David Jones Ltd, Harvey Norman Holdings Ltd,( Gerry Harvey ) Myer and Target are among companies joining forces under a new retail coalition calling on the federal government to either impose GST on all goods under $1000 bought online, or remove GST from all products under $1000 bought locally.
More recently ,Wesfarmers( also running the coles group) has thrown its weight behind this controversial campaign to scrap tax rules that allow Australians to shop on overseas websites without paying GST. Perth-based conglomerate Wesfarmers, also controls retail chains including the Bunnings hardware group, Coles and Bi-Lo supermarkets, Officeworks and Kmart.
According to watoday.com.au
Online retailer Michael Fox, who sells custom shoes through website shoesofprey.com, said big retailers should concentrate on improving their websites rather than blaming the GST exemption for slumping sales.
”For the last five or 10 years the big retailers, and Gerry Harvey in particular, have been saying that online retail is a dead end, nobody makes money in online retail, and they’re not going to invest in it,” Mr Fox said.
The Australian online retail market is set to reach AU$36.8 billion by 2013, up from a forecasted figure of AU$26.86 billion for calendar year 2010 according to PayPal’s ‘eCommerce: Secure Insight’ report from Forrester Research and The Leading Edge
Considering that many of these big businesses are themselves in the process of upgrading their online business websites enabling to sell more of their goods online , this would certainly appear to the online business retailing community as a way to stifle the smaller competition by the big businesses. The consequences of this big businesses pushing on for this gst removal can lead to small local online businesses that could probably close down and run out of business and jobs.
‘There is still a couple of very big retailers that are not joined this group which include Harvey Norman competitor JB Hi-Fi, which has a strong online presence, Woolworths’ discount chain, Big W, and the Supre and Sussan groups, which compete with Lew family interests.
This group of companies is running a media campaign which is targeted against small online retailers and businesses ,which warns that failing to act will ultimately cost Australians jobs. This coalition of big businesses also includes Book shops and australian designer fashion stores labels . This has possibly happened because now people who shop online have been able to get books and dresses cheaper not only from local online shops but also overseas due to the strong aussie dollar.
Consumers have embraced online shopping even more due to the ridiculously high prices they have to pay at the Big retail shops compared to shopping in other countries or even online shopping. Prices in big retail shops and grocery shops have continued to be on the rise in spite of the population rising significantly over the years which has not brought any reduction in these prices therefore leading the consumers towards savings and online shopping.
These group of companies are just trying to deny normal people shopping online good bargains that they can have online and instead of trying to compete with them they are trying to make it harder for them to trade online.
Mr Lew, who has an estimated worth of $1.49 billion, yesterday emerged as the main backer of the push to either scrap GST on goods worth less than $1000 sold by Australia’s struggling retail sector or apply the same impost to goods bought from overseas
According to the Australian Bureau Of statistics more than 1.3 million Australian adults purchased or ordered goods and services for their own private use over the Internet. This was a substantial increase from the 803,000 adults that did likewise in the 12 month period to November 1999.