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Oz retailers more expensive than online EVEN after GST difference, Federal Commission finds. And it seems moving the threshold is more trouble than its worth.
In other words GST is not the issue, it’s retailer’s high prices and lack of supply that is pushing consumers online, the body says.
Lack of goods available worldwide and not sold in Australia is nothing new, although it seems consumers have now found a way around that.
Consumers “simply cannot purchase an equivalent product from a local supplier,” which is pushing them to look elsewhere according to findings released on Thursday.
That is what retailing stalwarts like Harvey Norman, Myer and Solomon Lew’s Just Group have been told by the body charged with investigating their claims, that the absence of GST on online goods sold here under $1000 by foreign retailers is making trading unfair.
“Based on the preliminary evidence available to date, it appears that even a large reduction in the threshold may not necessarily have a significant impact on the number of parcels not subject to GST and duty,” the Federal government backed Productivity Commission said in its latest findings.
And it seems most of the goods bought online from foreign retailers are worth under the $100 mark anyway, according to Customs data.
This puts to rest many claims by the likes of Harvey Norman, most of whose white goods and TVs would be worth well over that, and one of the original ringleaders in the GST campaign, that the loss of business to online rivals was affecting their bottom line and threatening thousands of jobs.
“The debate has moved on,” a spokesperson from Assistant Treasurer Bill Shorten office said.
The retailers campaign led by industry stalwarts including Solomon Lew, Myers’ Bernie Brooks and Gerry Harvey sought to put pressure on Canberra to introduce a 10 percent GST on all goods purchased from overseas web sites and launched a series of full page ads on Boxing Day to that effect.
These findings will put yet another spanner in the works for the retailers campaigning for introduction of GST on foreign rivals, which received a massive public backlash at what was seen as retailers’ attempts to undermine online bargain hunters.
After the public backlash, Chairman of Harvey Norman, Gerry Harvey, later admitted the campaign was done in “poor timing.”
However, keeping the GST threshold at $1000 will come at a price for Federal coffers, and would cost government $460m in lost tax revenue and up to $610m in three years time, it also found.
The GST threshold is far higher than our neighbours NZ, at $44, as well as other nations like Canada whose limit is just $20.
However, it would be more expensive for Government to cut the tax threshold for online purchases than would stand to collect, according to the Board of Taxation.
Myer have already moved their online operation, called myfind.com, offshore to China in February which offers “great value and one-off special buys for online shoppers.”
Despite the latest findings, it appears retailers including the Australian Retailers Association, are still seeking to pursue its campaign and have asked the government for more information.
The Commission is now looking at other issues affecting the industry.
