Whilst I have little sympathy for retailers, there are a few points I would make.

1) 750,000 Australians rely on the sector for employment. These people DEMAND minimum wages. In the US retail staff are paid roughly half what Aussies get. Therefore harvey et al's business model has some inbuilt limitations that their competitors don't have.

2) Car sellers get this support. I want to know why its ok for the gov't to erect extreme barriers to privately importing a vehicle. A comparable vehicle in the UK can sometimes be less than half price.

BTW, the 3% figure is for ALL online sales. Overseas internet sales account for only 10% of that 3%. ie 0.3%. Weekend Australian Jan 8-9th

Thanks for the clarification PaulL regarding the 3% figure. I wonder how much that 0.3% represents in dollar terms. Yes, there are other factors like wages and conditions. There are many anomalies in the variations that affect the nature of global trade including standards of living for lower income workers not only in the US but in the developing world.

The US scores third highest on the Gini Score (behind Hong Kong and Singapore) indicating the third largest in income disparity. The problem is not the minimum wage but the degree of income disparity and the extent of profits in relation to fair wages and conditions. Many jobs in the US are barely a living wage and the number of working poor is much higher than in Australia.

http://finance.yahoo.com/banking-budgeting/article/107980/countries-with-the-biggest-gaps-between-rich-and-poor

Forrest where are you heading with the hidden agenda? The retail response seems nothing more than a knee jerk reaction to a potential reduction in profit? I had not seen Graham Y's letter - the response must be in the mail.

There was big kerfuffle within the Australian music industry on international competition but they were unwilling to take a cut in their own large incomes or bottom lines. Wages always seem to be the fall guy in relation to competition issues to distract from obscene profit margins.

There are certainly many issues in this debate and cutting prices does not seem high on the retail sector agenda as a means of competing. Huge mark ups are the problem in Australia for some products but others like the book industry work on a much lower mark up relying on a high turnover. Supermarkets also operate on lower markups but have the advantage of stocking essential items so turnover might fluctuate throughout the year but won't diminish due to international sales.

In principle it is not a level playing field when there are differing conditions surrounding imposition of GST on international sales. The UK and US have recognised this, I wonder if the Australian Government will address the issue or put it in the too hard basket.

Go to the online 'shops' of the entrepreneurs like Gerry Harvey who are complaining and you will see that they are dinosaurs.

Their 'problem' has sweet bugger all to do with GST and is rooted in their unwillingness and incapacity to adapt to the changed marketplace. Many of the local businesses they are own or are defending don't even give prices on-line and even when you read their paper trash-mail flyers they often rely on slightly changed names and models of appliances to avoid comparison and competition.

Fact is, the 'wholesalers' with their discount barns scoffed derisively at retailers in shopping centres for not being up with the times and now that they themselves are faced with competition from a superior business model they are bleating for guvvy assistance, socialists all.

*and is rooted in their unwillingness and incapacity to adapt to the changed marketplace. Many of the local businesses they are own or are defending don't even give prices on-line*

I have a sneaky suspicion that some of them are adapting, but in
a different way then you may think.

I bought a Sunbeam Cafe series food processor some months ago and
shopped around online. I can't even remember the name of the
online company. Lo and behold, when it turned up, it had a
Harvey Norman sticker on it. So I'd say that they either sourced
it through Harvey Norman or Harvey Norman are marketing online under
different names.

There are good reasons why Harvey Norman would not publish all
their prices online. Their's is not a lowest cost discount dealer
model of business. They would rely on some customers just walking
in the door without shopping around too much and paying the price
on the card. That is where the healthy profits are.

So if Harvey Norman were to market online, it would make good
business sense to market under another name, so as not to cut into
their bricka and mortar profits. That was my conclusion, when the
processor arrived with their label. Perhaps somebody forgot to
remove it.

I'm fine with big retailers and big profit margins - if their business model works, I don't object to their success and I certainly don't object to them grabbing every cent consumers are willing to pay. After all, if I was a retailer, I'd hope to make big profits for myself as well.

What I do object to, though, is the stance Gerry Harvey and his less vocal partners are taking. In essence, they are looking to protect their business by implementing measures deliberately designed to make things less affordable for us, the consumers. He doesn't want the GST to apply to online imports because the government needs - or is entitled to - the money; he wants it so the prices go up and we are forced to spend more money online or shop the old-fashioned way. He hasn't even bothered to disguise this fact. What this means, then, is that he wishes to worsen our lot in life in order to safeguard his own.

Hopefully some of the legal experts can help with this question:

If I make a purchase online (say, as I did recently, I bought a cycling jersey from the USA), where does the sale take place? If, as I had assumed, it takes place in the USA, can the government charge me GST on it? As for import duty (or whatever it's called), surely if they can tax me on a cycling jersey from the USA, they should also be taxing me on any souvenirs I bring back from an overseas trip?

pelican asks, in response to my post of Sunday, 9 January 2011 at 3:48:22 PM:

"Forrest where are you heading with the hidden agenda?
The retail response seems nothing more than a knee jerk
reaction to a potential reduction in profit?"

If I may deal with the second question first, I simply observe, courtesy of the clarification posted by PaulL as to the GST-exempted overseas online transactions constituting not more than 0.3% of retail sales, that the potential reduction to Australian off-line majors' profits is even more miniscularly small than that.

So far as my (few) overseas online purchases are concerned, Australian retailers, online or off-line, are not even in competition for these sales. The products I buy online from overseas suppliers are products that are simply not available from any Australian retailer. There is no direct price comparison being made: I am simply buying therapeutic and dietary supplements relevant to alleviation of a medical condition from endorsed reputable overseas suppliers in a situation where no local suppliers exist.

If, as a consequence of this campaign that Gerry Harvey has been so foolish as to front, I have to pay GST in addition to what I presently pay for these supplements, then that is by an equivalent amount so much less discretionary income I will have available to spend in the Australian retail sector for my other requirements. How smart would that achievement be on behalf of the local retailing non-adapters, Gerry?

I suspect many of the presently GST-exempt overseas online purchases would fall into a similar category to my own purchases. The local retailing industry isn't even on this playing field to be concerned as to how 'level' it might be. That is where this minimally and grudgingly quantified campaign is so deceptive. Prima facie, it makes little sense.

That is why I look for a hidden agenda. As to where I am heading with it, the answer is: wherever any evidence that stands up takes me. This is OLO, not the MSM. Others' substantiated ideas are most welcome, pelican.