A factor-oid that I think I read in the AFR is that internet sales represent only about 5% of the retailers sales. So this campaign is an indication of how much they are hurting, since the are pushing so hard over such a small erosion of margin.
I agree that some people importing lots of sub-$1000 shipments probably needs to be dealt with, but I thing the current GST laws already cover this.
Finally, I would just recount an experience that I had with Apple. Ordered some Apple gear online with the plan to take O/S and claim back the GST. The items were put on back order and shipped separately direct from China and then resulted in 2 invoices once of which was sub the GST refund cut off. I had a big argument with Apple to get a consolidated invoice issued. They finally capitulated when I raised the GST issue, looking into the legislation and confirmed by Customs; because Apple had shipped the products directly to me from China my products were actually GST exempt. Apple had incorrectly charged me GST that they technically didn't have to pay as tax. I hit them with this and asked about the the apparent incorrect collection of GST. Consolidated tax invoice was issued the next day. I did care to follow the matter up and I'm sure Apple are correctly paying their GST. But it seems to me that is a big potential loophole and the retailers might be better concerned with worrying about any potentially dodgy retailers who might be pretending to collect GST on imports.
If Apple are importing goods they may not be paying the GST once the goods arrive into the country, but it catches up with them once they prepare the BAS and pay the ATO. Apple are charging you for the GST then Apple will eventually be sending your part of the GST to the ATO. If the goods arrived into the country and then Apple was paying the GST once the goods landed then this GST they paid on import can be used as a GST credit for when they do their BAS.
Example $500 goods arrive into the country GST free.
Charge you $700 + $70 GST,
When preparing the BAS $70 goes to the ATO, paid on the 21st the month after.
Example $1000 goods arrive into the country, 2 lots of $500.00, $100 goes to the ATO on customs entry.
Charge you $700 + $70 GST.
When preparing the BAS You got $30 from the ATO if you don't sell the other $500.00 item for $700.00,
if both products were sold for $1,400 then you send $40 to the ATO, you paid $100 when the goods arrived and the difference is $40.00
1. Try returning faulty goods to an overseas seller. No much chance of success there in most cases.
2. Yes, the local retailers could drop prices if they went to a warehouse+online model as with many of the overseas sellers. Who then will provide the on floor stock for customers to evaluate? One of their complaints is the number of people who use this facility only to then buy from overseas.
For the vast bulk of the population, it's the convenience and immediacy that counts. There are businesses and jobs here that are at stake, but I guess that if it's not your business, that's OK.
The $1,000 minimum for imposing GST is only part of the problem.
There was an interesting discussion a few weeks ago.
http://www.australianfrequentflyer..../is-australia-an-expensive-country-26523.html.
Australian wages are higher compared to other countries, its not just the cost of the people that I employ but also for any other Australian company we deal with is also high.
There is also a hidden cost, once the goods are imported over $1,000 then then a customs entry needs to be prepared, if its a simple entry that Fedex can handle it is $55.20 per shipment.
Another problem is that the Australian market for a lot of items is 15 times smaller than the US market. US mass merchants can work on a smaller margin as their volume is 15 times greater.
One of part is the expense to get an item into Australia.The cost to freight a box of items in can be expensive, but there are lot of add in costs, Customs entry, Airline terminal fees, or port fee(if seafreight) there isn't a huge market to spread some of these costs over.
You can buy some equipment out of the US and the of freight is almost the same if I had to buy it out of Perth. Some of your bigger US merchants have good rates with shippers like Fedex, who can ship a 5kg package to Australia for $22.00 USD. For us to send a 5kg parcel to Perth via Australian Air Express is $17.49 + GST plus the security fee,(2%) fuel surcharge(3%) plus the account keeping fee.($6.95) I am sending about 20 items a week($0.34 a shipment)
The Australian dollar keeps moving against all other currencies. In June our dollar was trading around $0.85 USD and today we are trading at $0.99. Equipment I brought in June I had to pay for already and is still at $0.85. There is always a fine line trying to work out what stock is going to sell.
Channel 9 ACA and I think Channel 7 TT both aired news stories about how cheap it was to buy equipment from overseas. Get it cheaper and not pay the GST. Companies like Harvey Norman spend quite a bit of money promoting their company and the products they sell on Australian TV. Suddenly they are telling consumers go overseas and it is companies like Harvey Norman and others pay to advertise on these channels.
5% was quoted as the amount of market that is being lost to buying goods overseas, but I remember reading it was only about 2%. But if you loose 2% of your market that can mean the difference between profit & loss.
For some industries there is going to be a big shift in the way some things are sold. The Apple Ipad is going to kill a lot of book and magazine resellers, as it cuts out a lot of handling and selling costs. A lot of other products will become more plug and play. If you need help to connect it you will need to pay some one, to fit it for you, it will be much harder just to ring the supplier to ask them for assistance.
Just a few of my observations.
