There could be a mass exodus of retailers from Australia if the GST loophole isnt fixed
Click to enlarge
That’s according to Harvey Norman Managing Director Katie Page, who warned of a mass exit of local retailers from Australia, to low cost countries in Asia, citing Hong Kong in particular, if the government doesn’t act asap to fix the GST rules.
In her speech, reported in the SMH, Page said “advisers” are looking to lure “thousands” of Aussie retailers to Hong Kong, but then criticised the practice as “un-Australian” and the “worst thing Australian company could do.”
“They [other retailers] can actually be setting up in Hong Kong – anywhere in Asia now actually, Hong Kong is the favoured place. There’s lots of advisers of going around, speaking to thousands of retailers at the moment, saying, ‘Just set up the company in Hong Kong and ship into this country’.”
”How un-Australian is that?” Page also warned other companies would follow if Harvey’s did take the lead and jump ship.
The Harvey Norman boss was speaking at a superannuation conference in Melbourne yesterday, but her GST battle cry echos the sentiments of her husband and Harvey Chairman Gerry Harvey, who engaged in a very public campaign on the issue last year only to be lambasted by consumers irked at his attempt to raise the price of online goods.
The government is currently looking at changing the GST rules for goods purchased online from overseas and lowering the tax threshold from $1000 to just $30, meaning online goods bought from overseas may increase 10%, making price of goods bought locally far more competitive.
But Page, too, may soon be at the recieving end of the public’s ire, after she suggested Australians may not have a proper grasp on how the tax system works, and hit out at the government for not explaining it properly.
Online goods bought from international retailers currently accounts for just 2% of total sales here.
So, is Harvey Norman about to up sticks and move to Hong Kong?
Page said her company would take it “step by step,” but added:
“I think that is just the worst thing an Australian company could do. It could solve a lot of problems but, you know, if Harvey Norman did that, everybody else would follow. And that’s wrong.”
In relation to the current state of her company, which recently announced a profit drop of 32%, Page said critics simply did not understand how the company works and were too focused on the short term.