Advocacy groups: Don't tax online shopping yet
- 04 January, 2011 11:52
- Comments 6
Internet advocacy group, Electronic Frontiers Australia, has launched a counter-campaign against retailers lobbying for online purchases to be taxed.
According to its chairperson, Colin Jacobs, the move came in response to an open letter and media campaign by major retailers that claimed a lack of GST on Internet shopping and imports could cost thousands of jobs.
Jacobs called on all parties to wait for the Productivity Commission’s report into online shopping before taking more action.
“There hasn’t been any major evidence presented that this is a serious issue that’s damaging the Australian economy or employment prospects,” he said. “It would certainly inconvenience an awful lot of Internet users and online shoppers with e-commerce becoming more and more important.
“We don’t want to damage that unless there’s a very good reason.”
While some large traditional retailers claim imposing GST on retailers will provide a level playing field, Jacobs said other factors such as the high Australian dollar were also at play and that major players like Harvey Norman wanted to inconvenience online shoppers.
“Traditional retailers see online as competitors and so they’ll pursue anything they can to gain a competitive advantage or lessen the advantage of online retailers,” he said. “This is obviously part of that strategy.”
Australian Retailer Association executive director, Russell Zimmerman, labelled the ad campaign by major retailers a “knee-jerk reaction” and agreed that all parties should wait until the productivity commission’s report.
“There are a lot more problems with the retail industry than just the GST,” he said. “We want a level playing field and what that is will depend on what the inquiry comes up with.
“I don’t think you can pre-empt it…we don’t even know how big the problem is.”
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Comments
Pete
Retailers are crying foul over a small loss in sales due to on-line shopping, however many of those sites are in Australia and the purchases are low value items.
If you look at the trend in retail expenditure it has been declining for the past 12 month due to interest rate nervousness and the rising cost of living i.e. utilities and food.
So instead of blaming a very small area and trying to persecute consumers we should be looking at the bigger economic position underming family disposable income.
gnome
@Pete, good points. Australia is a very high cost retail environment which means that the GST is a small part of the difference in cost.
Since all imports at a particular time are paid for at the same exchange rate, the state of the dollar has even less to do with the cost of overseas purchases than the GST has.
Russell
To the Chinese a dollar profit is a day's pay so judging by the comments posted some cannot see past their noses or at least Gerry Harvey's nose. Wakeup, it's not just Gerry Harvey and retailers that are effected but a lot of small business across the board. For us as a small company we found this morning direct online sellers from the UK , US and Hong Kong have directly targeted our market through eBay and their own websites with competing products. The Hong Kong company is offering free delivery to Australia and does not normally sell our product category. They are actually a Chinese building materials company who have setup up a cheap shot online direct sell side business targeting our market because they know they have the advantage. The only solution for us now is to put some staff off and cut out our resellers so we can drop our GST INCLUDED price and sell direct as well.
Fred Firth
Are these retail giants stupid? The reason why retail sales are down to a 20 year low is because at least one million four hundred and fifty thousand Australians are paying billions of dollars more, this year, for their cigarettes. Not that you will read this in any newspaper.
If Harvey Norman and co get their advice from the same focus groups that Kevin Rudd trusted, his empire will go the same way. Another thing, Australian retailers think it is acceptable to keep customers waiting for stock to come in. As soon as the customer realises that Amazon can deliver good from the US faster that many local companies can get good from Melbourne, guess where they go for their next item.
There will be a backlash to these complaints. The newspapers have already demonstrated that even with the GST added to Internet imports, good are still a lot cheaper overseas.
Kevin
Gerry Harvey is not a retailer. He is a franchiser. He makes his money out of squeezing every dollar he can out of the franchisee. I would love to hear Harvey Norman franchisee holder's side of the argument. I can bet confidently that they would complain more about Gerry baby than online purchasing but that won't happen because they are gagged.
Why is it that out of all the major retail organisations heads Gerry Harvey is the one ranting and raving. I am sure he does not speak on behalf of Woolworths (Big W), Coles, (K Mart & Target), Retravision, The Good Guys or any other Harvey Norman competitor.
Nick
Kevin: I know a lot of Harvey Norman franchisees, and they complain more about online shopping than Gerry Harvey. For things like laptops, we aren't that fussed, but when you move in to the market for small, portable goods of value (cameras, mainly), you have to cut the price down by a ridiculous degree to stay competitive. Half of the cameras we sold around Christmas-time we sold at a (franchise) loss. I'm not completely sure about the cut Gerry takes, but the store I work in loses money on a fair few sales. Hell, we made negative money on Boxing day, and the week afterwards. Don't complain about the retailers. Complain about Australian suppliers, if anything. The biggest argument with online shopping isn't so much about lost sales as it is about obscenely low pricing.
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