Australia’s Retailers Blast Government, Igniting Feud

Full page advertising campaigns, backed by a coalition of 21 of Australia’s leading retailers, began on Tuesday as they try to diffuse the heat from disappointing summer holiday period results.

The big retailers leading the campaign immediately felt the heat as shoppers hit forums on the Internet, rejecting the campaign.

The group of retailers, which includes Myer, Harvey Norman, David Jones and Just Jeans, are trying to push for the Government to charge GST and import duty on goods purchased on the Internet to “level the playing field”. Currently, GST is not charged if goods are purchased on international websites for less than $1000.

In The Australian, Independent senator Nick Xenophon out against the recent campaign, saying “it’s extraordinary to hear Myer, David Jones, Harvey Norman and Target all claiming they want a level playing field when … the extraordinary market power of these very businesses has put enormous pressure on the small business sector.”

Harvey Norman executive chairman, Gerry Harvey, reported on Tuesday if the tax exemption wasn’t dropped soon, companies would find a way to avoid paying them. In The Australian, he said “We’ll go offshore, we’ll open our store over there, send goods to Australia, evade the GST, evade the duty, and then it’s a level playing field.”

Choice campaign director Christopher Zinn told The Australian “the big chains should recognise that it’s their high prices, limited range and poor customer service that increasingly encourage people to use the Internet.”

In a review by The Board of Taxation last year looked at the cost implications of scraping the tax free threshold on international purchases but the costs far outweigh the revenue they would collect.

Goods can sometimes be up to 30-40% cheaper than the in store prices which is much greater than the 10% GST and the associated costs with collecting this revenue.

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