Now I am not an accountant or economist, however we are being sold the idea that imported goods that do not have GST added, is disadvantaging Australian retailers.

The example I will use, is that I was in the market for a new fishing reel. The Cheapest Australian price was $180, with most retailers at about $240.

Including postage, I bought 2 fishing reels for $180. Even adding the 10% GST of $18, still means I bought 2 fishing reels for the cost of buying a single one in Australia.

We are often sold the idea that increased competition, means lower prices. Yet barriers are introduced to protect the Australian premium on goods.

Why does the Australian premium exist?
Who benefits from the Australian premium?

Who benefits from the Australian premium?
Wolly B,
Probably people who are only Australian on paper.

Wally, its all about out of control costs.

Back in the early 90's, retail space where I had my business was charged at around $150 per M2. Today, that same space is charged at upwards of $1500 per M2. A ten fold increase.

Combine to that the cost of compliance, increased employment costs, increased everything, and there is your answer.

I said back when online shopping was gaining momentum, some 8 years ago, that it would be the demise of retail, and it will be simply because they don't have the costs associated with retail businesses.

While many argue that staff are still required to assemble and despatch orders, these warehouse style operation know in advance what they have sold and what needs to be despatched, which means they can set their staff levels accordingly. Retailers on the other hand require staff on hand, just in case they are needed as sales can fluctuate up to 40% on a daily basis in my experience.

Retailers also have the problem of window shoppers who are simply wasting retailers time to do their research, then buying online anyway.

So whats going to happen, as I see it is the larger retailers will survive as they also sell online and, as smaller retailers drop of the perch, these larger ones will have more bargaining power to negotiate better deals with land lords.

As for your fishing reel, I hope you are comparing the exact same product for starters. So if the cost price of the reel was say $120, then how can anyone with a retail shop and staff compete.

Finally, many online businesses today don't even employ many staff as they are simply the middle man as the order is dispatched directly from the manufacturer in the likes of China where wages are $2 per hour, not $25.

So while the GST is insignificant, its still just another nail in the retailers coffin.

This push for GST on internet purchases is not about tax fairness, rather about protectionism.

The cost to customs of processing a parcel for GST is at least $50, so anything below $500 costs more to process than revenue is collected. The proposal to pass this onto the customer means that for someone buying something for $100 will pay $60 in tax and processing.

Shadow Minister, "This push for GST on internet purchases is not about tax fairness, rather about protectionism"

I'd generally agree with that.

I would also say that there are businesses who have adopted unfair trade practices and are getting away with it. An example could be the refusal of manufacturers' distributors in Australia to provide the warranty of that original manufacturer where the product was not sold by them. Local distributors look up their list of the serial numbers of the products imported by them and refuse to handle any with numbers outside of those, despite the willingness of the original manufacturer to live up to its warranty.

<As for your fishing reel, I hope you are comparing the exact same product for starters. So if
<the cost price of the reel was say $120, then how can anyone with a retail shop and staff
<compete.

Posted by rehctub, Sunday, 21 September 2014 8:37:06 AM

The fishing reel was the same brand Diawa, except the size I bought was larger than the one available in Australia.

I estimate the actual manufacturing cost of this reel to be about $25, made in Asia.

Another issue is sinker moulds. In Australia they retailed for around $100 to $120 per mould. I got 5 from America for the same amount that one would have cost me in Australia. We forget that the retailer would have bought these at wholesale prices.

I do understand that for example the number Nikon cameras being sold Australia wide, will be the amount one store in America will sell in a year.

I have walked out of retail stores because I am sick of waiting for service. Especially when I want to buy an item, and there is no service.

Harvey Norman, I asked for a deal, cash, take away now, only to walk out and go to Retra Vision to find the exact same item for the price I offered Harvey