10% Internet Tax Campaign Dead In The Water

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The campaign backed by Gerry Harvey, Solomon Lew and Myer group to have GST collected on all Internet purchases from overseas, including those costing under $1000, appears to be floundering rapidly, with a major group of retailers now actively opposing the move.A senior Harvey Norman executive who attended CES said that the campaign was “bad for the company” and should never have been started. (I think Gerry Harvey agrees with this sentiment).

The Fair Imports Alliance, which represents a coalition of retail and wholesale industry associations yesterday called on the Harvey-Lew-Myer group to drop their campaign which they labelled “an unmitigated disaster”. The alliance is led by the Australian Retailers Association, the Australian Sporting Goods Association and the Australian Booksellers Association.

A newsagency software group has produced “Wake up, Gerry” posters urging Harvey to abandon his stance.

Already Prime Minister Julia Gillard and Financial Services Minister Bill Shorten have made it plain they’re unlikely to endorse the GST move which would be hugely unpopular with the voting public.

Fair Imports Alliance spokesperson Brad Kitschke called the Harvey-Lew coalition a “johnny-come-lately group” whose campaign had proven “a public relations nightmare” for the broader retail community.

“The issue is broader than just the GST,” he said. ” It’s about custom duties, illicit trade and consumer protection. Consumers have rightly rejected this campaign by the big retailers. They have not done their research and they are asking the Government to implement a solution to a problem that goes well beyond the GST. They have just got it wrong,”

Kitschke also told the AAP news service the problem isn’t individual consumers buying goods tax-free online but rather people running “de-facto businesses” by re-selling overseas goods through ”pop up stores” or on eBay in Australia.

”They’re not paying the GST or customs when the goods are brought in and they’re most likely not paying income tax, yet they’re competing with legitimate wholesalers and retailers,” he claimed.

Another spokesman told ABC News the Harvey group had achieved the opposite of what it was seeking by advertising to consumers how they could get better deals.

A Channel News report this week noted the Samsung Galaxy Tab device is available online for $500 from US retailers, but is priced at A$899 in Harvey Norman and other stores – suggesting imposition of GST at 10 percent is unlikely to drive one customer Hardly Normal’s way.

The Fair Imports Alliance is backing a Productivity Commission inquiry into the retail industry which is due to report by the end of the year. It will examine the current structure, performance and efficiency of the retail sector and “will consider the broader issues posed by an increase in online purchasing by Australian consumers and the role online purchasing plays in providing consumers with greater choice, access and convenience”.

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