Aussie Retailers Rail Against Online Shopping

In a move that could end up affecting video game prices, Aussie retailers are demanding that the government impose GST on all goods bought over the internet, or remove the GST in Australia to level the playing field for brick and mortar retailers.

The continuing strength of the Aussie dollar compared to its US equivalent has driven many consumers online to import, resulting in one of the worst Christmas hauls in recent memory for Australian retailers. Now a retail coalition made up of 2211 stores nationwide - including Myer, Harvey Norman and David Jones - is asking the government to do something about it.

Currently GST is not charged to imported goods under $1000, whilst all goods bought in Australia are subject to the tax, which drives up prices locally. Retailers have argued that this is unfair, giving overseas online stores a head up - and have even asked the government to consider removing the GST on locally sold products at the same price.

Myer Chief Executive Bernie Brookes claimed the current system is unfair.

"We just want the same rules that we have to live with — collecting GST and duty — to be applied whether you reside in China or Australia," he claimed.

Despite high video game pricing in Australia, we sympathise to an extent. It does seem unfair that retailers are subject to a tax that consumers can negate by shopping overseas. The solution, however, seems less clear. Removing the GST on all products under $1000 is pie in the sky stuff, but adding GST to products bought overseas would be a logistical, and costly, nightmare.

Any ideas folks? Or should things remain as they are.

Online sales will kill jobs: retailers [The Australian]


Comments

    The thing here is EB's 120 dollar copy of something compared to americas 60 even with 10% on top is still only 66 and then even adding shipping to it makes it even cheaper.

    i mean i can order game cheaper from EB's US online store than i can the australian store.

    so for games they should be looking at what makes the price so different instead of trying to make it so they get to keep ripping us off.

    If the consumer is able to consistently source all your products from the internet at a much cheaper price it means the way your going about your business is wrong. They should be arguing with the publishers instead of continuing to rort the customers

    (especially since this law wont change much in the area of games, Dvd's have a closer price parity if you were to actually buy them in a US store though they can be found cheaper)

    im pretty sure there issue is that the games are cheaper than there used versions

      Well said, how is it that shipping something per person is cheaper for us than a company shipping in bulk? Perfectly said, they should look into that, not complain to the government

    This would be completely impractical.

    Let's say they do it - the maximum GST they'll collect per item is $100. And in reality I doubt most people actually spend $1,000 per order when shopping online overseas.

    But let's say everybody does spend $1,000, allowing the govt to collect $100 GST. How are they going to collect it? They'll have to open each and every parcel coming in from overseas, check the value of the contents then send a tax bill to the purchaser. They then need to chase up the people who don't pay in time, of which there would probably be plenty. The cost of doing that would soak up most if not all of that $100 revenue, meaning it wasn't worth doing in the first place. And the equation gets worse as you get down to lower value items which would reap less revenue.

    It'd be even more expensive if they actually impounded parcels until people paid the tax, because the overhead for storing and processing them would be enormous.

    This is a stupid idea put forward by stupid people.

    Adding GST to online purchases won't change a single thing for me. It's already been said, but I'll say it again. If the stores prices were a bit more competitive then maybe it'd be worth buying locally. That has nothing to do with GST. The markups here are ridiculous!

    And what about if you're buying some hand crafted doll or something from a little old English lady that you can't get in Australia anyway? Is she still expected to collect the GST? What they want is flawed, too costly and downright ridiculous.

    When the local bricks & mortar stores actually start selling the weird crap I buy online, I might consider their arguments. If they don't make the effort to stock the items, complaining that I buy elsewhere is absurd.

    well when stores charge $100AUD vs. $4USD on steam for left 4 dead 2 its kinda hard to say no and you cant tell me that the box + GST cost 96 dollars

    How about this, brick and mortar stop ripping us off???

    Ad tax to a US$60 game. I can tell u that it doesnt end up in the $100-120 AU dollar range. Its stupid. Pass on savings or prepare to get burned.

    *shrug*

    They're not just whinging about games, suddenly everything is unfair now that our dollar is up and it's more feasible to buy from a global market.

    They seem ignorant of the fact that if they weren't so eager to overprice in general (about a month ago I bought a $1200 AUD camera from the US for $650 with full warranty) they really wouldn't have a problem - I don't like GST (more for how it came about), but that's not the issue.

    More than anything, I think this is a clever marketing campaign and the beginning of a struggle to maintain the status quo.

      the irony is its been viable to buy from the US for years for most thing's

      when the dollar was 80cents. it was still alot cheaper to import stuff

    I got about 10 brand new games off steam over the Christmas holidays and paid no more than $70. I bet that even if I waited a few years for them all to show up in EB's "bargain" bin, they'd cost me $200+ all up.

    Retailers bitching and moaning really pisses me off! If you're not competitive, then maybe you should look at how you can make yourself MORE competitive rather than trying to make your competition weaker.

    And even with %10 GST: HA! Games prices in AU are still the same as when our dollar was worth half what it is now. Cut those prices in half and I might be tempted to buy in stores again!

    Somewhere between Government enforced taxes, wholesale greed and retail greed, where games and their peripherals are concerned, something needs to change.
    It's not just GST, there are a whole lot of other extra costs added to this hobby of ours that seem unfair, illogical or fueled by greed.

    You would think with our geographical and commercial closeness to Asia we'd have the lower costs on goods manufactured in those areas, but we don't at all.

    I'm not going to stop buying games from overseas, as it costs me far less, the customer service and delivery times are brilliant and it's just plain easy.

    If I want a game on release day, I but local, but otherwise I'm going UK side.
    Plus the money I'm spending is going to countries that treat the gamers within their borders with respect and have ratings for adults and their gaming hobby.

    Australia needs to grow up, catch up and drag it's sorry arse out from the '50s.
    In relation to gaming particularly, but other factors in Aus are still backward.

    End of rant.

      i believe it has something to do with america getting extra money my exporting out of america so they tend to route everything through there (though im not sure it applys with games since ours are the european copies )

    Might be a better idea for the Government to endorse local Game Developers and Producers to avoid high costs of imports and set up an export route for video games from Australia.

    I wonder if any of the large retailers or producers in Australia have considerred an online game hub like Direct 2 Drive and Steam. Couple that with a known trade mark like JB or EB and it may just be worth a trial. If you can't beat em, join em.

    Dear Australian Retailers: COMPETITION. YOU HAS IT.

    simple solution for retailers. get a better deal from the distributors so its not cheaper for me to order online and have it delivered to me. lower the prices so its not worth waiting 2 weeks.

    more people would buy more games, at less than $60.

    Australian dlc prices are ridiculous too, it's insulting.

    Fuck the retailers... I once got an item off of ebay for $25 plus postage, where online from aussie retailer the same item was $75 plus another $12 postage. And this is why people are going online to buy products these days.

    Um.... how about the fact that imposing GST on all incoming goods would cost more to implement than the revenue generated by either the tax or increased sales.

    Not to mention it would bring our postal system to a complete standstill. What effect would that have on Australians at large?

      no thats not how it's done

      instead they would have to set up an overseas agency that collects tax from the company's when they register a sale to australia

      becuase otherwise, when i import something what price do we base the GST i would apparently be paying to pick it up in australia, The RRP , the price i bought it for online, the lowest price i can prove i could buy it for in australia, the price that my american friend who i shipped it to originally said he sold it( gifted it to me for) theres a reason that it's not applied as it is

    What's unfair about it? I imported FF13 from the UK for $30 inc delivery, and jsut the other week saw the same product in Harvey Normans for $109. Now that isn't a GST price difference!!

    If I'm not mistaken, wasn't this all started when Gerry Harvey got upset about Ruslan Kogan? Games will only be a tiny part of affected sales.
    http://www.itwire.com/your-it-news/home-it/43710-kogan-goes-rogue-an-on-harvey-the-bogan

    It's already been stated but I'm going to say it again anyway - I highly doubt putting a tax on online goods will change anything. It's still much cheaper to buy the majority of goods online than it is here given a 1:1 exchange rate. A certain camera here is 700 bucks - add GST and still almost half the price of buying it here in Oz (ignoring other import costs which still comes in well under the Australian price).

    Many goods that were bought online I'd wager were cheaper ones where a 10% tax would barely dent the price. Retailers need to work out a better business model. Many retailers use the import costs as a defence but many mark ups go beyond compensating for those import costs - they can start by reducing those ridiculous mark ups.

    The way I see it the choice of buying from overseas versus buying locally is the same as buying from JBHifi versus buying from EBGames because it's cheaper. People are going to make the choice that saves them money.

    Adding the GST to imports will still make the imports cheaper than buying locally, it's only a 10% increase so the only thing it would achieve is giving the government more money.

    I really hope something such as this does not happen. Not only will it ruin the great aspects of purchasing online (e.g. Steam - Mostly cheaper prices, easy to access) and replace it with more silly fees to fund government employee junkets.

    We could also examine the prices of the main stores such as Myer and Harvey Norman. Why the hell would I pay over $100 for a game that I could get on Steam from anywhere between $40 - $80.

    Seriously retailers, look at your own prices and try to generate some competition, stop being lazy and work for your customers.

    - Loony

    Gee its almost if the current retail structure of heavy reliance on sales with collosal mark ups above and beyond what shipping, taxation and the like would impose on margins is amazingly stupid and exploitative to customers across everything.

    Its almost as if they would have to possibly lower prices to attract business??????

    What a world to live in.

    The GST changes already mentioned won't solve the problem. It will only cause a logistical nightmare that costs more than the tax change will bring into the government coffers. The reason you haven't seen much movement by the govt on the issue.

    Pretty much everything you buy in a shop these days is imported from overseas. So where do retailers get their products? They don't magically appear under the counter - they are imported as well. That means with the higher Australian dollar means the cost of importing these goods has also decreased for them. The problem is retailers can't drop their prices much because of high rents paid to shopping centres and the high cost of labour in Australia. Therefore they can't compete with overseas based companies selling the same goods online where rents are cheaper and the avg wage rates are much lower. I think this whole mess is the retailers not wanting to restructure their businesses and continue on like they always have.

    The retailers are the middle men in this case and online shopping is cutting them out of the picture. They need to accept they have to compete in a global marketplace, not just the competition in the same shopping centre.

    Balls....I just wanted to contribute....in an obscure way....

    wat a load of crap. EB is so overpriced and yet, they want to chuck a tax on online shopping, if anything, remove eb all together or atleast delete their tax on games.

    they add an extra $50 on games and $100-$200 on consoles.

    dont think its fair for us australians when our currency is equivalent to the US while in america, they get theirs for half our price.

    The retailers could always try to import the same cheaper versions that people here buy. Usually EUR versions from Europe or China if they're manufactured there?

    Example with Tomb Raider Underworld on Xbox 360. The version sold in stores directly came from Europe, it didn't have the Australian rating classification printed on the cover/disk. Only an M rating sticker was put on the case over the top of the Eur rating. A cheaper version of the game the wholesaler sourced & yet they supplied to retailers here at the same price as other local region games..

    I did talk to a GameTraders manager once about this topic ages ago, I think he said there was something stopping them from doing that themselves often. Maybe to do with the classification of games with some games being altered to comply for Australia & hence they couldn't sell the overseas versions in store.

    Maybe retailers should rail against used-copy selling. If they did that I might actually shop at their stores. Maybe they should rail against the ridiculous price gouging of consumers that's overly-abundant. But for as long as they're saying f**k developers, publishers AND consumers, I'm saying f**k them. -out

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