In speaking with business people throughout my travels in recent months, I am becoming increasingly alarmed at tales of a familiar practice permeating many retail outlets.
That is, the practice of consumers conducting ‘reconnaissance missions’ on items before making a purchase. Whether it be for a pair of sporting shoes or a bra, it seems consumers aren’t afraid to admit that they are just ‘trying on’ an item so that they can make a purchase on line.
Trying something on alright - the tolerance and good faith of hard working business owners. I understand that we lead busy lives and are often time poor and that the assumed benefits of purchasing on-line do appear attractive to busy Australians.
However, if you are guilty of this practice, do you realise that you may be contributing to businesses having to retrench staff or worse still shut their doors? Then where will you go to ‘fit’ your shoe or underwear?
Retailers are telling me that overseas businesses have an unfair price advantage because they don’t have to collect GST on purchases under A$1000. Australian Retailers Association chief executive Russell Zimmerman is quoted as saying about ‘6 per cent of Australia’s A$253 billion retail sales are online’.
An Australian Government inquiry into GST distribution recommended the threshold be lowered to A$500 “as soon as practicable” to prevent further erosion of the GST funds collected. An Ernst & Young report calculates the loss of GST revenues at A$2.49 billion over the three years from 2012-13 to 2014-15. Apparently the issues is with the cost associated with the collection and compliance. Surely with current technology this is a cop out?
I understand that Australia’s A$1000 threshold is way above other nations such as New Zealand and Singapore where it’s equivalent to A$300 and in Canada it’s A$20 and in Britain it’s A$30.
In recent developments in the US, Australian retailers selling their products online into America will now face significant challenges as a result of a recent US Senate decision to charge tax on online purchases. This move by the US Senate is to protect shop front retailers from losing more sales.
Should the Australian Government move to protect our retailers and in doing so increase our GST base to share amongst our States and Territories?
What is your experience? Are you a small business owner? Are you a consumer?
Care to share your thoughts?