Amazon purchases and new GST Rules

[FenceFurniture]

I am sure he has enough coin to crawl back into his hole and live a good life without working another day if he wanted too.

And kee-rist I wish he would! Leave us to purchasing what we want from whom we please.

Mate it is dead simple, we are talking about an Aussie running an Aussie business that employs Aussies.......thousands of them. Tell me how buying from Amazon does anything good for the country apart from giving the mailman a job. Yes the individual consumer buying from a different economy benefits but at a cost to the Australian economy

This age old argument can be answered very simply: we do NOT buy overseas because of the GST. It's because of choice and the Australia tax. If companies like Makita, Bosch and several others can sell stuff here at prices that make it NOT worthwhile to import, then so can everyone else - it's as simple as that.

This whole drive to add GST to O/S purchases is not about reducing choice in specialised fields like members here are on about

YES IT IS!!!! It's all about reducing the range down to what lazy Harvey has available! I'll bet he whinges about Kogan too!

To be dead clear - I don't mind paying 10% GST on imports. It's not about avoiding that - it's about choices and the Australia Tax. But the way this has been set up is to make it so hard for overseas retailers that we will have no choice but to buy from Harvey - he thinks. He is just hiding behind the GST as an excuse - as I said before it's no benefit to him. If it was otherwise then it would have been much simpler to just lower the $1000 threshold to $300 (or whatever) and collect the tax at the border. The argument against that is that there will will be enormous piles of packages delayed waiting for GST payments to be made.

Well use some of the extra revenue to put on extra staff......



I have a question for you Beardy (to which I would really like an answer): Using beer as an example, should I purchase locally made beer (albeit by a multinational in many instances) or is it just as ok for me to purchase imported beer? This relates directly to your "an Aussie running an Aussie business that employs Aussies" statement. Which is the preferable purchase?

[Beardy]

I have a question for you Beardy (to which I would really like an answer): Using beer as an example, should I purchase locally made beer (albeit by a multinational in many instances) or is it just as ok for me to purchase imported beer? This relates directly to your "an Aussie running an Aussie business that employs Aussies" statement. Which is the preferable purchase?

Drink whatever beer you like, my preference is imported beer and I drive an imported car. Probably most of what I buy is imported my boots are Aussie made though. They are all purchased locally from a retailer providing Aussie jobs and paying taxes.
The whole issue with the likes of Amazon is the Aussie economy misses out. The government does not receive enough revenue to support our current lifestyle so they are trying to seal off the gaps where $ leaves the country
I agree with you about the loss of choice being bad but I would think that was just a result of being caught in the net of the main issue. No doubt there will be a fix to bypass the problem like drop shipping.
Most people are buying this way to save money though, lots of people select product and try on for size in a bricks and mortar store and then purchase O/S on line

[Fuzzie]

What about a scenario where an Australian resident has an income stream in the US being paid into a US bank account. The income is declared in Aus and as per tax treaties is included in the persons Australian income stream and taxed at the prevailing marginal tax rate. So tax is being paid on money created outside of Australia and not part of the Australian economy. If that money is brought on shore as a financial instrument no further tax is payable. If some of that money is converted into goods overseas and now brought into Australia a new additional tax of 10% is being added to bring it onshore. This is somewhat different to sending money earnt and paid in Australia offshore to buy goods.

[BobL]

Don't get me wrong, I'm a regular OS buyer but the more I think about it the more it appears that the real reason we are in this situation is the cost of transport is far too cheap.

If we factored in the real (long term) cost of burning hydrocarbons to transport a $1 plastic widget halfway around the planet the cost would be prohibitive. This has been deliberately engineered on the pretence of efficiency but its another way of making MONEY today and shifting the real cost of doing this to future generations

Its the same reason why milk from Vic is cheaper than WA grown milk etc. This should not be the case - it should be MORE expensive, not less, to do this. We should not be able to import European Mineral water or tinned tomatoes cheaper than we can grown them here.

When sea levels rise and we have to move every one on the world's major ports and most of its cities, then perhaps people will take notice and buy locally. Long term it would make us more independent, more inventive, and restrict physical trade to high value items that smaller communities cannot manufacture.

[FenceFurniture]

Mate it is dead simple, we are talking about an Aussie running an Aussie business that employs Aussies.......thousands of them.

my preference is imported beer and I drive an imported car. Probably most of what I buy is imported my boots are Aussie made though. They are all purchased locally from a retailer providing Aussie jobs and paying taxes.

These statements are at odds with each other. You are effectively saying that it's ok to import items into Australia as long as they are retailed here. That means that only the last part of the whole economic chain of events occurs within Australia. If you were really committed to your Aussie, Aussie, Aussie statement above then you would be purchasing only Australian manufactured goods. I'm no economist but I strongly suspect that the manufacture puts more stimulus into the economy than the mere selling of an item because manufacturing has a whole bunch of follow on effects.

In short, you are cherry picking to suit your answers and arguments.



With reference to my question about imported or local beer consumption: those who insist that we buy local product cannot possibly say that we should also be exporting the same product. It would be massively hypocritical to do so. The country to which it is exported faces the same dilemma, does it not? So by arguing that we should buy local but also export, those people are saying that we are a special case, that can have it both ways, and that is total bollocks!

Where do we draw the line on Tribalism? At the neighbourhood boundary? At the Suburb? At the State? At the Country border? What's the difference when we are all citizens of the world, and partaking in the world economy?

[FenceFurniture]

The whole issue with the likes of Amazon is the Aussie economy misses out.

Well I don't think that is strictly the case at all. If I can save $40 on an item that is $100 locally then that is $40 more that I have to spend locally, as the case may be. (it does not necessarily follow that I will spend the savings overseas as well - in my budget it is very unlikely % wise). In that example, I have paid $60 for the item, and let's say it has 5% Import Duty associated with it, and the postage is say $8.

I would then have to pay (upon arrival)
$3 for 5% ID, and
$7.10 GST (on price + ID + freight cost)
which is a total surcharge of $10.10
meaning my item has cost me $78.10.
That means I have still saved $22* (22%) that I now have to spend on something else, and that is most likely to be a local spend. It also means that the Govt has received $10.10 or 14.8% of my pre-tax spend ($68) which I think is a pretty good earner for the Govt.

I'm happy with that, just don't take away my choices, or force me to pay hideous Australia Tax.

* Actually the savings would be more like $30 because I didn't allow for postage in the local purchase.

Furthermore - the bloody package will probably get to me quicker from the USA than it will from Melbourne!!


The biggest problem with the current implementation is the actual collecting of the tax on goods <$1000. Remember all the angst back in 1999 when everyone realised that were to become Tax Collectors for the Govt? Well now they are trying to force overseas businesses to do EXACTLY the same thing. What motive do those businesses have to satisfy our miserable little market?

[FenceFurniture]

Something that nobody (Govt included) seems to have addressed is Import Duty. Is it also payable on <$1000 purchases? Presumably it must be, and perhaps the Govt and Harvey thing that all the overseas retailers are going to go through the unbelievable pain of determining what ID is applicable.

Anyone who has had to do it will well and truly understand what I mean. It's a bloody nightmare.

You can trust me - those businesses would laugh at the thought. So that means that either
1. the Govt is prepared to forego the Import Duty, which is very significant income - probably 25-30% of the GST revenue and so not to be sneezed at,
or
2. that they expect the o'seas retailers to collect it (just ain't gonna happen),
or
3. Import Duty will have to be collected at the border, so they may as well just collect the GST that way too and free up this whole disaster in the making.

Whichever way this is diced, it has been made a complete hash of, just to satisfy the King of Whingers.

[Drillit]

Well...talk about gouging...have a go at their woodturning tool prices vs. US prices. They would be delighted with this. Talk about a monopoly. I have not bothered to look at general items. But no Amazon for me. I am thinking that the GST costs may still be worth it. Drillit.

[FenceFurniture]

I can't recall seeing this covered anywhere.

If the retailers sells less than $75k pa to Australia then they don't have to register for GST. I imagine that would be a helluva lot of businesses. So how is the GST collected for purchases from those retailers? Not at all? At the border?

[ian]

Not at all -- I think

[bueller]

Never thought I’d see people singing Gerry Harvey’s praises, is that you Gerry?

Yeah he employs a lot of people under his franchises but he’ll wind up those franchises and leave them jobless in a moments notice if it suits him. Do a bit of reading and tell me he’s a man of the people.

https://www.afr.com/business/retail/...0161107-gsjz44

[Beardy]

These statements are at odds with each other. You are effectively saying that it's ok to import items into Australia as long as they are retailed here. That means that only the last part of the whole economic chain of events occurs within Australia. If you were really committed to your Aussie, Aussie, Aussie statement above then you would be purchasing only Australian manufactured goods. I'm no economist but I strongly suspect that the manufacture puts more stimulus into the economy than the mere selling of an item because manufacturing has a whole bunch of follow on effects.

In short, you are cherry picking to suit your answers and arguments.



With reference to my question about imported or local beer consumption: those who insist that we buy local product cannot possibly say that we should also be exporting the same product. It would be massively hypocritical to do so. The country to which it is exported faces the same dilemma, does it not? So by arguing that we should buy local but also export, those people are saying that we are a special case, that can have it both ways, and that is total bollocks!

Where do we draw the line on Tribalism? At the neighbourhood boundary? At the Suburb? At the State? At the Country border? What's the difference when we are all citizens of the world, and partaking in the world economy?

We are talking about purchasing not manufacturing. Manufacturing is already dead in this country, my reference relates to at least giving the locals a drink where practical at the retail end. The manufacturing stimulus for this country has already gone. I don’t insist on buying local product as I have said before, I buy whatever I prefer at a price point I am happy with. I just don’t like it when people look at local to O/S pricing and think that someone here is making a killing from it, retail in Australia is tough to make a living.

I am am not going to continue banging on about it but my points in this discussion were

- local retailers are not ripping us off, they are operating under different circumstances to other world economies so you cannot do a direct comparison to what you can buy for from other countries. Likewise there are plenty of countries that make our prices look like bargains for the same product.
-supporting local retailers where possible ( including the likes of HN) has a positive impact on our economy
- purchasing on line from O/S supports the purchaser only and yes I still buy bits and pieces this way as well

[FenceFurniture]

https://www.afr.com/business/retail/...0161107-gsjz44

There's a pay wall on that.

[FenceFurniture]

Manufacturing is already dead in this country. The manufacturing stimulus for this country has already gone.

And the 20th Century Bricks & Mortar retail model is following suit (around the world). Those that survive will be those that best adapt - that will not include Harvey. I forget how long it took him to establish an online presence, but he'd well and truly missed the boat. He needs more people like Kogan kicking his butt.

my reference relates to at least giving the locals a drink where practical at the retail end.

Yes, so do I - they just happen to be selling different stuff that I purchase with the $30 I saved. It doesn't matter what the "stuff" is, as long as money is spent within the Australian economy (but again, that goes back to where do we draw the Tribalism line?).

I just don’t like it when people look at local to O/S pricing and think that someone here is making a killing from it, retail in Australia is tough to make a living.
- local retailers are not ripping us off, they are operating under different circumstances to other world economies so you cannot do a direct comparison

In general, I would agree with you and it is not all retailers by any stretch, but unfortunately there are some who bring in specialist gear with agreements that retailers from other countries are not allowed to sell to us. They then take that as an excuse to charge whatever they like, but moan like buggery when we decide to circumvent their excesses.

You joined the forum a couple of months ago, and so would not have seen the countless discussions about pricing of a particular elite brand in Australia (although perhaps you may have as a lurker). At least every 6 months.

Some accessories are 4x the price here that they are in Europe, and 3x for accessories is very common (I haven't checked prices for a year or two). Not making a killing? Puh-lease! Why do accessories have to be 4x when the tools themselves are a mere 40-100% extra? What's the difference - it's all capital tied up and stuff in warehouses waiting to be sold. As I said before, if Makita, Bosch, et al can sell tools here for a price that makes it not worthwhile for us to import them, then so can everyone else. Yes it will be more, yes there will be GST, but just keep it within reason. My rule of thumb was that it had to be more than 15% cheaper after freight to be worthwhile losing the warranty for, and for non-warrantable items such as accessories it had to be 10% to be bothered (and only at the same time). Saving the 10% GST was just a bonus.

I am am not going to continue banging on about it but my points in this discussion were

Yep, fair enough, reckon I can draw a line under it too, pending new developments...

[Beardy]

Never thought I’d see people singing Gerry Harvey’s praises, is that you Gerry?

Yeah he employs a lot of people under his franchises but he’ll wind up those franchises and leave them jobless in a moments notice if it suits him. Do a bit of reading and tell me he’s a man of the people.

https://www.afr.com/business/retail/...0161107-gsjz44

The article is locked to prescribers only so could not read it but have a fair idea of how it goes.
I don’t doubt he can be a hard man too, you would have to if you want to survive. I know of one of his franchisees that didn’t see eye to eye with Gerry and didn’t last long but know of many others who have done alright with the alliance as well.
I am not a Gerry lover nor did I say he was a man of the people, you can’t be and be in business. I am just not a fan of the typical tall poppy syndrome knockers who dislike anyone who has become successful or wealthy.
i have worked for some of the wealthiest people in Australia as well as the Aussie battler types as well and I have found the amount of money they have has never been a measure of the person. A-holes are still a-holes whether they are rich ones or poor ones it doesn’t matter.