Online retails – what’s all the fuss about?

Australia’s largest retailers have joined forces in calling for the end to the tax free status of online purchases under $1000 from foreign websites. Webmaster Drew explains the situation and the backlash from the general public.

In recent weeks several large Australian retailers placed full-page advertisements in some of the nation’s newspapers, calling for the government to either scrap the GST for locally sold goods priced at less than $1000 or apply the same tax to goods bought from foreign websites.

Why are the large retailers making a push?

Australians are largely becoming aware of the huge mark-ups being placed on products being sold in stores and have made the move to looking online for a bargain. The large retailers are feeling the pinch caused by this move away from retail shopping to online shopping and want to try and stop what they see as an unfair advantage to online, overseas retailers.

Will it work?

The major problem retailer’s face is that online shops have little overhead expenses apart from maintaining, operating and advertising their website. Large retailers such as Harvey Norman employ thousands of staff Australia-wide and have to pay for premises to operate out of and sell their products. As explained in YOURLifeChoices’ price comparison article, implementing the GST onto purchases from for example, will have very little effect to the overall savings made online, with three books purchased from Amazon saving the customer $37.88 compared to the same purchase from a high-street retailer. Further more, almost 30% of the price was for delivery, which would not be subject to GST. The customer would still be saving around $32 by shopping online.

Public Backlash

While the public cannot afford to buy full-page advertisements to fight back, there has been a revolt on the social networking site, Twitter, with thousands upon thousands of angry Australians venting their rage. Further more, thousands of comments on news sites echoed the same message loud and clear, we will fight back.

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