Australia’s biggest retailers to lead a renewed push for GST threshold changes

Some of the nation’s largest retailers are meeting tomorrow to discuss issues affecting Australian retailers such as the goods and services tax on online imports and competition laws.

Members of the Australian National Retailers Association, Harvey Norman, Bunnings, Coles and Woolworths are putting aside their rivalries to have a broad ranging discussion, as the big retailers mount their push for the GST-free threshold for online purchases to be lowered from $1000 to $20.

Should the current GST exemption laws be changed, it is expected to raise $1 billion a year and the ANRA say it is a necessary change to make Australian retailers more competitive.

ANRA chairman and managing director of Bunnings, John Gillam, will also be pushing for talks with Prime Minister Julia Gillard and Opposition Leader Tony Abbott, according to The Australian Financial Review.

“We are looking to walk the talk and roll our sleeves up on issues of real significance, not just preaching from a self-interested perspective, and approaching things from a truly partisan perspective.

“We think partisanship is deeply helpful for the challenges that the wider Australian community and the business community face,” Gillam told the AFR.

Gillam is calling for Australia to enact similar laws to the United States Marketplace Fairness Act, which was passed by the US Senate in May this year and states online businesses will need to collect state sales tax based on the shipping address of online orders.

“The principles in that are very clearly the principles we think need to be adopted to ensure there’s taxation fairness.

“This is not in any way a bunch of Australian retailers whingeing; this is a common problem throughout the western world and other governments are leading the way, showing how it can be addressed,” Gillam says.

The ANRA is pushing for registered online retailers to collect GST and duty from consumers and pass this onto the federal government and where a retailer isn’t registered the parcel would be stopped at customs and consumers would have to directly pay the costs.

As well as the push for the online GST-free threshold to be lowered, the ANRA retailers will also be discussing productivity and competition regulation.

One of the initiatives designed to increase productivity is discussing with the Shop Distributive Employees Union about possible changes to the Fair Work Act.

“We believe that by working quietly and effectively with the SDA that can help paint a clear path for government to make quick and effective changes that will be welcomed by all.

“We should put forward joint solutions that guide government on areas where legislative efficiency can be achieved,” he says.

SmartCompany contacted ANRA, but no comment was available prior to publication.

Retail Doctor Group chief executive Brian Walker told SmartCompany better communication with unions and lowering the GST-free threshold would benefit both big and small businesses.

“What this group is fundamentally lobbying for are conditions which make Australia globally competitive in retail.

“We need to even the playing field. Retailers need to be profitable and costs such as wages and rent make this difficult,” he says.

Despite the positive steps proposed by ANRA to further all Australia retailers’ international competitiveness, Walker says the body is composed of the big retailers and its stance on competition laws is to the detriment of small retailers.

ANRA is countering calls from small retailers for tougher competition laws, particularly in relation to the supermarket duopoly of Coles and Woolworths.

“This is a far more competitive landscape and when there are calls for regulatory action, [government] needs to recognise that consumers are benefiting greatly from the lower prices,” he says.

Gillam says existing laws are adequate to deal with “instances of bad behaviour” and there is no need for tighter competition rules.

“It depends on whose perspective you take. If you take the perspective of a small retailer, you’d want to be able to compete and have competition laws stop you from being muscled out,” Walker says.

Walker says he wouldn’t change the current legislation, but he thinks a competition watchdog is important.

“Figures show over 80 cents of every supermarket dollar goes to Coles and Woolworths, it’s a huge amount.

“Competition is important. We live in a country which is dominated by the larger retailers, which are only getting bigger through vertical integration, and we’ve already seen the death of the corner store,” he says.

Walker says he applauds the ANRA initiative to facilitate talks between the major retailers, but it needs to benefit all retailers.

“The reality is Australian retailers are disadvantaged, so to this point, changes need to be made if Australian retailers want to be able to compete internationally on a level playing field.

“The initiative for lowering the GST-free threshold was originally led individually by Gerry Harvey and this was perceived to be driven by self-interest. At least the collaborative approach will bring unison,” he says.