The Retail Coalition that is campaigning to have the Government abolish the GST exemption on purchases made overseas has an unlikely new member – domain name reseller and web hosting firm Netregistry.
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.
Its not just about duty and GST. I recently bought a Yamaha AV receiver in the UK and had it shipped. It cost $800 (including 17.5% VAT) and $150 to ship. The same AVR here is a cool $2999.
I don’t like being ripped off – especially by rich, old, fat white guys so if it’s alright with you Gerry, I’ll buy goods overseas until you either start negotiating better prices with your suppliers or stop demanding ridiculous margins.
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
How come Mr Bloch doesn’t also point out that in Britain Royal Mail charges consumers £8 for doing the customs processing on those packages,/a>, and that in most cases that charge is far more than the customs charges.
By way of comparison, the supermarkets will pick and deliver as much shopping as you want and deliver it for you in a 2 hour window for as little as £3, so how it can cost £8 to fill out a form is beyond me.
I doubt that Australians will put up with paying a similar fee so hopefully Messrs Bloch, Harvey and Lew will be prepared to pay it given that they feel so strongly about it.
“prepared to pay “a buck or two more” to support local industry.
It’s just the price of playing fair.”
What an unrealistic statement.
Australians do not have the ‘luxury’ of paying a ‘buck or more’ to the local retailers.
Consumers are not there to prop up retailers.
Another shot in foot while in mouth statement.
One point.
“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.”
I buy specialist books on history. There are really only two bookshops in Sydney who carry books in the area I am interested in. One had a book I wanted, the other did not. The one that did have it was charginng $190 for it. When I asked why so expensive, I was told ‘out of print and therefore take it or miss out”.
Instead I took myself to Ebay where I found it in mint condition for US$40 for the book and US$10 postage and it was delivered within two weeks over the Christmas period. There were a range of sellers happy to sell me this book.
I happily pocketed the $140 savings, vowing never to buy from that bookshop ever again.
That, members of the Retail Coallition, is why I buy on-line.
I fail to see why your inneficient retail practices and price gouging should be in any way supported or abetted by the Government.
– The price difference is far greater than just the GST.
– THe time to get something delivered if it isn’t in stock locally far exceeds the time to order it from OS where it is in stock, and get it delivered.
– The variety of goods that you can buy from OS is far better.
– The knowledge of many of the online retailers is better
But I’ll probably still buy fridges etc from Harvey. I think the freight cost on that might be a tad high.