Harvey Norman calls for GST on web sales


At the risk of upsetting my fellow blogger Peter Donoughue, I’m going to draw attention to Harvey Norman supremo Gerry Harvey’s much reported grumble regarding the lack of a GST on overseas goods imported into Australia from online retailers (or, more accurately, goods costing $1000 or less). It follows hot on the heels of Dymocks’ well-orchestrated PR stunt on the same topic.

Harvey’s company is very big and very successful and has arguably been responsible for putting lots of smaller retailers out of business itself, so it’s hard to feel for him, but he speaks for many retailers, including many booksellers. As I’ve observed on this blog previously, the playing field isn’t level at present – overseas internet businesses are given an unfair advantage against local retailers by not having to charge their customers GST.

People are voting with their mice and doing their shopping online. Ultimately, that will mean less retail jobs in Australia, less tax revenue for government and less retail outlets buying from local manufacturers (like book publishers) and distributors, and therefore less local producers as the local market contracts.

Maybe this is inevitable. No-one can fight the globalisation that the internet brings with it. Neither can they stop the battle between bricks-and-mortar retailers and online retailers. But to force local retailers to compete with one hand tied behind their backs is simply unjust.

I also agree with Harvey’s description—’bullsh*t’—of the suggestion that’s ‘it’s just too hard’ to implement a GST on online sales. If tiny little businesses such as ours can be transformed into efficient GST-collecting machines, it should be a cinch for Amazon and co with their fully automated service delivery. After all, they already collect sales tax for other territories around the world.

Incidentally, as a publisher this has the potential to affect our business in another way. Amazon, you see, is starting to publish books and has recently made a bid for a book we are also in the running to acquire. Now, it may be we can acquire the Australian rights to the book and Amazon will get the US and/or UK rights. But how could we compete with GST-free copies of Amazon’s edition coming into Australia? I’d back us to do a better-edited, better-produced book than them, and in Australian English too, but it would inevitably be more expensive to buy. So who’d buy it?

Of course, my preference would be to do without a regressive tax such as the GST completely. No-one wants books to be any more expensive than they have to be. Alas, we lost that argument back in 2000.

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