While Coalition spokesmen Gerry Harvey and Solomon Lew have been slammed for suggesting that consumers who purchase goods from overseas websites under the $1,000 GST threshold should lose the GST exemption, Netresigtry founder Larry Bloch says he felt it was important to stand up for small businesses who were being affected.
"We've been noting over the last six months or so a great deal of anxiety among small businesses around trading conditions," Bloch says.
He points to weak consumer sentiment, the strong dollar and high interest rates as part of a "perfect storm" hitting SMEs.
"This particular GST and duty issue isn't one that small biz would be concerned with if it wasn't for this perfect storm."
Bloch concedes the Coalition's message was "poorly delivered and probably by the wrong messages" but says he simply cannot understand why an Australian retailer selling identical goods to an overseas retailer are losing customers because they are forced to build GST and import duties into their prices.
"I think the issue has gotten lost against so-called fat cat billionaires. Really it's got nothing to do with that. It's a simple matter of a fair go," Bloch told SmartCompany.
"Nobody wants people to stop shopping online – it's simply about a fair and level playing field for small business."
Despite the angry backlash from consumers, Bloch says he believes Australian consumers will eventually start considering the consequences for local businesses of online purchases and will be prepared to pay "a buck or two more" to support local industry.
"It's just the price of playing fair."
Bloch also points out that many overseas countries including Britain, the United States and many European nations charge duty on import duties on purchases above thresholds that are much lower than Australia's. In Britain, all purchases over £18 attract duty, while in Sweden all internet purchases attract duty.
Bloch says he has faced the problem in his own business. Several years ago, a US-based domain name reseller was able to sell Australian domain names from an overseas website without charging GST. After a long campaign, the policy was reversed and the overseas operator was forced to establish an Australian entity registered for GST purposes.
Despite the Coalition's on-going campaign, the Government does not appear to be budging on the issue – as Prime Minister Julia Gillard made clear yesterday.
"I would be very reluctant to see Australians who are facing cost of living pressures not able to access shopping on the internet in the way that they access it now," she said.
Bloch says Labor has been scared off introducing new taxes after it's bungled introduction of the mining tax, but says Netregistry is prepared to make a submission to the Productivity Commission inquiry the Government has set up to examine the issue.
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written by andykirby, January 11, 2011
Putting aside issues such as the costs involved in collecting the GST, non-payment of GST on a purchase is hardly a consideration of mine when shopping online. My main considerations are, in no particular order, availability, ease of purchase and price of the item itself.
A lot of businesses simply do not offer the range and availability I require. As an anecdotal example, I recently purchased a component for my bicycle. Three of my local bicycle shops sold the component I required but did not have them is stock. The best I was offered was a 4 day wait. On receiving the component I was then charged a price that (after taking out GST) was 50% over the price of the component online from an overseas supplier.
As a customer, why would I use the local shop in this case? This isn't a 'dollar or two' extra.
written by Twoeee, January 11, 2011
written by Mort, January 11, 2011
Retailers need to wake up to themselves. There has never been a level playing field in Australian Retail. Retailers have always enjoys a fiefdom of free reign.
Now they are seen to have had their fingers in the till for years they are whining for support and rectitude.
Go Away Retailers and get your act together .
even with GST we can always out buy you in the global theatre.
The comment from Mr. Bloch including the inference that Aussie Net buyers somehow avoid import duties is a blatant fallacy as well and shows him to be unknowledgeable at best and conspiratorial at worst.
written by Totalwealthplan.com, January 11, 2011
Bangkok, Colombo, Kaula Lumpur etc are known destinations for shopping.
Internet is here to stay so is Internet shopping.
written by SEO Strategies, January 11, 2011
written by MikeQld, January 11, 2011
As a matter of interest, did you know that a coalition of consumers and small businesses has been formed to lobby the government to increase the threshold from $1000 to $2000 on imports before the GST impost shall apply? This will allow small business to import products to resell so that they are able to compete against the preditatory practices of the organisations headed by Gerry Harvey, Solomon Lew, Bernie Brooks and cohorts. On many occasions Target, Harvey Norman, Coles, Woolworths and the likes have moved into towns to the detriment of the small traders who have served their communities for decades. It is time that the government legislated in the interest of small business.
written by KPeck, January 12, 2011
For Myer.. read COLES ... the people who force consumers to purchase from them ... and in in pre-set amounts ... or pay more for their petrol.
And these people are asking for a 'level playing field' ... are they joking !
written by www.totalwealthplan.com, January 12, 2011
Does the massive discounting at Harvey Norman tell us something? Yes, fat profits are no more. The market is becoming competitive and isn't that good?
Policing costs would be prohibitibe. Smart ideas do need implementation.