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

    Well these suits at the top giving themselves a million dollar bonus for the remarkable vision to fire staff when they make not as much money, you guys are getting paid millions, how about actually come up with something new? This is the new market, like digital cameras vs the old film style, newspapers vs online, even if the government did add or lower taxes, this is the new way of doing things, ergo fat cats earn your millions and actually think of something new.

    I buy online sometimes if a game is like 120, I'm looking at you EB that still has black opps at 120 dollars for some reason when everyone has it at 79, but if its around 78 then I will buy simply to avoid the shipping time so there is middle ground. Plus if games keep taking hits in sales because of importing that will be another reason for the r rating to be placed in, it's a reason I import. importing is cheaper and uncensored so aside from wanting the game on release day, give me a reason why I wouldn't. Seriously it's got to a point where cost cutting (less staff) is the only response by the big retail chains.

    Plus I ebay all the time because I can get the most rare stuff that isn't in australia at the shops. And Jerry harvey is a billionare from taking advantage of his staff, overpricing people and being an allround scumbag, I feel sorry for his staff but suck it Jerry. Guys who took advantage of people for years are now crying foul because people have an option not to get screwed by you. Meet half way, lower prices if the government adds or takes away taxes, not just cry until you make your billions in equal messure.

    Getting the government to implement GST on goods purchased from overseas websites like Amazon, eBay etc would end up costing more to implement as opposed to the benefits that this would bring in!

    Pure lunacy, Gerry Harvey, get with the times, play fair with your prices and MAYBE we might buy something from your stores once in a while...

    I can't say I have too much sympathy when this gripe is coming from stores that normally charge higher prices for EVERYTHING! If other aussie retailers can undercut these guys and still make a profit then they gotta have a closer look at the way they do business.

    "including Myer, Harvey Norman and David Jones"

    Who the hell buys games at these stores anyway? They always charge AT LEAST the RRP and aren't exactly known for their gaming sales. Hell, I didn't even know David Jones had video games...

      "Who the hell buys games at these stores anyway?"
      +1,000!

    Doesn't it make one's heart bleed to hear these retailers crying poor! Where are the figures that tell us just how much is being purchased overseas online in relation to what is being purchased within Australia, same products of course ??
    Is this the same Gerry Harvey who rubbished the Government stimulus package but willingly accepted all the cash he could when the people came to buy? You can't have it both ways and just as an aside how much has Harvey Norman donated to the QLD flood appeal ???

    Screw the retailers I think that this is the perfect time for consumers to stand up and demand yes demand cheaper prices.
    I get books from the UK and USA for less then half what they sell for here on the shelf.
    I get games from steam for my PC.
    I get music from all over the place - both digital and physical.
    I get figures and geek stuff from Japan and USA.
    I have yet to buy console games from OS but it is only a matter of time.
    And why do I do this?
    PRICE... not to mention ease of service - search select buy wait delivered... with little to no problems thus far - even from non English speaking countries.
    Why are we hit with this wholesellers TAX (sorry should I call that profit making?) just because someone somewhere has declared Australia as a separate marketplace. I say there is not separate mark places the world in my marketplace and I will shop in it - to find the best price/item and service.
    Here endith the rant!

    This is not about online retail. The issue is this:

    You want to buy the new fallout game.

    You can buy it from America (or whatever) without paying 10% in GST + duty.

    IF you buy it in Australia, it does have a 10% GST.

    I.e. you get the same game, but it will ALWAYS be 10% cheaper to import due to this tax exemption. There is nothing the store can do about it.

    This is all due to the law allowing an exemption for X<$1,000 of imports (in 1999 when the law was drafted it wasn't really an issue as the volume was signifcantly lower then it is now and compliance was an issue, i.e. how to collect GST on such low value amounts).

    Therefore, due to this special rule, which these days could be administered a lot more easily, people selling games in Australia are at a 10% disadvantage.

    Solution? Do what New Zealand do. Tax all imports with no/a notional low value exemption threshold.

    GST is the only fair tax we have as it taxes consumption not wealth, however exemptions such as this one damage Australian retailers and jobs, nor do they make sense when you look at the policy intent of the GST (to tax all consumption within Australia).

      It's more like 50% off than 10% off including shipping.

      When I can have an RC car shipped here from China (not a knockoff a legit one) for $150 and it's $400 in stores. I'm more than happy to pay an extra 10%.

      But how about a real world example.

      The Witcher 2 is $148 at EB (http://www.ebgames.com.au/pc-152614-The-Witcher-2-Assassins-of-Kings-Collectors-Edition-PC)

      And $45 on Steam (10% off pre-order bonus)
      (http://store.steampowered.com/app/20920/)

      Now while I admit that is the collectors pack with a head bust, a coin, some dice, stickers, a book so you don't have to play the game etc. Look at what your getting on Steam, all the DLC the sound track, the movies, even the how to play the game book (digital version) for 1/3rd the price. Heck when it comes out the normal version will be $110-ish and Steam will be $50. And no I would not pay an extra $100 for some dice (and I'm a massive D&D nerd) and a headbust. It's just too much more.

      Of course those damn Steam sales had me buy a ton of games to eventually get round to playing like NWN2 for $10. And to whoever said Half the games where not available to us, I counted like 4 but they came up more than once.

    10% on top of the stuff I buy on the internet? Meh, its still incredibly cheaper with the tax compared to retail prices here. Gst will do nothing but net the govt some more cash and make our internet purchases slightly dearer, but still worth it.

    How about just cut GST in brick and mortar stores, instead of hamstringing imports? I know retailers need to make a buck and they obviously have much higher overhead due to rent, staff etc. So at least throw them THIS bone.

    As much as I purchase digitally/online, it would still be a very sad day to see game stores close up shop because they couldn't remain competitive.

    Issues like this make me wish there was more transparency throughout business. Lots of complaining and arguing, but never a proper breakdown of associated costs with arguments backing the need for each.

    But alas, it just turns into another attempt to get the government to pass stupid laws.

    First Sentence from the GST's wikipedia.

    The GST (Goods and Services Tax) is a broad sales tax of 10% on most goods and services transactions in Australia. It is a value added tax, not a sales tax, in that it is refunded to all parties in the chain of production other than the final consumer.

    Any tax will be passed onto the consumer, but if retailers are getting some of it refunded, it's just a publicity campaign.

    A GST will not be imposed on all imports. It's simply too hard to monitor every time someone imports something. And getting rid of the GST on every domestic item sold under $1000 is simply ridiculous. That will be 99% of purchases (if not more). Simply publicity grabbing by the retailers.

    @Bob - GST the only fair tax we have? Don't drink the governments Koolaid man! That's exactly what the high income earners want you to think.

    If I earn $100 a week and buy a $90 game and then pay $9 GST on that (so I pay a total of $99) then I just paid 9% of my income on GST.

    If my neighbour earns $200 a week and buys the same game that $9 GST is only 4.5% of their income.

    GST is more of a burden on low income earners. The cost of something going up by a few bucks mightn't mean much to you, but other people might have less disposable income than yourself.

    Basically what these retailers are asking for is protectionism (check it out on wikipedia - but common belief is that it is only harmful to the economy). The only people who lose out under that system in the local economy is the consumer and eventually the retailers as they never see the need to improve in order to compete on a global scale.

    Don't give me more reason to buy online than I already do.

    I can tell you right now there's much more than a 10% price differential in buying things from overseas.

    People talk about shipping all the time like it's this massive impost, but I'm telling you right now, as someone who's family owns and runs a business with a large importing component, it's not the actual cost of shipping that hurts you- shipping in bulk works out to be only a few extra cents per item- depending on the item- but not the tens of dollars difference in things like video games and the like. Duties and taxes on imports are what hurts you- which is where this argument lies.

    But the difference in price is like 30-40% in the cases of typical items I purchase online. Australian shopfront retail is priced much more highly than other places because of many factors, but not least wages are much higher. A retail shop assistant's wage here is almost double in a countries like US, Canada or Japan.

    However, consumers shouldn't be forced to pay extra- which is ultimately what will happen- because economic conditions, short term increased purchasing power, and a dampening retail sector. Cost of living in Australia is already way above most other comparable countries- and this just seems like a call for an added burden on a competitive market that we'll have to bear.

    The fact that a 10% increase in price when you're getting something for 50% less won't do a thing aside, how is this even workable? The reason that there's a $1000 threshold on imported goods is that the volume of packages which Customs has to process is such that actually doing the work to apply the taxes would end up costing so much more than what they'd make by charging the taxes in the first place. They'd either have to slow down customs processing for all offshore packages significantly, or hire thousands of extra workers. Either that, or they'd have to force foreign businesses to charge the GST to Australian customers, which would have the knock-on effect of destroying our ability to buy online at all, as most retailers would just stop shipping to Australia.

    I just can't see it being feasible.

    Not to mention the root of the problem is local distributors charging enormous amounts. If they want to bitch about something, it should be that. Or perhaps complaining about all the parallel importation laws Australia has which prevents retailers from sourcing from cheaper overseas distributors for a lot of goods. Or maybe asking the government to remove some of the import taxes they're charging which result in higher wholesale prices. Those things would be a win for retailers and consumers both.

    Alright I am a genius and will solve everything:
    All game retailers - buy your games in bulk from ozgameshop, sell games for $5-10 more than ozgameshop, you win, they win, I win. We all win!

    Hooray!

Join the discussion!

Trending Stories Right Now