Way back in 2011, around the same time it announced the closure of the Tuggeranong store, Myer announced it would be opening a store at Westfield Woden by the end of 2013. According to various announcements from Myer since then, the store has been ‘delayed’ several times since. But as recently as November last year Myer was still ‘committed to a new store at Woden’, to open by the end of 2015.
Now, in its full-year results for 2013-14, released on 11 September 2014, Myer announced that, as part of ‘optimising their store network’, it has made a decision not to proceed with the store at Woden after all.
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dungfungus said :
Main reason would be the billions of dollars revenue the government would lose. This shortfall would need to be made somewhere else either by increasing an existing tax(es) or creating a new tax(es).
There are varying factors why the Australian goods sell for 30-50% (sometimes more) more than the equivalent o/s product. Often there is a middleman here, a wholesaler or distributor, who buys direct from manufacturer (or sometimes another wholesaler) and adds their layer of profit before selling to the retailer. This could be overcome by retailers shoppoing around for different suppliers (either local or o/s) but sometimes small retailers don’t have the resources (staff and facilities) to do this and might be required to bulk buy a year’s worth of stock to get a decent price.
Then there are retailers who have shops in malls like Westfield Woden or Belconnen. Retailers are charged very high rents and I believe also have to pay a percentage of their turnover (not profit) to Westfield.
Also there is the cost of hiring staff which can be quite cost prohibitive when you add all the on-costs like public holiday loadings, superannuation, worker’s comp, sick/holiday/maternity/paternity leave. So to pay someone a wage of say $50K, the actual cost to the retailer can be over double that.
It’s obvious from comments on this thread that Australians don’t really care about the survival of Australian retailers.
This includes shoppers and governments, the former group loyal to the cheapest price and the latter entity preferring to embrace the multinationals (especially Europe/Scandinavia) which is a latent “cultural cringe”.
I saw on TV last night that two new German retail chains are opening in Australia following the highly successful Aldi model (another one that the ACT government cosseted to get them here).
I am wondering how all this will end. I guess most shopping will soon be done on-line and the huge Australian shopping precincts that can’t compete will simply close.
Anyone got any ideas on where things are going?
watto23 said :
Exactly. If 10% savings was the only benefit to buying from overseas, then nobody would do it. The fact is the savings are often in the area of 30-50% depending on what it is you buy, plus there is the advantage of having a much larger selection to choose from. Even if GST was added to imports, I’d still be buying from overseas because it would still be cheaper.
I’ve tried repeatedly to buy locally because I’m impatient and would rather not have to wait for shipping. I’ve lost count of the number of times I’ve gone to a shop only to be told they don’t have the product in stock, and I’d have to wait a week. If I have to wait a week, I’ll just order from overseas and save the difference in price. Especially when the “service” I receive locally often leaves a lot to be desired.
Australian retailers on the whole are need a big shake up. For starters, “recommended retail price” doesn’t mean “just charge this price, and no less”. It’s a recommendation. Four shops in the Canberra centre all selling the same watch, for the exact same price. Price it 5-10% less the RRP and generate some ACTUAL competition. If they want people to buy locally they need to give us a good reason to. Currently, very, very few of them do.
I hope Mayor Rattenbury doesn’t see this and get any ideas about our council supporting Myer in Canberra.
https://au.finance.yahoo.com/news/myer-development-deal-hobart-lord-010245823.html
Then again, they have given a lot of freebies to IKEA.
It may not be getting Myers, but Woden is getting Harry Hartog (mainly books, apparently) – so we’ll have to see how range and prices compare to the online alternatives.
On the broader, and now much-debated, question of GST on private imports, I hope that any changes to the current rules are clear and consistent. In the early days of the GST, I believe it was charged on anything over $500 (the $1000 figure came in later) and, in practice, it seemed to depend on whether an item came by air or sea as to whether it was caught in the net.
watto23 said :
Of course there is a cost to collecting the GST where it is payable and this is where it is so unfair.
Why not exempt GST on all imports, irrespective of the amount? I would love to hear your take on why this cannot be done.
Also, you would be aware that most on-line purchases from overseas come by air-freight. Are you comfortable with the carbon footprint associated with this?
I can’t see the association with GST and the duty free allowance. I think you left a word out somewhere.
Finally, the way you attack “the wealthy” leads me to believe you are one of the entitlement cult and you are going to milk the GST free under $1,000 for all it is worth.
You realize of course that while you currently use the Australian retail price as a comparison to feel good about how much money you are saving, think again what you are going to compare prices to when Australian retailers cease to exist and you are forced to buy on-line, offshore.
We will see who gets screwed then.
dkNigs said :
And there is still a cost to collecting the money. The extra storage space, extra staff to deal with all of this. It won’t stop me shopping overseas. I don’t shop overseas to save 10% GST. Its never ever been the reason to buy overseas. So local retailers still lose out because people won’t buy locally. The money gained will barely cover the costs of collection. Also regardless of thresholds, if it was $100 and I’m buying a heap of electronic components from HK, I’ll buy $99 worth. Then if i need more put another order in for $99. This is no different to big corporations dodging tax, or the wealthy use tax concessions to make more money. When the GST limit is currently set is because it also mirrors the duty free allowance.
They can squeal all they like, but plenty of evidence of it being done properly and making money in Australia and those retailers get rewarded by the Australian public.
dungfungus said :
Right, because we’re all going to stop buying things overseas for 40-50% less because you want the government to charge us 10% GST? Australian retailers need to adapt, and if the current distribution chain is the problem, they need to start direct importing themselves and leave the distribution chain to starve.
JC said :
When the GST was introduced by the party that is always cleaning up Labor’s mess, the volume of low value imports was very small. The phenomenon called on-line retailing changed all that.
It is interesting to note that Customs have now computerised all large value import entries so all the paperwork is done before the sea container clears the port of departure. These are the shipments that are subject to GST; the same shipments that Gerry Harvey gets and on which GST is paid before the importer even received the container.
I am sure Customs can adapt their software to cater for the millions of under $1,000 purchases that are currently GST free. Australia needs this lost revenue and our retailers need a level playing field.
Funky1 said :
How about the headline?
The costs of collecting are just a red herring. Why can’t they be added on to the GST that isn’t being collected?
And why can’t the system in place continue to be used? If the receiver of the goods completes the entry documentation and avoids using a Customs agent the costs are peanuts but the GST has to be paid.
dungfungus said :
For what it is worth I actually support the GST and I reckon it was one of the best things that Honest John did whilst it was in power. I doesn’t matter who did or didn’t support it at the end of the day.
My core issue is your constant blame of Labor in every thread. Simple fact is the Liebrals introduced the GST, they didn’t see fit to charge GST on low value inports. Seven years later Labor got in power and for their 6 years didn’t change the policy either. Though I think they may have increased the threshold, though in real terms it stayed the same. Your Liebral mates have now been in power for 1 year and they too have not made any changes. Yet by your calculations and thinking it is all Labors fault.
Oh nothing wrong with my spell checker either, after Abbott got into power it changed the spelling of the part to better reflect their characters, which is a bunch of liers.
dungfungus said :
So what part of this article did you want to bring to our attention? This quote?
“It came down to cost. The report found lowering the threshold to $20 would raise in excess of $550 million in tax revenue but the cost of processing using the present system would escalate to more than $2 billion – more than three times the additional revenue collected.”
Thanks for that.
BTW, not trying to put anyone on trial here, just annoyed when people post comments or dismiss other peoples comments, without backing them up.
Oh and thanks for picking up on my typo. 🙂
dungfungus said :
Exhibit 1 for the accused:
http://www.smh.com.au/business/retail/overseas-loophole-costs-620m-in-missing-gst-20130819-2s6lk.html
How deep do you want me to dig?
Funky1 said :
Looks like Gerry Harvey and I are on trial with the self-appointed RiotAct Star Court presiding.
I better get legal advice.
PS It’s a thread, not a tread.
dungfungus said :
Just about every comment you’ve made on this tread!
But let’s start with the most recent:
“That is an interesting read authored by people who have never completed a Business Activity Statement it seems.”
Fact or just your opinion? Please clarify
“Also, while it may be true that “Australian based retailers” now account for nearly 75% of online sales in Australia, the goods are mainly sourced from overseas suppliers/warehouses direct to Australian customers and as a consequence, most, if not all, are GST free.”
Again, fact or you opinion? If fact, please provide source data.
“Interesting also to note that the article doesn’t state how much GST was actually collected from online sales and this would be because no one knows as no attempt is made to collect it.”
Once again, fact or your opinion? Please clarify.
From previous comments:
“Tell me all about the “cost of collecting”.
This was just a general statement by Labor so they didn’t upset the voters. It would actually cost the taxpayer nothing because all costs would be recovered as part of the process.”
Source was mentioned in the article. What’s your source of it just being a “general statement by Labor”? And where are your supporting figures that “it would actually cost taxpayers nothing”
“That is a very myopic view. Prices in Australia are not exaggerated – look at the horrible trading results they are announcing”
Other contributors have given actual examples of exaggerated local pricing, yet you state that this is not the case. Any proof to discredit their examples?
“Actually, kids these days do not want to work at weekend and even if they did employers can’t afford to pay the penalty rates.”
Once again yet another throw away comment with no actual backing or evidence.
These are the things that “bother me”, “exactly”.
EndofRant
It’s the method of collection that would create the costs. No GST would be collected by the overseas retailer so it would have to be intercepted and collected onshore.
1. Parcel or envelope comes in, hopefully with a declaration on the outside that says how much it costs.
2. It is intercepted and held at the entry port
3. Depending on the type of declaration it may be either manually or automatically checked and recorded. A certain number will have to be checked to ensure compliance, otherwise everyone simply cheats.
4. A demand for payment is sent out to the receiver.
5. If COD, the parcel is held at the Post Office until the person comes in and pays the GST.
6. If not COD, then the demand is sent out via electronic or paper mail and the item held until the GST is paid and it gets despatched.
7. While the parcel is held the holder is responsible for it, including for any ‘shrinkage’.
8. A certain percentage will result in non-collection by the addressee (especially at the smaller value end) and the abandoned parcels will need to be collected and returned to a storage facility waiting for periodic auctions.
And that’s why they decided that punishing the consumer so that the Gerry Harveys don’t need to compete on service and innovation is a pointless exercise.
dungfungus said :
Well if that occurs that is Customs fault not the buyers. They are in charge of levying the GST often via the post office. I’ve paid GST every time I’ve bought something overseas that was over $1000.
Although with regards to camera equipment which is interesting, its mostly made in SE Asia for a Japanese/Korean based camera manufacturer. The markup is often purely selfishness or poor business practice. I have to say the importer though for Pentax/Sigma has started to offer much more competitive pricing to retailers and even set up their own webstore. At one stage they were selling a particular model of camera for the cheapest price in the world. So it can be done. That is the point, if a few retailers and importers can do it and stay in business, then the others complaining need to fix their business model.
Funky1 said :
I have been filling in BASs every 3 months ever since the GST was introduced. I think I know what I am talking about.
Having said that, I do not profess to be an expert on these matters but I am always open to correction.
Tell me what it is that bothers you, exactly.
dungfungus said :
Oh please provide evidence of your claims.
Everything (and I mean everything) that you have said is purely your opinion. You have not provided any facts or evidence to support any of your claims.
JC said :
The GST was actually first mooted by Paul Keating but his Labor colleagues saw it as electoral poison and it was dumped as policy.
You need to use your spell-checker more often, the word is spelt Liberal not Liebral.