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Australia Businesses The Almighty Buck

Aussie Retailers Lobby For Tax On Online Purchases 203

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."
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Aussie Retailers Lobby For Tax On Online Purchases

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  • by mykos ( 1627575 ) on Friday January 07, 2011 @03:09AM (#34788252)
    Like the digital media producers of the world, these Australian retailers would rather shift the earth than themselves.
    • by Jeeeb ( 1141117 )

      Like the digital media producers of the world, these Australian retailers would rather shift the earth than themselves.

      Really what would you have them do? Pack up and move overseas so they can avoid the GST?

      For the record GST on overseas purchases alone won't save them, but why should businesses have to compete with a business that faces a different set of tax rules to them?

      • by AbRASiON ( 589899 ) * on Friday January 07, 2011 @03:38AM (#34788408) Journal

        The GST has NOTHING to do with these people not getting sales, the fact that goods vary from 20 to 70% cheaper, yes 70% cheaper overseas tells me / us / Australians that the GST has little to no impact on the price compared to outright greed.
        Books especially, online OR retail, overseas is vastly different.

  • And if that isn't bad enough, the New Zealand Retail Association thinks it's a great idea - they want the 15% GST to be applied to EVERY purchase, no matter the origin.

    The way I see it, they should just stop whining that they don't have it easy any more. You just can't have a 50% margin any more, get over it. Stores should start competing based on their actual merits, such as the ability to get a product to you in less than 2 weeks. And an actual warranty.

    • Isn't that the point of a sales tax, to apply to every purchase?

      • by deniable ( 76198 )
        Every purchase within your jurisdiction. What they want is actually an import duty. It comes down to a choice between laws applying at the buyer's location or the seller's.
        • What they want is actually an import duty.

          Which they already have, although it's typically only applied to items over $400 in NZ.

          I agree with GP though - the days of huge markups through the whole supply chain are over. That's a good thing for the end customer.

  • I vote and I say no.
    The big retailers came and close down the mom and pop shops.
    Now the big retailers are hurting, and they want to return to profitability by taxing the competition.
    Not sure how it can be done economicaly

  • by Craigj0 ( 10745 ) on Friday January 07, 2011 @03:20AM (#34788316)

    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

    • More examples:

      Just went on Steam Australia store - Call of Duty: Black Ops = $90, look at US store online and it is $60.

      Looked on Apple store online - base level Mac Pro in Australia = $3200, in the US Apple store it is $2500.

      • by dbIII ( 701233 )
        Even without delivery the $700 difference would get you to Hawaii and back with a day or two to see the huge surf. I know with customs duty that's cut down to $450, but still gets close :)
      • Yeah exactly. An American friend of mine recently flew home to buy a Macbook Pro because quite frankly it was a free flight for him and a chance to see the family. Puts it in perspective when it costs about the same to take a trans pacific flight twice and buy the product in person as it does to drive 10 min down the road and buy the product.
  • GST is only 10% (Score:5, Informative)

    by mjwx ( 966435 ) on Friday January 07, 2011 @03:22AM (#34788320)

    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.

    • by deniable ( 76198 )
      Too expensive in votes as well as implementation costs.
    • by strack ( 1051390 )
      GO HARVEY GO HARVEY NORMAN GO! yeah. that shit is permanently emblazoned on my brain. fuck harvey norman, fuck gerry harvey, fuck their exorbitant markups, and dont let the door hit you in the ass on the way out.
    • 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.

      Except when was the last time you actually paid the sticker price in a Harvey Norman, Retravision, etc? There is pretty much a cultural expectation in Australia that electrical and whitegoods shops will knock another 15% off the price if you just mutter something like "hmm, what price can you give me if I buy it today"? I have almost always found that you're actually better off looking up an on-line price, then popping into your nearest shop and mentioning it to the salesperson. They will then pop over t

  • The GST issue is actually a non-issue but it's a highly visible one that can be driven hard. As it is, the 10% isn't the cause of the make/break when it comes to retailing. The bigger issue at hand here however is the constant desire we all have to increase our income more and decrease our expenditure (for the same quantity of goods). However, it's a circular system (I won't say closed, since we have inflation) and if you demand more wages then those wages have to come from... PROFIT. What people need

    • by lgftsa ( 617184 )

      I can buy unbranded ipod compatible 4 conductor headphones (with mic/switch) for AU$1.50 delivered from Hong Kong.

      I can buy functionally identical apple branded headphones from jbhifi for $39 in store.

      They're both made in China, and if China can leverage that $1.50(less postage) into jb going bankrupt, then they deserve to do so.

      On the other hand, the fridge I bought this afternoon is (mostly) Australian made.

    • While all true.

      I'm just a regular worker bee and what I've been told and seen since birth is that free trade and globalization is good and it is the future. I won't go into my own views on that... but I've accepted it.

      One of the realities of that is you have to accept that an Australian, American, Canadian, European... is no more entitled to a high standard of living than an Indian, Chinese, Brazilian. And so when I see a western manufacturer complain they cannot compete... I say... why should I care more

  • I am an Australian. (Score:5, Interesting)

    by AbRASiON ( 589899 ) * on Friday January 07, 2011 @03:32AM (#34788374) Journal

    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.

    • Your example is awful. Shoes, and clothes, aren't based on what they cost to manufacture, they are priced based on what people will pay. The reason Nike charges more in Melbourne is because people will pay for it. Just like they used to charge $400 for Air Jordans in America. It wasn't costing $400 to manufacture them.

      Beyond that, there are other issues. The median Hong Kong resident makes 30% less than the median Australian resident. Of course any item that has wages as a major portion of the product cos
  • The right answer is to get rid of sales tax altogether. It's a ridiculously backwards, regressive tax that penalizes the poor more than the rich. You can try to make it fair by omitting food and basic necessities, but that doesn't work well because it hits the middle class the most, and is open to administrative abuses (the favored companies of the ones administrating the tax can have things omitted in their favor).

    Get rid of sales tax. Then you won't have these market distortions.
  • 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.
  • by tumutbound ( 549414 ) on Friday January 07, 2011 @04:11AM (#34788556)
    The Board of Taxations released a study 12 months ago that stated recovery of GST on single imports below $1000 was not economically viable. [].
    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.
  • by Enter the Shoggoth ( 1362079 ) on Friday January 07, 2011 @04:18AM (#34788582)

    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.

  • by Mr_Plattz ( 1589701 ) on Friday January 07, 2011 @04:20AM (#34788592)

    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.

    • by Malc ( 1751 )

      I don't get why goods are so bloody expensive in Australia. I was there for 6 months in 2009... I wanted to buy the Lonely Planet guide to New Zealand, which was the next destination on my travels. A$45 from the main book shop chain in Melbourne, or A$37 from Amazon in the UK (including probably about $20 AIRMAIL shipping). How the hell can goods be over twice the price, and still considerably more expensive than goods shipped on planes from almost the exact opposite side of the planet? I hear stories l

  • i see this as the foremost excuse that private interests use to push bullshit for themselves. now whenever i see any justification using that 'jobs' bullshit, i label it as crap being pushed by private interests and disregard whatever it is attached to.
  • The less competitive firms argue for protectionism, rather than offer decent online shopping sites.

    I buy from Australian sites when they are worthwhile: when they offer service and choice. I have bought mobile phones and Android tablets from Australian websites, because they had local warranties, faster delivery, and a decent range of items at competitive prices.

    With books and CDs, it is often better to buy from overseas, where the range is much wider. And anyway, the books I want are just not available in

  • The print adverts are claiming that if the amount remains the same, Australian jobs will be lost and the economy will be harmed.

    No, inefficient Australian jobs will be reassigned to other, more efficient sectors of the economy, and thus the Australian economy as a whole will be improved and more efficient.

    But yeah, keep crying in the hope that dumb politicians will prop up your obsolete and wasteful business model. There is hope for you, if the MAFIAA are any guid

    • No, their claim is essentially correct. It's just that the title and summary is a complete fabrication.

      It has nothing to do with "online" is has to do with "overseas". GST (a point of sale tax) isn't applied to personal imports of $1000.

      It doesn't matter if you ordered "online" from, or picked up the phone and ordered "on telephone", or if you used the postal service to mail a paper order form.

      So foreign stores have an advantage over non-foreign stores in that they don't have to add 10% to the pr

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