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Aussie Retailers Lobby For Tax On Online Purchases
An anonymous reader writes "Major Australian retailers are running a print advertising campaign to get the government to decrease the amount where the Goods and Services tax (Australian sales tax) comes into effect for all online purchases. Currently, the tax free amount is at $1000 AUD for online purchases. The retailers, such as Target, Harvey Norman, David Jones, Myer and others, are lobbying through newspapers and are considering launching a television commercial. The print adverts are claiming that if the amount remains the same, Australian jobs will be lost and the economy will be harmed. This is facing a massive backlash from consumers, and the government's assistant treasurer said it was an action by stores to fix the issues affecting them."
Like the digital media producers of the world, these Australian retailers would rather shift the earth than themselves.
It's not online retailers, it's overseas retailers. They want to charge tax on all imports, no matter the amount, so that you won't even be able to import a pair of $50 shoes without them taxing it.
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
The reason why people are shopping online is not because they don't have to pay the tax. Even if they did they can still get it cheaper accounting for postage/shipping by shopping online. The tax we are talking about is 10% yet many products you can get for 50% of the Australian price. It seems most retailers in Australia think the exchange rate for AUD/USD is 0.6 (currently at parity).
This isn't just bricks and mortar either:
Microsoft Visual Studio Ultimate with MSDN: AU$20,775.00 or US$11,899
The problem Gerry Harvey and co have is not that their goods are 10% more expensive then the equivalent goods online, the problem Harvey and co have is that their goods are 50% more expensive then the equivalent online.
Gerry Harvey's store, Harvey Norman (AKA Hardly Normal [prices]) is one of the stores I refuse to shop at due to it's high prices, incredibly annoying ads and now this. What Harvey really wants is for the government to step in and protect his profits (most of which come from predatory "interest free" deals which have something along the lines of 30% interest applied) by artificially making it more expensive to buy online.
Fortunately our assistant treasurer Bill Shorten has already shot the idea down saying it would be too expensive to implement.
Calling someone a "hater" only means you can not rationally rebut their argument.
This story is a disgrace and the vast vast majority of consumers are utterly disgusted by the actions of these large chains.
We are currently under an oligopoly in Australia for retail options in general and it's mostly getting worse.
I went for the first time overseas recently to Hong Kong, Paris and London and within 2 or 3 days of the holiday, myself and my travel partner were utterly shocked, upset and dismayed at just how /ludicrously/ cheap everything was, clothing, shoes, internet, food - everything was vastly cheaper.
Things have always been traditionally 'gouged' here in regards to pricing, the problem is it's not just the retailers being scumbags, from what I gather the manufacturers, wholesalers and suppliers to the country are bastards too.
Apple for example sell products internationally with no middle man, the Apple stores purchased their goods from Apple asia where they are likely manufactured. The pricing is often not just 5 or 10% more but 20 to 50% more depending on items.
I purchased a pair of identical shoes to a pair I got in Melbourne for $280 in a genuine retail Nike store in Hong Kong for $70, I've looked at them thoroughly, several times over, they really are the genuine item yet the price difference is astounding.
Our dollar has recently gained strength internationally yet goods still don't appear to be getting cheaper in the slightest.
As for the retailers, Aussie retailers are living in the DARK.AGES - they have little to no concept of what an online store is or how to run one and have been laughing up the profits for years, finally the cost of shipping things internationally has continued to drop and the AU$ risen to the point we're going overseas for more and more goods.
I say a plague on all their houses, these people are greedy vermin, threatening Aussie jobs for the sake of (gross amounts) of profit.
but there isn't. Online Australian retailers operate under the same rules and laws as brick and mortar retailers.
The Australian government realises it does not have power over foreign retailers. The tax free threshold was established to allow cheaper imports and create competition in our stagnant, monopoly dominated retail market.
Read this blog entry of Rulsan Kogan who runs an online store within Australia. Kogan.com.au pays the same taxes and import duties as Harvey Norman but does a much lower volume of sales then HN yet manages a much better price on equivalent (no-name brand) goods.
This is Gerry Harvey and others attempting to foist an artificial barrier to consumer choice and the free market in general. It wont stop at 10% (the GST) because Harvey cant compete with Aussie online retailers, let alone Chinese or US ones.
Calling someone a "hater" only means you can not rationally rebut their argument.
Yeah you're right I should say it's unfair to Aussie online retailers as well, but that's the point the Aussie retailers have to pay GST on any goods they sell you. It's nice not to pay tax, but it would also be nice to have a tax system not structured in such a way that it puts Australian businesses at a disadvantage over their overseas competitors and potentially forces them and the jobs they create off shore.
Either you're charging GST on every purchase or your not.
For the record I don't think this will rescue Harvey Norman or Myer or anyone. They're price gouging arseholes, but I don't think the government should be taxing some business and not others.
The problem is it isn't the consumers who really pay the tax, it's the retailers. How exactly do you propose that the government tax overseas retailers. I can think of a few options but each one of them forces me to think be careful what you wish for . What you and the retailers seem to support is not good for anybody at all except for the government.
GST is a furphy and anyone capable of doing the numbers would see that. Few do
And even fewer seem to care. This whole campaign by a few rich merchants has been met with an almost universal "piss off."
Having experienced this kind of anal import policies while I was living in Germany, I cannot stress enough how much you want to avoid this. Not necessarily because of the money(10% of a pair of shoes is what, $5?), but because of the stupid hoops they make you jump through just to get access to your own property. I had an electronic dictionary(one they don't even sell in Germany) sent to me from Japan, and instead of getting it in the mail I instead got a notice that I had to go to Nuremberg, which was over an hour away, and they weren't open on weekends and hardly open at all during the weekday. I went there and saw about 10 young employees standing around essentially doing nothing, eventually they said they would send it to my address in the states so I could collect it when I went home. Long story short they fucked me over and sent it back to the dude I bought it from. Fortunately he gave me most of my money back, but the long and short of it is that the German government spent their own money to deny me my property. Fucking brilliant.
Even for people who don't get fucked over like I did have to take a huge chunk out of their day to trudge over to the zollamt, if they could even get any time off when the stupid thing was open(they steal your shit then don't even have the common decency to have reasonable hours), all so you can spend 30 minutes filling out forms so they can collect 5 euros from you. Seriously, this woman who came it at the same time received some sort of figurine from the US, the thing was maybe, MAYBE worth 30 euros and they still made her do all that stupid shit I think she walked out of there paying them about 5 euros. They probably spent more than that just on the "labor", really it's just a massive employment program with some government manager probably getting a nice fat salary because he has to "manage" all those people.
Monstar L
You know who it's really unfair to?
The taxpayer, who has to pick up the tab for the implementation and border enforcement - of the 20c tax on a $2 cable. Because I'll tell you one thing for free, the overseas retailers won't be collecting and remitting it. Why should they? They've got their own tax laws to ensure compliance with. You start expecting online retailers to comply with taxes in every single country on the planet they sell to, and you're looking at compliance costs jumping up by orders of magnitude. Guess what? Then you're in a situation where online retailers are at a hundred fold disadvantage to brick and mortar stores. So your only option is customs charging it at the border.
There's a reason that governments only charge sales tax on expensive overseas purchases - the administrative cost of charging tax (including biosecurity vetting, staffing costs, storage, payment administration, and all sorts of other expenses). And for bonus points, you have to charge different amounts of tax based on the origin (Free Trade Agreements, or at least ones as one sided as US Free Trade Agreements, tend to forbid charging more tax than the other country charges on imports). So then US online retailers have an advantage over any others. Yay!
I personally feel that anyone who supports this tax probably works for a large Australian (or New Zealand, which tends to mean Australian anyway) retailer. So which one are you?
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
You cant always blame the retailer. Sometimes its the local wholesaler/importer who is gouging the Aussie market.
Take for example Burton snowboarding gear. Its much more expensive to walk into a store and buy here (even after accounting for GST and freight costs) than it is to walk into a store in the US and buy the same product.
Same thing with LEGO sets. I can walk into a store in the US and buy the latest LEGO police station for US$100 (or even less if I was to buy from a US online retailer or find it from somewhere selling on sale or below MSRP). The same set is available from a number of Australian retailers (as well as the LEGO online store) for AU$150.
The only reason I cant buy from these stores is because they cant/wont sell to Australians.
I am sure that K-Mart, Big W, MYER, Target etc would LOVE to be paying similar wholesale prices to what Wal-Mart, Toys R Us, Target USA, K-Mart USA and other US retailers are paying.
This isn't all online purchases, just imports from overseas. The way it works is any import under $1000 AUD doesn't have to pay duties/tax.
The thing is, shipping costs more than the 10% GST in most cases anyway. So there isn't anything to gain from taxing overseas retailers. All it does is make things more complicated to purchase from them, meaning that at the end of the day, the only people that would lose out in that scenario are the consumers. So if the prices were competitive, people would more than likely buy local. I know that's how I operate, international sales are a pain when you need to make a warranty claim.
So IMHO, Gerry Harvey or any of those other large retail chains do not have a right to my money, they can stick their bad customer service and exorbitant prices up their collective coits.
# cat
Damn, my RAM is full of cats. MEOW!!
The Board of Taxations released a study 12 months ago that stated recovery of GST on single imports below $1000 was not economically viable. http://www.taxboard.gov.au/content/reviews_and_consultations/gst_to_cross_border_transactions/report/gst_cross_border_transactions_report.pdf.
My experience with importing stuff is that Customs clearance is very quick - same day for most postal articles, a bit longer if you're forced to use Fedex, DHL, etc.
Based on the backlash against retailers, I can't see the government taking a chance at pissing off voters.
I rarely buy anything locally anymore (except for food) even if it costs me more to buy from overseas. Why? Australian resellers (both traditional and online), distributors and importers are lazy abusive con artists.
Every time I try to order anything locally it's either marked up by an obscene amount (anywhere from 200% to 2000% over the retail price in the US/UK/EU/etc.) or more likely simply unavailable because the local shops and distributors couldn't be fucked carrying anything except the cheapest shitty thing they can import from China.
Email an online store here and ask about a product - 90% of the time you get no reply. Go into a bricks and mortar shop and ask for something and 90% of the time they'll answer by offering you a completely different product. When you tell them that you're after a specific make and model and aren't interested in alternatives more often than not the sales guy will abuse you.
Just today I had another experience of the local bullshit: I wanted to buy some new HDD's (I'd rather buy spinning chunks of rust locally for warranty purposes), I'd settled on the new Hitachi 7K3000 in the 2TB size (note that the 3TB size _is_ available here) so I emailed the three distributors mentioned on the Hitachi site. One bounced (this also happens a lot) one ignored me and the other one said that I'd have to wait at least two more months before they'd be bothered to import them. Best guess as to why: there are probably thousands of the older 7K2000 2TB model sitting in a warehouse in Japan and the local dickheads probably offered to take them at a reduced price from Hitachi all the while still charging the same price to the customer.
This debate has been making headlines here for a few weeks now and the thing I find most ironic is that no one has bothered to suggest that just maybe the GST should be simply abolished - everyone seems to accept the idea that the government sticking its hand in your pocket every time you make a purchase as some kind of natural law. This baffles me: the left should naturally be against it because it disproportionately taxes the poor and the right should be against it because it's a tax that is administered non-voluntarily buy businesses without recompense.
Andy Warhol got it right / Everybody gets the limelight
Andy Warhol got it wrong / Fifteen minutes is too long.
I'm an Australian consumer and I will happily pay an extra 10% on purchases for GST on behalf of the overseas retailer.
Goods online are, in nearly all instances over 50% cheaper overseas. If I can give 10% of this money to Australia to help support our country I am happy to do so.
Dear Retailers who are involved in this,
Please rest assured I and every other consumer who is outraged at your comments will never shop in your overpriced, monopolized brick and mortar stores ever again. Our AUD has almost doubled in value (54c to 101c vs USD) yet our prices are still increasing.
When you stop buying from China, so will we.
You've nailed this one.
When I can purchase something from overseas for quite literally half the retail price here in Australia, then add a bit of shipping and it's still significantly cheaper, I'd actually be happy to pay another 10% on top as it's STILL cheaper than purchasing the item here in Oz.
This leads to the situation of some large brand names - Canon and Nikon spring to mind, that take advantage of their market position to do everything they can to kill the grey market. If you buy, for example, a Canon DSLR here in Australia, if it's a grey market import (ie, not imported directly by Canon Australia) then Canon will not only refuse to service it under warranty (fair enough I suppose as the product doesn't have an international warranty) but they will actively refuse to perform any work on it whatsoever, even if you want to pay to have it serviced. If it's not an Oz serial number they simply will not touch it.
Now, this is a big deal as I can get a Canon EOS 5D MkII camera body in the USA for $2499 (I'm assuming for the purpose of this exercise that $1AUD = $1USD)
Were I to purchase that very same camera here in Australia, from Canon, for $3599. If I were to turn to eBay instead and get one from Hong Kong, I can get this very same camera for $2300 with free shipping.
Well-respected USA online store: http://www.adorama.com/ICA5DM2.html
Canon Australia: http://www.canon.com.au/en-AU/For-You/Digital-Cameras/EOS-Digital-SLR-Cameras/5D
There have even been times where if you wanted a mid-range or high-end MacBook Pro, it'd be cheaper to fly to the USA, walk into an Apple store, buy the computer and fly home than it would have been to purchase the same machine here in Australia.
The pattern to really high local prices seems to be when the parent company controls the importation and distribution, we all get reamed.
Specialist Mac support for creative pros, Melbourne
First off, when you pretend to be Australian, step number one is use En_AU
Flat out wrong. Gerry does understand that a lot of retail is going online, what he doesn't realise is his business model needs to change in order to remain competitive. Already most Australian's would rather shop at other retailers like JB Hifi or Retravision (where I bought an A$500 air conditioner last night) who are at least semi-competitive with online retailers and don't try to push you into predatory "interest free" credit deals (actual interest is quiet high).
Harvey wants online trading to change to suit him rather then changing to be competitive. Complete opposite of what you are saying.
BWAHAHAHAHAHAHAHAHAHAHA,
You're talking about the man who played a huge part in killing local competition and manufacturing. He is now part of the retail oligopoly which strangles independent brick and mortar competitors in the infancy.
Calling someone a "hater" only means you can not rationally rebut their argument.
Even if we give him the benefit of the doubt, what he's basically saying is that brick and mortar stores are a very inefficient and expensive way to provide goods to people. Rather than improve their efficiency or allow the market to kill off the old and no longer useful ways, we should artificially inflate the cost of more efficient methods of providing goods to people, so that all the methods we have available are equally inefficient.
From a short-term perspective, keeping the jobs etc. sounds good. Long-term though, this sounds a bit like the broken window fallacy.
You obviously don't understand GST credits. If I buy something at $40 wholesale and pay $4 in GST, when I sell it to you for $50 + $5 GST, I give the government $1 and claim a GST credit for the other $4 - it's not like the old wholesale taxes.