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Gerry Harvey wins, but still complains! Major loss of competition

gst
competition
amazon
consumerrights
shopping

#1

Gerry Harvey has won his big battle and GST will be applied on all imports from 1 July 2018 - with international retailers expected to collect tax on behalf of our government.

Amazon.com will stop shipping to Australia from 1 July 2018, as it does not want to have to collect tax on behalf of Australia (and every other country on Earth that might pass similar legislation).

And Gerry is still whining that Amazon should have been paying GST for the last ten years yada yada. This change doesn’t affect the ‘Australia tax’ that all of us have to pay when we go to an Australian retailer to buy something that’s half the price overseas! It does nothing to improve competition, and moves the country back a couple of decades.

I saw a computer monitor previewed online a few days ago. In the US, it will cost US$1,999 (AU$2,638). The cheapest Australian listing for this monitor was AU$3,400! Oh - better account for the GST… a straight conversion would make it $2,638 + 10% GST, or $2,902. The rest is profit for someone - today’s electronics need nothing more than a change of plug when they are sold in different countries!

And so Gerry has managed in his bid to shut down personal imports and keep his own prices stratospheric. I’ll have to use my US address in future, with its extra handling costs, in order to buy from Amazon - and in many cases that will still be cheaper than Hardly Normal!

This legislation should have required payment of GST by the import recipient - but Australia’s retailers figured that would still make imports too competitive, so they managed to get the government to place the burden on companies that have a tiny proportion of their sales in Australia. Of course Amazon doesn’t want this extra paperwork for a tiny market like ours, and we will have to put up with the local shadow of global retailers now Gerry and his cabal have had their way.


#2

I only go to Harvey Strumpet when I want to look at models - then I go somewhere else to buy. That way, being ignored by the staff just because I am an older, single, female, doesn’t matter.


#3

You’ve articulated the frustration that many Aussie online shoppers are feeling very well @postulative. I wonder if other large online sites will follow suit…

@mudpuppy It’s no good that you were ignored. I hope this was a one off and you found some better service (and deals) elsewhere!


#4

Agree, then it would have freed up all trade and removed the Aussie buying filter.

The downside is that administering such approach would be a nightmare. I expect for this to work the parcels would need to be delivered to a central location and not released until GST paid. Postage and courier costs would go up substantially as it would mean every parcel is double handled, reprocessed and stored until payment. Assessing whether GST was payable would also be challenging (as there are exemptions to payment of GST such as second hand goods, most foods etc). It would be a recipe for a major administrative disaster.

I agree in principle about GST being paid on all goods as this is something we have accepted as a nation (with purchases internally). But I also expect that when the GST was introduced, GST on overseas purchases brought in by person (e.g. in airline luggage) was consider. Back in 2000, internet shopping was still a dream or in its infancy.


#5

You have assumed at the stroke of a pen that taxing the recipient has insignificant overheads. Unless there are some figures on the administrative cost of such a policy to show this is the case it is not at all clear there is a retailer/government conspiracy choosing a different option for less acceptable reasons.

Numbers seem to have gone missing in this debate. Some years ago the government of the day said it wouldn’t be extending GST to all imports because the administrative cost of collection wasn’t worth it for items under $1000. What was the collection model then and what did it cost? I don’t know.

The present government doesn’t seem to think the cost of their system is excessive. Is this only because the new policy is different in passing the responsibility and the cost to the vendor (and ultimately the buyer) or has the costing changed for other reasons, or is there no justification at all? Does anybody have any numbers?


#6

Generally on importation there has to be a declaration of value of the goods on the Customs form. In this regard Customs would just need to issue a notice of GST owed before item release as they do now for any other Customs duties owed. Problem solved, but it will cost Customs huge amounts to raise the amount owed which is why the original $1,000 limit was imposed. Yep I will pay my $0.20 owed on my $2.00 purchase from China, guessing it will cost about $10.00 to raise and collect the amount but that’s the stupidity of this rule now.


#7
  1. Such administrative processes are already in place for more expensive imports.
  2. Instead of this, we have gone with the equivalent of asking Australian companies to meet the tax requirements of Luxembourg! This law is an ass.

Over our already ridiculous costs? As I have mentioned in another thread, I can get an item shipped from China more cheaply than from Brisbane!

Not at all - I am simply pointing out the stupidity, and the prevention of ‘free trade’, that this law represents. As you mention, the ATO has already said that this will cost more to administer than it will earn in additional taxes - it’s a dumb thing to do from any perspective but that of a large Australian retailer who is feeling the effects of competition.

If we assume that Australia should go with ahead with this costly idea on behalf of its lazy and uncompetitive retailers, then there are ways of doing it. Parcels I have received from outside Australia are already labelled by value. The tax could be collected at the point of delivery, or could be a self-declaration as with some other taxes.

Not to itself, no - the cost to taxpayers is less of a focus for the current mob. The Liberal/National parties are presumably expecting large increases in donations from certain sectors, and it would be interesting to see what those donations have been like historically and into the future.


#8

Apart from having heard it is happening, I haven’t heard anything about the mechanics of the process of collection. I wonder if the LNP looked before they leapt to Gerry Harvey’s bidding?

I don’t think Chinese suppliers will bother to collect the GST. They already have statements on many retail sites to the effect that ‘VAT & Customs Duties are the responsibility of the buyer’.

How are the Customs people going to check whether GST has been paid I wonder? The posties are not going to want to become tax collectors. They are already subject to constant cutbacks by AP, and aren’t going to be able to absorb the extra workload of collecting money. And, how would they collect money from people who aren’t home? The POs aren’t going to want the burden. What about the people who don’t live in the capital cities, what will they do?

I can see this collapsing in a heap. It certainly won’t improve Gerry Harvey’s or the Government’s income, because firstly, even with and extra 10% it is cheaper to buy from overseas. Secondly, all that will happen is that people will find a way of circumventing the system, as they did with copying music and videos.

And the Government aren’t going to be able to threaten the Chinese if they don’t cooperate are they?

In the immortal words from Forrest Gump: “Stupid is as stupid does.” And boy this takes the cake for stupid!


#9

I’m not sure what can be said - the current government seems to be on their game so well they make the case of ‘Yes Minister’ look like amateurs.

As for Gerald - what a spoiled little brat. Possibly time for him to grow up? tantrums aren’t becoming of him …


#10

We were looking at models and the inarticulate teenage salesman started yelling at our backs from across the store. This was his (trained by Harrvey?) way of asking us if we wanted assistance. We then ordered online - from another company, of course.


#11

Apparently Ebay will continue with the GST… we will just have to wait and see.


#12

Gerry Harvey is nothing more than a Philistine . Why should the Australian consumer have to put up with the greed of the likes of Harvey , so they can pursue their luxurious lifestyles and pursuits. Be competitive Harvey and the consumer might even consider visiting your outlets. The best thing Harvey ever did was LOWERING the volume on his ANNOYING ,INFURIATING ADDS>


#13

Some have pointed out that the technology is in place at ANY US based online merchant to collect tax, whatever that tax is called. It is sales tax in the US.

The algorithm is pretty straight forward.

  • They are registered for collecting sales tax in every US state they have a bricks and mortar presence.
    — no presence, no state registrations and no sales taxes need be collected online
    -They have a database of all US jurisdictional sales taxes…
    -They apply the respective sales tax rate based on the delivery address
    -They file sales tax reports to the respective governments.

There could be multiple governments joining the sales tax grab, but they deal with it.

So, at the end of the day while I am not one of Gerry or Scotty’s fans they have a point that it should not be a big problem. However amazon (et al) is not ‘a’ single business re all transactions, it is a marketplace of many businesses including amazon itself, many that would not be bothered with our political problems re GST collection, so amazon ‘signing up’ could be detrimental to its overall business. Hence a problem rears its head - amazon losing merchants if all were forced to adopt our GST. Could that be resolved? From an IT perspective it should not be too hard considering what is already in place.

Some people seem to miss that there are already unique national sites for amazon, ebay, etc, for various reasons, legalities often being among them.

Also, has been posted, we consumers are usually irrelevant collateral damage in the world of our pollies regardless of topic, while their donors count.

Edit: What I perceive is the real problem is a slippery slope to also pay Australian corporate taxes… eg how does amazon and our illustrious government deal with amazon.com vs amazon.com.au when goods are shipped into Australia?


#14

This is correct, but irrelevant. Imagine a world in which any business operating internationally is asked to collect tax on behalf of every government on Earth - be they national, state or local - into which they ship goods or provide services. Not only collect tax, but then remit it with the appropriate paperwork (in the relevant language).

I would imagine Amazon has thought long and hard about this, and realised that if countries start asking it to be a tax collector then costs of business would soar - regardless of possible automation. Having used some fairly complex enterprise management software, basic maintenance costs are high. Add in the cost of setting up local tax requirements, and it gets very expensive. The cost of setting up and maintaining global taxation collection would be a nightmare!

The responsibility for collection here has been deliberately placed so as to protect Australian businesses from competition.


#15

Not exactly irrelevant since they already do it for individual states in the USA…Not much difference between a state and a country at the end of day, no matter how hard one wants to believe that is the case. But the slope to corporate income taxes get nasty very quickly.


#16

Gerry Harvey is a hypocrite! Where was HIS empathy when his huge megastores forced the closure of many small independent family run appliance, flooring, bedding and computer stores. I hope he goes bankrupt himself.


#17

Are you suggesting those little stores who couldn’t keep up should be subsidised by customers paying more or that the board of HN should break the law and not run the company in a way that maximises their shareholder’s profits?

There is nothing hypocritical about GH lobbying for his industry and his own firm, he is doing just what he says he does - making a profit.

While I agree that we ought to live in a society not an economy it is hard to fault any given company for being a success.


#18

QFT*.

I saw the other day that Mr Harvey is valued at $1.9 billion dollars. What can you possibly do with that, whether as one person or a family? Will we one day have the Gerry Harvey Memorial Hospital, or some similarly grotesque monument to greed?

*Quoted for truth.


#19

So far you and pjturner seem to agree you don’t like Gerry much but the only apparent reason is that he is rich. He made his stash selling household goods not blood diamonds or biological weapons. Why is making a fortune wrong?


#20

You’re tempting the communist in me…

I have a problem with the way ‘democracy’ works and the way ‘political donations’ work. My problem is not all with Gerry Harvey (although he worked hard to get rid of competition in this instance and that annoys me), but with the direction of the modern world.

Turning the question on its head, let me ask this: how is it fair that one individual can earn 100 times what another does? Did Gerry Harvey or anyone else actually do the work related to their billions, or are they relying upon wage slaves? What are the working conditions for Gerry’s minions, as opposed to for himself?

Now you may say that Gerry worked very hard to get where he is, and I acknowledge that… but 100 times as hard as Joe Average? We seem to have developed this distorted view of capitalism and its place in society whereby we laud people who get rich of the work of others while our politicians write laws to suit the rich and hurt the poor. The ordinary individual is debased, and Mark Zuckerberg is considered the font of all wisdom for having screwed his friends out of the business!

Greed is not good, but the message our children are hearing is that it’s all they should be living for. I find it absolutely crazy that Christians in the US are being taught the ‘prosperity gospel’ in which god wants us all to be rich! It’s a mad, mad, mad, mad world - in which “virtue is triumphant only in theatrical performances” (with thanks to Mr Gilbert).

Although for all that I might desire the world to be we can’t live in a society, because Margaret Thatcher says there is no such thing!