The National Retail Association appears to have gone into the spin doctor and “questionable” figures business in an attempt to back up the Chairman of Harvey Norman, Gerry Harvey who last year led the charge in claiming that online web sales and the lack of a GST on imported goods is hurting Australian retailers.The claim was rejected by the Australian Federal Government at the time.
First up the Association commissioned a report from Ernst & Young who concluded that 33,400 retail jobs might evaporate by 2015 if the federal government did not close the GST and import duties loopholes on internet shopping.
Peddling what was a classic tabloid headline that 118,000 jobs were set to be lost the organisations executive director failed to mention that organisations like Australia Post is choking on the volume increase in business from online resulting in the Company having to employ hundreds of additional people.
Nor did he mention the knock on effect to courier or logistic companies or even Australian airlines that are witnessing a “surge” in air freight into Australia due to an increase in capacity from consumers purchasing online and wanting their goods shipped within days.
He also failed to mention that retailers in Australia are losing business because they have been unable to offer consumers a “good in store experience”.
Not content with simply issuing a press release the association executive director Gary Black got his spin doctors to mount what appears to be a politically motived media program that kicked off with no other than the ABC, and their 7.30 program.
Other media organisations were left to suck on the left overs including several retail specialist trade publications who were not given a press release until Sunday morning, also missing out were business journalists from Fairfax media.
Already several media organisations are punching holes in the research and the way that the National Retail Association has gone about manipulating the figures in their own interest.
When Chris Uhlmann the 7.30 presenter introduced reporter Greg Hoy’s piece on Thursday night as ”the latest research obtained by 7.30” he failed to tell the audience that PR spin doctors for the NRA had handed both the ABC and News Ltd publications the research to them on a plate.
Now questions are being asked about the validity of the report.
In a report in the Fairfax media this weekend questions are now being raised about the 118,000 lost jobs forecast which is actually a forecast of the total number of existing and yet-to-be-created jobs in the traditional retail sector that could be transferred to domestic or online retailing businesses, plus jobs lost through industry restructuring, the newspaper said.
Fairfax Media went on to say ”Regardless of the LVT, the remaining 84,600 jobs would be lost to the traditional sector due to the structural changes and competition caused by the growth of online retailing,” said the Ernst & Young report.
They said that based on Ernst & Young’s own figures, even in the worst case scenario, the net number of jobs lost in retailing between now and 2015 would be reduced by fewer than 10,000 if the LVT is abolished, although the number of theoretical jobs created by Australians shopping at global internet sites would be cut by 30,000.
It also has to be remembered that E&Y’s estimate of the number of available retailing jobs is calculated based on its estimate that online retail sales are likely to increase by $27 billion by 2015 – and then working out how many jobs that would normally create based on a ratio of sales to employees.
The NRA’s release also selectively used information from the report, such as that 75 per cent of all non-food online retail sales would go to offshore retailers by 2015, and that the cost to Australia’s GDP would be $6.5 billion.
Again, E&Y has had to make assumptions that, if existing trends continue, then the lion’s share of online retail sales will head offshore. Or it may not.
The GDP effect is also a hypothetical calculation of the increased number of jobs that might be created in retail if tax-free imports are eliminated, and then working out the increase in GDP those extra jobs might create if they eventuate – coming up with an estimate of between $3.9 billion and $6.5 billion by 2015.
It also said that an equivalent hole in Britain’s Value Added Tax regime would be closed from April 1 because ”of the anti-competitive impact it has on the domestic retail industry”.
That is only half accurate. Britain is specifically shutting down a VAT-avoidance industry operating through the Channel Islands that has enabled all sorts of companies, including Tesco and Amazon, to sell stuff to British residents without VAT.
It had been estimated that 75 per cent of all parcels coming into Britain were Channel Islands purchases, which really hurt many independent music and DVD retailers. The government’s core concern, though, was that the economy had been hard hit by the financial crisis.