GST on Imports

[artme]

I think this debate will heat up a little more now that thd, campaign has begun.

It would be interesting to see what proportion of internet sales take sales from the likes of whinging Gerry.

I know several people in trade jobs who buy from the internet because what they want simply can't be obtained here at anywhere near a reasonable price. one fellow I know was told a certin pulley would set him back "about $100 plus GST." Obtained for $9 on the internet and landed in 4 days!

There must be a pretty large slice of internet trade of this sort.

As for some of these big retailers, we need to look at ALdi.Now I reckon I can shop at aldi and with the money saved, buy half a tank of fuel much better than the miserable 4c/ltr. offered by Colesworths. Note: despite the increase in the cost of fuel, the discount has actually decreased in percentage terms.

Apparently Colesworths say they cannot compete with th Aldi business model! Maybe it's time for a model change!

[lightwood]

The proof of the pudding....
Decided to shout myself an iPod today because I was given a flash Bose iPod dock for Christmas that works fine with the phone, but there isn't enough storage on it for all my music. The kids tell me I need the 160gb one, so with $320.00 in my pocket, off I went today to get some sushi for lunch and a walk around to the hifi shops.

Dick Smith...OUT of STOCK, no worries, I'll just go around to JB....OUT of STOCK too....oh well, I'll just drop into the Good Guys around the corner from home...OUT of STOCK also.
Looks like I'll just have to buy it on the net...

Don't listen to those jerks, if they at least have the stock to sell, I would have bought it TODAY!

Regards,
Mr. Grumpy
aka Peter

[Bob38S]

And, if they get what they want can you imagine the complete GST equivalent being passed on to the consumer? ....
Cheers,
Jim

Yeah, right and if anyone believes that then I have a question for them........

Are you interested in scrap metal or roadbase?

I know a mate who is selling this large bridge in Sydney for scrap and another who has the mining rights on this big rock in central Oz. Just PM me your bank details and I'll send you the details for my Nigerian bank account.

[jimbur]

Yeah, right and if anyone believes that then I have a question for them........

Are you interested in scrap metal or roadbase?

I know a mate who is selling this large bridge in Sydney for scrap and another who has the mining rights on this big rock in central Oz. Just PM me your bank details and I'll send you the details for my Nigerian bank account.

PM on way, also in market for a musical venue.
Cheers,
Jim

[jimbur]

It seems that the kitchen has become too hot for Gerry. He's upset at the robust feedback he's been getting from consumers.
Cheers,
Jim

[acmegridley]

Yeah he might be missing a few bucks poor old bugger

[cultana]

one thing I have not quite worked out with this:
Do they want
a.) GST and import duty
or
b.) just GST?

Seems the latest excuse is rental costs for their overheads....

The odd bit is most have a very poor internet sales profile anyway.

[Gwhat]

Hi,

The purpose of the Free Trade Agreement (FTA) with the USA was so goods manufactured in either country could be traded Duty Free, GST would still be payable here in Oz. The risk when the agreement was drafted was that goods from dutiable countries would be shipped via the US and slip in as part of the FTA. The GST & duty free limit now applies to goods landed for less than $1000 AUD irrespective of their country of origin.

I can see both sides of this argument, we all like a bargain, which is probably the reason Harvey Norman is there instead of the corner electrical store, and Bunnings is there rather than the local hardware.

If we take this further, we're really asking the major retailers to act as the showroom for us to browse in, while we order off shore?? Retail space is expensive, local staff are expensive and can only be paid for from sales.

I'll bet HN has experienced (as we have) the story..... 'my brother was in the US and brought me back a XYZ, it doesn't work can you help me, you're the local agents for these'

My concern is; we used to have a manufacturing industry that gave our kids jobs, will we be saying one day 'we used to have retailers'?

The request is simple, an enquiry to review the impact of this on the local economy. Once the facts are known decisions can be made. Governments are crafty, if they miss out on income in one way, they'll get it another... perhaps an across the board hike in the GST rates.

I hope that this isn't seen as a whinge, but as a bit of background to what is a complex issue.

Regards

Grahame

[Big Shed]

Grahame, you make some valid points and I understand your perspective.

The real reason that people shop on the internet however is not to avoid GST, that is only a side benefit.

The real reasons that people shop on the internet are a combination of price, choice and convenience. When I buy tooling from the US, I buy tooling that is mainly made in China, just like I can buy here. Same quality, but at about 1/3 the cost. As I live in the country, delivery costs from Melbourne are almost as high as they are from the US, communication with the US supplier is invariably faster than it is with the local Melbourne supplier, choice from the US supplier is far superior to that offered by the local supplier and the US supplier is almost never out of stock. The local supplier is often out of stock with delivery times quoted, and usually not met, of 6-8 weeks.

Given all of the above is it any wonder that people choose to buy from overseas via the internet. My last shipment was just over $A400 worth, it would have cost me well in excess of $A1000 to buy from Melbourne, probably half ot the items would have been out of stock!

Local businesses have dropped the ball on internet shop fronts.
Try and do business with a well known business in Springvale or Dandenong via the internet or send an enquiry via email. You'll be turning to the US too.

Your business is a welcome exception, you have a very good shopfront on the internet (probably explains why my Incra LS25 was purchased here rather than from the US), you have obviously realised that without the internet your business would not have a long term future. The likes of Harvey Norman have not learned this lesson yet, and they are now running to government for thinly disguised protection.

[jimbur]

As Fred says, Grahame has some valid points. However, there is nothing altruistic in the current campaign.
To me retail should involve skilled, knowledgeable staff as well as a choice of products. The larger concerns are becoming more akin to warehouses and the knowledge often displayed is limited to finding a brochure produced by the manufacturer.
Cheers,
Jim

[beeroll]

I can see both sides of this argument, we all like a bargain, which is probably the reason Harvey Norman is there instead of the corner electrical store, and Bunnings is there rather than the local hardware.

Hi Grahame,

Reading the responses to this issue on various fora and newspaper comment sections, pricing is certainly part of the equation, but in many ways a bigger complaint is that there is a lack of service, range and interest on the part of Australian retailers.

As Big Shed points out, dealing with many Australian retailers is an exercise in frustration, with stock of common items often difficult to find, staff members reluctant to help, the level of product knowledge breathtakingly low, and order times long and frustrating.

Here's one example, a well-known equipment retailer had a sale in late October where the 12" Woodfast disc sander was on sale, and featured in their brochure. When I arrived at the store, there was no stock, and the lead time for new orders was put at 4-6 weeks. I placed an order, and called back after 4 weeks, only to be told that not only was the expected arrival time now "sometime in January", but my order had been summarily cancelled. I was given the generous option of being able to have one shipped from their Melbourne store, which had plenty of stock - as long as I paid the shipping, which put the item at over the regular retail price...

So now I have no disc sander, and from being neutral about this company, from whom I've never bought anything before, I'm hostile/contemptuous. More importantly, I've wasted a two hour drive out to a showroom and back, and half an hour on the phone conversation trying to figure out what happened to my order. All valuable time I could have spent doing what I love, and not what I hate.

My feeling from reading people's responses to this issue is that this experience is not atypical. It's not simply about prices. After all, consumers can't be that price sensitive, or places like Harvey Norman would no longer survive at all - other (Australian) retailers undercut their prices all the time. There are swags of online Aussie retailers selling, in particular, computer-related equipment, for close to "global" online prices, yet people continue to go to HN, Dick Smith, JB etc to buy those things.

I think if Australian retailers were anything like their good American counterparts - who are switched on, service and customer-oriented, progressive in both their sales channels and their product ranges, and willing to go the extra mile for you - there would be a lot less angst about price differentials, and anger at the attitude of big retailers. I would be happy to pay a little extra to be able to go to an Australian store, actually handle and see the products I'm thinking of buying, have an informed conversation with a staff member about whether I'm making the right choice, be able to see and handle the alternatives, and know that there is stock of each of them available.

(That being said, it often seems ludicrous that an individual should be able to order even large and heavy items from the USA, have them flown across the Pacific, and still have them arrive for half the price local retailers are offering - even once duties and GST have been factored in...)

People will often comment that the American market is cheaper because it's larger and retailers can buy in bulk etc. That is partly true, but what those low prices also reflect is that the US retail market is one of the world's most competitive - which means if you haven't got your act together, you simply will not survive. People forget that side of the coin when talking about American prices.

There is now a Productivity Commission review of the Australian retail industry scheduled - I will be interested to see its findings regarding the capacity of Australian retail to compete in a globalised market with all the above taken into account.

[robbygard]

Hi,

The purpose of the Free Trade Agreement (FTA) with the USA was so goods manufactured in either country could be traded Duty Free, GST would still be payable here in Oz. The risk when the agreement was drafted was that goods from dutiable countries would be shipped via the US and slip in as part of the FTA. The GST & duty free limit now applies to goods landed for less than $1000 AUD irrespective of their country of origin.

fair comment, although i think there were and are many bigger risks than that associated with the agreement

I can see both sides of this argument, we all like a bargain, which is probably the reason Harvey Norman is there instead of the corner electrical store, and Bunnings is there rather than the local hardware.

If we take this further, we're really asking the major retailers to act as the showroom for us to browse in, while we order off shore?? Retail space is expensive, local staff are expensive and can only be paid for from sales.

whilst YOU may see both sides, it certainly APPEARS that the bigger players are looking only at cost ... if you consider this thread, i think you will note that there are many observations and valid examples regarding poor service and whilst i acknowledge that price is also a consideration, i think it is superficial in the extreme to think that increasing the costs of these imports by 10% +$50 odd (as it currently stands) is actually going to make a difference to either service or price competitiveness ... (consider my two examples on page four of this discussion and the many others in the discussion) ... the big players seems to be ignoring this aspect or pretending that there is no other problem

I'll bet HN has experienced (as we have) the story..... 'my brother was in the US and brought me back a XYZ, it doesn't work can you help me, you're the local agents for these'

a very valid concern and unless (as is the case with some camera equipment) there is an international warranty on the product, i feel you would be justified in charging a service fee for this

My concern is; we used to have a manufacturing industry that gave our kids jobs, will we be saying one day 'we used to have retailers'?Grahame

this is also a valid concern and whilst i acknowledge that the retail industry has been, at least in part, responsible for the decline of manufacturing industries and also of squeezing the farmers, i don't subscribe to a view (as many others seem to) that they deserve what they get ... i think governments of both political persuasions have dealt with structural changes reasonably well, at least since 1982 ... i think that prior to that both were monumental failures

The request is simple, an enquiry to review the impact of this on the local economy. Once the facts are known decisions can be made. Governments are crafty, if they miss out on income in one way, they'll get it another... perhaps an across the board hike in the GST rates.

is that what their request is ... it doesn't seem that way to me ... there was already an enquiry mooted before they got involved ... it seems to me that they are trying to influence the outcome of the enquiry ... it also seems if they wish to limit terms of reference that way, we could all do without it ... by all means establish the quantum of the problem (anecdotally it appears that internet sales are only 2-3% ... i wonder whether that is true or whether the opponetns of the big fellows are doing their own disinformation) but surely we should also be looking for a wider voes by the productivity commission or from a government perspective it is an easy answer to do nothing ... small impact and increased costs to change (the $1000 was set, as i understand it, because it was cost more money than would be obtained to collect the gst on lesser amounts)

I hope that this isn't seen as a whinge, but as a bit of background to what is a complex issue.

Regards

Grahame

on the contrary i think it is good to get a bit more input like this .. it is very complex and much of the discussion that has been put forward seems either superficial or mis/disinformation


regards david

[cultana]

establish the quantum of the problem (anecdotally it appears that internet sales are only 2-3%

My apologies David for borrowing your comment but it does come to one of the main points of this argunment.
This value of internet sales 2 – 3%, what does it actually cover,
a.) total internet sales or
b.) total internet retail sales including all Australian and international sales not including ebay or
c.) total internet retail sales including all Australian and international sales and including ebay or
d.) just international internet sales?

Specific detail seems lost in the communication of the actual way this vale has been determined.

Now there would be some questions re Australian ebay i.e. sellers based in Australia and have ‘online stores’. Are these including GST in their pricing?
If these stores do so much trading one wonders why the government has not stepped in with the need for an ABN number and GST collection. Possibly worth looking at legally.

One thing that I do find somewhat odd with this rush re internet sales as little was being said even when the $AUS 1:$US 0.8 or less.

[Master Splinter]

This value of internet sales 2 – 3%, what does it actually cover,

8167.0 - Selected Characteristics of Australian Business, 2008-09

"Proportion of total income from sales of goods or services attributable to orders received via the Internet or web during the year ended 30 June 2009. "

[lesmeyer]

Just to follow on from the above. How would booking international holidays and flights while in another country be taxed? The idea of the banks collecting the tax was mooted at one stage. So how would they differentiate actual sales initiated from Aus vs say holidaying in another country as many businesses have obscure names on the credit card transaction? If the banks will not collect then we are back to agents collecting (Aus Post) and charging for this - hence the govt. saying it ends up costing more than the tax collected for purchases under $1000. I think the consensus is that the whole situation has more questions than answers at this stage and then there is of course the whole matter of the ordinary person wanting a Veeeery good deal. While a handful of businesses have adopted online trading in Aus, the others need to play catchup and do this fast. Oh, they also need to provide excellent service, knowlege of the products and maintain stock to actually sell the product - and lets not forget that most (not all) Aus online businesses deduct the funds from your credit card as soon as the order is placed. This is the most reprehensible act committed by these businesses. They should only deduct when the shipping takes place (equivalent to walking out with the goods).
These are just some of the reasons we purchase from LV, Rockler etc.
My tuppence worth from the wild west of OZ.
Les