Time for my first rant of the year!
In the news recently, and highlighted today, are some of Australia's biggest retailers campaigning against the tax-free threshold for buying and importing goods online from overseas.
For the unaware: in Australia people can buy something from overseas and import it into the country, and providing the value of what you are importing is less than AUD$1000, you don't have to pay any GST (Goods and Services Tax) on the goods.
The big retailers argue that it is killing their businesses, and want a level playing field by either the Government taxing imports worth less than $1000, or the retailers not having to charge GST on items they sell for less than $1000.
I find this all a bit hard to take, because their main war is against online shopping. What they fail to admit is that people are increasingly turning to shopping online because more-and-more of the general public are becoming aware of how much margin the big retailers make, and consequently how much an individual consumer can save by shopping around online.
I've previously blogged a lot about using 'parallel importing' to save money, especially on things like video games and books. I don't know about most people, but for nearly all the stuff I buy on the internet I am saving a whole lot more than the 10% difference in tax compared to the 'in store' price, and that always includes the shipping/postage costs. Even if they were to tax me GST on my imports, in nearly all cases it still would be significantly cheaper to import it anyway. It would be just less convenient having to pay the tax to get the shipment released.
I doubt the Government will go for either option that the retailers are wanting (and i hope they won't either). The main reason for the $1000 dollar exemption is that it just isn't worth the Government's time or money to collect tax on imports of such a small value: by the time they end up getting the money off you by holding and releasing shipments, you would have wasted more than what they would collect by the costs spent in staff time, storage, and accounting. And the government sure as heck isn't going to waive the GST for Australian-based stores for purchases of any amount.
What the retailers need to focus on is staying competitive in an online world, instead of complaining to the Government on how 'unfair' the tax situation is. The margins stores like Harvey Norman etc make in RRP on most goods is horrendous. The fact that we can buy the exact same product from an online store for literally less than half their RRP (including postage!) means that either they, or their distributors/wholesalers are making that difference in profit.
They need to sharpen their pencils and stop ripping us off, or chase their distributors/wholesalers for ripping them off. Either way it doesn't matter to me as a consumer, because i won't fork out my hard-earned money to toss into somebody else's profit pile if I don't have to.
Especially with the Aussie dollar being worth more than the US$ these days, we still haven't seen prices come down to the appropriate levels (but they always seem to go up when the currency does worse, funny that!), so they can't blame people for shopping online.
I also should note that shopping 'online' doesn't necessarily mean from overseas; a fair bit of my own online shopping is from Australian online stores (and shock, i pay the GST for those purchases!). You've only got to look at the retail chains behind this push to see their agenda: protecting their own businesses, market share, and most important of all: their grossly inflated profit margins.
Shop around. After all, it's your money.