This is exactly the sort of protectionism we need to avoid. Retailers need to adapt to be able to compete with online sales. Being a middle man is not an essential industry for Australia. Compete or perish.

Be interesting to see the amount of retail space per person as a comparison with the USA.

The number of shops may be much higher in Australia thus putting up costs.

It worries me to see no customers in some shops when window shopping.

There is a fine line between protectionism and allowing in multinationals to form what are essentially monopolies.

With the loss of many Australian manufacturing industries, there has also been the loss of many Australian retailers, allowing in multinational companies to basically form monopolies and begin making huge profits.

EG.

"Woolworths has reported a 10.1% increase in net profit, to a total of $2 billion"

http://www.ausfoodnews.com.au/2010/08/26/woolworths-reports-solid-profits.html

Now that the multinational have such a stranglehold over retail, they can begin to charge whatever they want.

"employee wages and salaries account for only 10-12 per cent of the value of retail sales"

I would assume that this means that wages in retail are only 10-12 per cent of costs. In manufacturing wages are normally less than 20 per cent of costs, and the excuse that we cannot compete in manufacturing with foreign countries because our wages are too high holds no water.

Wages are only a small part of costs.

Last weekend I ordered 4 books online from the USA. They cost $136, including delivery. The cheapest I could have bought the same goods from an Australian retailer was over $200. I have never found a book or books from Australian suppliers even remotely close to within 10% of the overseas price, especially now many overseas suppliers no longer charge postage.

This website helpfully identifies the costs including postage of buying books and CDs from Australian and overseas suppliers. Can anyone find a book or CD that would be cheaper to buy in Australia if 10% GST applied to imports?

http://booko.com.au/

Vanna, I think you are confusing cause and effect. Wages are a relatively low proportion of manufacturing costs because Australian manufacturing has moved away from producing low value-added labour-intensive products like clothing and footwear and focusing on more technological and sophisticated products requiring more highly skilled labour and sophisticated technology

Rhian, What "technological and sophisticated products requiring more highly skilled labour and sophisticated technology" are you talking about?

I haven't noticed anything.

As for books and CDs, there probably won't be that much produced in Australia in future years, as the large publishing houses usually have a multinational as the parent company.

Instead of free trade, read multinational.

When did Woolworths become a multinational? It is an Australian company, founded in Australia, floated on the ASX and operating in Australia and New Zealand. It has no connection to the American Woolworths, the European Woolworth or the (now defunct, I believe) British Woolworths.

That said, Woolworths Limited sits in a similar place to the other Australian retailers whose profits look to be cut by the online shopping phenomenon. Luckily for them, things like fresh produce will no doubt continue to be sourced locally. This may allow them to outlast the less competitive small businesses who rely on the sales of items now sourced easily and cheaply online.