Last week Harvey Norman billionaire Gerry Harvey was whinging about the Melbourne Cup this week he has let loose with a spray at Australia Post.
Harvey who a decade ago said that Internet shopping was a fad that would not last and last week reckoned that the Melbourne Cup was on a “dangerous path” by letting foreign raiders dominate the big race. (His horse failed to win).
He has also lobbied the Government over a lack of GST on goods under $1,000.
Now he has slammed Australia Post for what he describes as “aiding and abetting” consumers to avoid paying a goods and services tax.
What’s got Gerry Harvey’s nickers in a twist this time is the announcement last week of Australia Post’s ShopMate service that allows consumers to buy goods from American online retailers have them shipped direct to Australia Post centres who then forward them to Australian customers.
This is the same guy whose stores are flogging a SanDisk 64GB Micro SD Card for $159 when the same card is selling in Best Buy stores in the USA for US$37.44.
Currently consumer electronics goods purchased overseas are GST-free if less than $1000 – an exemption Harvey Norman management hate.
Gerry Harvey claims that the government who own Australia Post was in effect subsiding tax avoidance.
He told the Australian Financial Review “When you keep promoting something, and it is a good deal for a lot of people, let’s face it – they’re going to get used to doing it now year in, year out.
“I can’t understand why anyone would think that it was morally OK to dodge GST by buying stuff overseas – that that was fine.
“And to be aided and abetted by a government agency, [that] just defies any logic. It’s just bloody strange. The whole thing is bloody strange.”
“Australia Post is a self-funding, Commonwealth-owned entity that is expected to make a commercial rate of return. We abide by all legal taxation and regulatory obligations.”
The new service lets shoppers take advantage of “free shipping to anywhere within the US” policy offered by leading sellers of consumer electronics goods.
A recent SmartHouse service recently revealed several core products being sold Harvey Norman stores were significantly cheaper at US CE stores.
Today a Beats Pill wireless speaker is selling at Amazon for $192, the same speaker at Harvey Norman is $268. Shipping via the new Australia Post service is $18.
Australia Post said it was just responding to the changing needs of its customers.
“One of our jobs is to help Australians who do want to shop around the world to get access to these goods. But some sellers in the United States, and other countries, don’t have the ability or infrastructure to get their product to Australia,” said Australia Post managing director Ahmed Fahour.
“Our job, in a commercial way, is to help Australians connect with the rest of the world and create a facility that enables them to access products and services they can’t get without our help. ShopMate is designed to give Australians the ability to do that.
“It is completely wrong to say this is about the avoidance of GST. It’s about the inability of some overseas retailers to deliver what Australian shoppers want to buy or access,” said Mr Fahour.
The key economic argument against removing the exemption is the prohib?itive cost required to police it, with tax revenue gained likely to be outstripped by the required investment in border screening.
Consumer group CHOICE has welcomed the service as a boon for ?consumers. Spokesman Tom Godfrey said ShopMate could only increase choice and competition in the retail sector. “It’s a strange environment where we’re forced to go to these lengths, to set up parcel forwarding services in foreign countries just so we can get a decent deal,” spokesman Tom Godfrey said.
“The Australian retail industry has been charging too much for too long and letting Australian ?consumers down.”
Mr Harvey said that he didn’t expect anything to come of his criticism.
“I’ve been yelling and screaming about it, and I’ve been told to shut up because no one listens, you can change a government and nothing happens.”
He said Harvey Norman didn’t compete directly with online retailers, and therefore the GST exemption didn’t really hurt his business.
“This doesn’t affect Harvey Norman very much. All the things they’re buying overseas we don’t sell.”