Gerry Harvey predicts empty shopping centres due to unfair e-tailers advantage

No GST paid on online imported purchases under $1000 is unfair on Australian retailers and will lead to empty shopping centres, according to executive chairman of Harvey Norman, Gerry Harvey.

Harvey spoke to DIRECT saying that Australian retailers had to compete with the GST, duty taxes, tough consumer laws, staff wages and high rents compared to overseas online retailers that are buoyed by the close to parity of the Australian dollar.

“It’s a very unfair advantage. The consumer just wants cheap goods and the politicians don’t care,” he said.

There is a rising tide of support from Australian retailers for tax reform on online purchases. Australian Retailers Association executive director Russell Zimmerman said Australia’s GST free $1,000 threshold created an “unlevel” playing field for all Australian retailers.

‘The retail industry will suffer and jobs will be lost,” he said.

Gerry Harvey would like to see the Federal Government scrap the threshold and charge duty on imported goods as is done overseas. “They charge import duty in England, the VAT is 15 to 20 per cent and the EU has a further 50 per cent tax. Overseas they’re awake to it, why aren’t we in Australia?”

Harvey believes that the tax loss is over a billion dollars a year and growing with Australian residents having to pay the shortfall. He revealed that online overseas purchases impact on less that one per cent of the Harvey Norman business but he wants to speak out against the unfair practice to Australian retailers.

“There will be no one left in shopping centres. It’s not fair, you can’t crucify some for the benefit of the other, the advantage is not for the whole community.”

Consumer group Choice opposes the retailer’s stance. According to Choice spokesman Christopher Zinn retailers need to demonstrate the advantage of tangible shopping against online competition.

“We believe it is up to brick and mortar retailers to show their advantage,” says Zinn. “To be able to physically touch and try on products, show better, more personal service and information, returns, refunds and remedies are a better advantage over the online traders.

Zinn feels that due to technical progress there is more competition overseas, which has been brought to a head with the strength of the Aussie dollar.

“There has been a gold rush to the US sites, due to price at the moment, however unless there is strong evidence of the GST threshold doing lasting damage to the retail landscape we don’t believe it is a question of changing it.”

It is inevitable that the dollar will swing down again and then it will be less attractive to buy off shore, according to Zinn.

A spokesperson for The Assistant Treasurer, Bill Shorten confirmed that the Federal Government is not considering taxing online shoppers but are looking at the issue.

“There is no policy to put the GST on online shopping. What the Government is doing is considering the concerns of retailers about the amount of goods coming into the country that doesn’t attract GST, particularly in light of the high Australian dollar. Of course the Government is considering those issues – it is the responsible thing to do,” assistant treasurer, Bill Shorten said.

“However, consumers needn’t be worried that we are considering imposing GST on everything they buy from overseas. We are certainly not doing that. Not only would it be bad for consumers but it would also be administratively impossible.

“What we are looking at is making sure we have the settings right and cracking down on people who rort the system – who bring in multiple batches of goods, each worth $999, just to get around the threshold.”