

      Best of luck to the ATO enforcing this, foreign companies in a foreign jurisdiction trading via a free trade platform.

      Unfortunately for the government they need to wake up and see that they now have to offer competitive taxes across the board, globalisation allows us to do business in any country of the world, it also allows us to set up companies in the most business friendly environment.
      Retail is just the start, service providers will follow and soon all that will remain is the hard to move sectors like mining.

      Some of us have been doing this for years, but I have noticed that it is starting to catch onto mainstream business as well.

      Reply

    • bananabender says:

      03:03pm | 13/11/12

      There is a much simpler solution.  Make parcels wait for 6-8 weeks for a customs clearance.  If you want a fast clearance you pay a $50 fee.

      Reply

    • Hendo says:

      03:12pm | 13/11/12

      I don’t want to pay any more tax. Screw the government’s greedy grab at my money. Enough is enough. The current helpless mentality of those who want is to tax those who have is wearing very thin.
      Another cynical attempt of wealth redistribution by the parasitic left portrayed in the guise of a level playing field.

      Reply

    • Made in USSR says:

      03:19pm | 13/11/12

      So far I have bought nothing from overseas (mostly USA and Hong Kong) solely because of the price - but because the local shops had no intention to provide the goods I was looking for, and the list has been long and wide.  My point is: with even less competition the local retailers (mostly distributing Chinese imports for a quadrupled price anyway) will probably begin to spit customers in a face instead of delivering the goods - and why not?

      Reply

    • Pat says:

      03:58pm | 13/11/12

      Wasn’t there some other guy who used to beat up on Government all the time from the Queensland retailers? I’ve never heard of Trevor Evans and there are that many Queensland based retail groups it’s impossible to keep track. They have clearly not done a very effective job, the only ones I ever hear of are Margy Osmond and Russell Zimmerman – this lot sound like another ginger group pushing quirky QLD right wing issues. And really, after reading your profile Mr Evans, no business experience at all.

      Reply
 
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