Retailers ignore executives’ calls to abandon GST fight

The retail campaign to make online purchases subject to GST has been dealt a heavy blow, with prominent executives saying companies should give up the fight and accept it’ll never happen.

But the rest of the industry isn’t giving up so easily. Australian Retailers’ Association executive director Russell Zimmerman told SmartCompany this morning he believes action will be taken within the next year on reforming parcel collection – a critical first step to addressing GST issues.

“Our belief is that the government wants to do something here,” he says.

Billabong chief executive Launa Inman said at a conference yesterday that while retailers desperately want offshore purchases charged GST, they should accept “it’s not going to happen”.

“We have to learn to adapt. It is a global world now and our challenge is just to get out there and actually make it happen.”

“I don’t think that’s just the issue of the GST, I think it’s much more than that – it’s rents, it’s labour, and all sorts of things,” she said.

The comments come after Inman signed up to an advertising campaign while in the head role at Target calling for the imposition of GST on online purchases, with other major retailers including Myer and Harvey Norman signing up as well.

Myer chief Bernie Brookes recently called on the Federal Government to make more headway on the GST problem.

Inman wasn’t the only executive speaking out yesterday. Woolworths supermarket head Tjeerd Jegen told The Australian that “retailers shouldn’t ask for increases in taxes for customers”.

However, Zimmerman says while he agrees there are certainly other pressures facing the industry, the low-value threshold is a battle still worth fighting – and he suggests Inman may have simply grown tired of fighting it.

“It’s like a boxing match,” he suggests. “You get tired after a while. But I’m certainly in the ring still having a go.”

Having held talks with the government, he believes the issue still has possibilities of being addressed.

“We’ve been talking to the government and…I can’t give a timetable but…my guess is we’ll start seeing some initial activity in between nine to 12 months,” Zimmerman says, specifically in reference to reforming the parcel system.

A recent review found the system isn’t built to handle such a high influx of parcels from online shopping and needs reform before GST is addressed.

Zimmerman says this is where attention should be directed.

“We need to see reforms to parcel collection before we can see moves to lower the threshold,” he says, and points out state premiers have supported the initiative as well.

“The states need that money, so that’s why they’re supporting it. The call for the change is there.”

This story first appeared on SmartCompany.