While Gerry Harvey the Chairman of Harvey Norman Holdings was whinging about the fact that Australians are not paying 10% GST on Internet purchases made from overseas web sites, arch rival Myer was actually doing something about it.
According to Bernie Brookes, the CEO of Myer, his department store is setting up an online operation in China to sell goods direct to Australians. This he claims will allow them to avoid the 10% GST payment on goods up to $1,000.
Last month Gerry Harvey who has little if any online trading operation due in part to problems with his franchise model said that Australian retailers were set to suffer as a result of the lack of a 10% GST Tax.
Speaking at a lunch in Melbourne Mr Brookes said that Myer was creating the new site out of frustration over a lack of action from the federal government over GST-free shopping online.
Mr Brookes said that he wrote to Treasurer Wayne Swan four weeks ago to raise the retail and tax issue with him but to date had not received a reply.
He claims that the only way forward for retailers in Australia was to find a way to counter the competitive threat from overseas. ”If we can’t beat them, we’ll join them,” Mr Brookes said.
The move to establish an operation from Myers factory hub in Shenzhen could hurt Melbourne based online operator Kogan Technologies who is currently importing goods from China.
According to the SMH Mr Brookes warned that if the Myer website proved successful, he believed other retailers like Woolworths would follow and create their own sites, further eroding GST revenue for the government.