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E-tail debate gathers punch

Online_retail_follow_upThe debate over introducing taxes for online sales from overseas has gathered momentum following new evidence that international retailers are targeting the Australian dollar.

As reported by the wider media, US department store Sears’ latest campaign has targeted its 20 per cent discount offer at Australians in the lead-up to Christmas, with a graphic including the Australian flag on its website.

The move comes as Australia’s retail industry debates introducing measures to level the playing field, including a GST for online sales from overseas.

David Mendels, managing director of wholesaler International Fashion Group, is urging retailers to lobby for duties on goods purchased online from overseas to be imposed. Retailers should join industry associations such as the Australian Retailers Association as well as contacting their local MP, Mendels said. This comes after Assistant Treasurer Bill Shorten’s recent statement that the Government was not considering imposing the GST on online sales.

“Certainly there is no policy proposition about a GST for online shopping, but what is happening is there is a debate emerging from retailers in Australia who feel that the $1000 threshold [under which GST does not apply] is too high,” Shorten said.

Mendels said the fact that Australian consumers were able to purchase up to A$1000 from overseas, duty and GST free, at a saving of around 20 per cent, was “killing local retail businesses.”

International Fashion Group’s margins on labels including brands such as True Religion and Paige had been directly hit by the issue, he confirmed.

“Ask any retailer that stocks certain overseas brands and they will tell you how bad this is. Customers try on the brands and then go online to shop.”

The knock-on effects of the issue were considerable.

“First you’ll have retailers declining and people losing their jobs in retail, then the wholesalers will be affected, then advertising revenue for the media will go. It’s a snowball effect.”

“It also affects the Australian brands because if consumers spend money overseas they don’t spend money here.”

“The media certainly has helped to kill local retail in recent months, with constant coverage of how to buy cheap consumers goods online from overseas, meaning Australian dollars are lining overseas’ companies’ pockets.”

Prominent retail identities such as Gerry Harvey of Harvey Norman, David Jones and Myer have added their voices to calls for the government to act.

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