RETAIL GST FUSS MISSES THE REAL CONCERNS

Written on the 13 January 2011

RETAIL GST FUSS MISSES THE REAL CONCERNS

AS retail king Gerry Harvey concedes defeat by the power of e-commerce, a newly formed coalition of retailer and wholesaler associations - the Fair Imports Alliance (FIA) – says the fuss over the GST threshold misses the more significant issue of systematic abuse of current regulations for imported goods.

FIA joint spokesperson and Australian Retailers Association (ARA) executive director Russell Zimmerman says consumers exercising their right to purchase personal items from offshore websites is just part of the ‘new reality’ for retailers operating in a global retail environment. The real issue is about fixing loopholes in the system that allow imports on a much larger scale.

“Even if the GST threshold for imported goods was lowered or abolished tomorrow, it still wouldn’t solve the long-term issue of individuals and businesses rorting the system to the detriment of Australian retailers and wholesalers,” says Zimmerman.

“What requires serious Government consideration is how our current regulatory environment allows misuse of the system by businesses importing numerous packages under the GST threshold over a significant period and then opening temporary pop-up stores or selling the goods on e-bay GST free.”

FIA joint spokesperson and Australian Sporting Goods Association (ASGA) executive director Brad Kitschke, agreed properly enforcing importation regulations and preventing manipulation of the system was a more significant issue than the level of the GST threshold.

“This is why Minister for Home Affairs Brendan O’Connor’s customs compliance campaign, due to begin early this year, is so important. It will expose flaws in the system that enable legitimate Australian businesses to be undercut by those abusing current regulations,” says Kitschke.

“Smart retailers are supportive of consumer choice and this debate shouldn’t be about punishing individuals who want to jump online and order goods from overseas for themselves or their families. All power to them – this is the sort of global environment in which retailers need to compete.”

The FIA comprises the following organisations: Australian Retailers Association (ARA), Australian Sporting Goods Association (ASGA), Bicycle Industries Australia (BIA), Australian Toy Association (ATA), Photo Marketing Association (PMA), Australian Fishing Trade Association (AFTA), Australian Booksellers Association (ABA), Australian Music Association (AMA) and the Retail Cycle Traders Australian (RCTA).

The bad news for the consumer led recovery is that The Australian Retailers Association’s (ARA) week-by-week tracking of retail trade during the Christmas period has found that the final week leading into Christmas Eve, more than 45% per cent of retailers were trading worse than the same time last year.

Key points

• Almost 42 per cent were trading above;
• Over 45 per cent were trading below;
• Over 12 per cent were trading the same as last year.

Zimmerman says retailers who were hoping for a substantial last minute rush of Christmas shoppers were largely disappointed in the final days leading into Christmas.

“ARA Christmas trade projections of $39.9 billion (modest 3.5 percent growth) look likely to be met although the Christmas trade started extremely slowly in November after the last interest rate hike forced many retailers into early sales mode,” he says.

“As a result of this slower trade, we are already receiving reports that the post-Christmas sales period (26 December until mid January) including massive Boxing Day sales, has been very strong. Although only a small 3 percent growth is predicted, post Christmas sales nationally should hit $6.97 billion nationally.

“Sales of seasonal products, including clothing and footwear, as well as small household appliances have seen strong sales. Products such as Christmas cards, wrapping paper, have seen savvy customers snapping up bargains. Many customers armed with Christmas gift cards are spending up on sale goods.”

Harvey Norman Bundall franchisee Steve Cavalier would not weigh into the debate regarding Gerry Harvey’s comments regarding online shopping, but indicated that sales over the Christmas period were up on last year.

“Sales have been very good, definitely up on last year,” he says.

2010/11 projections national totalled $6.97 billion.

NSW - $2.23 billion, VIC - $1.74 billion, QLD - $1.37 billion, WA - $799 million, SA - $482 million, TAS - $150 million, ACT - $129 million, NT - $71 million.


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