"The Productivity Commission's (PC) draft report into the retail industry has acknowledged the $1000 GST threshold for online overseas purchases needs to be lowered, however it's not yet cost-effective to do so.
"The Government's role is not to shield the industry from competition but to remove constraints which restrict the industry in responding to this heightened level of competition," said presiding commissioner Philip Weickhardt in a statement.
"The current exemption from GST and duty for imports valued below $1000 is judged by the Commission to be only a minor contributing factor to online offshore purchases by consumers," the report said.
PMA - 10% to 15% is hardly minor, and why should Aussie retailers be disadvantaged when competing with non tax paying, none employing, non renting overseas retailers? It's simply not fair!
The Fair Imports Alliance spokesperson Brad Kitschke said he was concerned that the PC found the threshold cannot be reduced because of the inefficiency of parcel handling processes and the operations of Customs.
"The recommendation by the PC that there are in principle grounds for the threshold to be lowered is great news for retail. It backs up what we have been saying all along," he said.
"We're not surprised Customs has come under fire for its inefficiency. However, retailers shouldn't be punished because the bureaucracy is inefficient. We need speedy action," he added.
PMA - Bill Shorten is suggesting it may take a couple of years to "get around" to reducing the current $1000 figure. Fantastic! Why does he not seek to find a solution, by having credit card companies collect on behalf of the Govt. a 10% surcharge on all overseas purchases?
"The Australian Retailers Association (ARA) executive director Russell Zimmerman said the report only touched on many of the issues currently plaguing the industry.
"As retailers struggle with poor trading conditions, skyrocketing rents are driving many businesses into the ground. The ARA welcomes the PC's acknowledgement that planning and zoning restrictions are propagating the power imbalance between landlords and retailers at the negotiation table," Zimmerman said.
Another wishy washy cop out recommendation by the Commission recommends that 'Retail trading hours should be fully deregulated in all states (including on public holidays)', but failed to address the highly unsustainable wage rates applicable to this suggestion.'
PMA - How can small to medium sized retailers compete and survive, when their cost per sq. m. in rents are ridiculous compared to big box retailers, and the penalty rates they need to pay for 7 day trading are unsustainable? This will be a "big issue" for the Labour party and the shop and Allied Employees Association as retail wages and penalty rates have to be more flexible and perhaps commission based?
Mr Mallett Executive Officer of COSBOA noted that 'Tasmania has had deregulated trading hours for a number of years, the excuse was that we would miss out on the third tranche of competition funding from the Commonwealth but there was no change in WA and they still got paid, but the penalty rates for employing someone on a public holiday remain at 250%'.
This entrenches a competitive advantage for big stores who are able to work on minimal staff numbers, provide minimal service and have significant marketing budgets as opposed to small retailers who can't afford the minimum staff required to open the door and service customers when paying double time and a half in wages.
'If the Government wishes to see the Australian retail sector enter the 21st century, open all hours of the day and night and still provide a level of service that domestic and international consumers can be wowed with, then it needs to provide an appropriate environment for that to prosper', said Mr Mallett.
'Trading hours deregulation should be a two way street. If customers can buy goods and services at any time without penalty, so should business be able to buy labour at the same terms.'
The report is publicly available and interested parties are invited to examine this draft report and comment on it in writing/and or by attending a public hearing.
The deadline for all written responses is Friday 2 September. The Commission will hold public hearings during early and mid-September. The final report will be prepared after submissions
PMA - We all recognise that the Internet has altered business forever. Hopefully this report, having been originated following the GST imports issue, will create the discussion and awareness in Govt. of the bigger issues in retail that are currently forcing reduced profitability and closures for many of our members.
Peter Rose
