Want to pay more taxes on e-purchases? Well Aussie retailers want you in its latest protectionist moves.Major retailers including Harvey Norman, David Jones and Coles have proposed hiking a new tax on consumers in the hope of winning the battle against cheaper online e-tailers.
The proposed levy on all goods purchased over the value of $100 is the latest attempt by retailers to tax online consumers in the face of stiffening online competition offering cheaper goods and fast delivery.
Just earlier this year, a retail group representing a host of big name bricks and mortar retailers including Harvey Norman, Woolworths (owners of Big W and Dick Smith) and Just Group called on Canberra to introduce GST on all online goods purchased from abroad over $1000, which has now been upgraded to just $100, it seems.
Now the Australian National Retail Association (ANRA), in its latest submission to the Productivity Enquiry, has called for the new tax, with its Margy Osmond, CEO saying: “Australian retailers are cutting prices to the quick, but they still struggle to compete in a global environment where they pay duties and taxes that online importers do not.”
“They pay wages, rents, sick leave and other necessary benefits that overseas suppliers do not have to pay.”
The retail body also declined to make any further comment today.
The ANRA have also called on the abolition of customs duty on consumer goods, and a review of taxes on retailers competing with foreign companies.
But consumer watchdog Choice disagrees with the retail industry’s cries and believes retailers are getting their long overdue “comeuppances” from consumers fed up of being ripped off at Aussie tills, prompting them to seek better bargains online.
And “who can blame them [consumers] when Xbox 360 and PlayStation 3 games, for instance, cost 91 percent more from a major Australian online retailer than from an overseas online website based in Asia?” Choice said in its latest submission to the Productivity Commission, set up by Federal government to look into the retail industry here.
Digital goods are the worst rip off of all with the top 12 music albums costing, on average, 73 percent more on the Australian iTunes store than the US iTunes store, a Choice investigation found.
But it gets worse. Some Aussie companies are also using technologies designed to redirect consumers away from international sites, warns the watchdog.
“Some companies use technologies that block international IP addresses and push consumers to ‘local’ websites, even though parallel importing is legal in many cases.”
The explosion in overseas online shopping is an overdue comeuppance for Australian retail as a whole, believes Choice director of communications, Christopher Zinn.
“The pressure from overseas online competition is a much needed wake up for Australian retailers to be more competitive. We need to move beyond a complacent culture of high prices, high margins and poor service,” says Zinn.
This comes as a major campaign by the retail sector “to help Aussie rural and regional retailers to achieve business success online” is announced today, ironic considering, in the next breath, it is calling for more taxes on foreign operators.
“There are very real threats to the sector” the ANRA chief also lamented in its submission, claiming the right policy environment could ensure Australian retailers are “full participants” in the global market place and which “will encourage better deals for Australian shoppers,” a laughable statement in light of the new proposals.
It appears this new tax is largely a protectionist measure designed to prevent foreign retailers from making an impact on the market here and eating into dominant retailers multi million dollar profits.