Buying Camera gear online - GST level maybe lowered

[Kym]

http://www.news.com.au/money/cost-of-living/online-shoppers-could-be-hit-with-gst-on-imported-goods/story-fnagkbpv-1226467068178


ONLINE shopping could be set to get more expensive after a review recommended new tax levels for cheap imported parcels.

Under current mail arrangements, GST is generally only charged for overseas packages worth $1000 or more, because the amount of money spent recovering tax on cheaper goods was thought to outweigh revenue collected.

But a government taskforce recommended the threshold be lowered, after finding that this could be a cost-effective way to raise money and even the field for domestic retailers.

The government has received the report and will now talk to the retail industry before outlining a response.

Shop owners have applauded the findings, after arguing that customers were flocking to the internet for cheaper prices that weren't taxed in the way domestic goods are.

The report by the low value parcel processing taskforce found that the number of parcels coming into Australia was "growing rapidly''.

"The number of parcels in international mail has more than doubled between 2006-07 and 2010-11 to more than 48 million,'' it says.

"Similarly the number of low value goods arriving as cargo was around 10.6 million in 2010-11, an increase of more than 58 per cent since 2008-09.''

The group's modelling found that charging tax on parcels under $100 was not cost effective, but it could be worth putting GST on higher value goods.

It recommended "the application of simplified GST assessment arrangements for low value imported goods between a separate low value GST threshold set above $0 and below $1,000''.

To do this, Australia Post and other mail handlers would have to be in charge of collecting money

I don't think it will make any difference.
Online purchases save a lot and 10% won't make any significant difference.

Gerry Harvey can't think a 10% GST will change anyone buying online when his stuff is 200% more expensive

[ricktas]

I just bought something (non photography related), for my mum as a present. I got it from Hong Kong, and paid under $100.00 in total (including freight) to get it here. Locally the exact same item was $299.00 (cheapest I could find) Harvey Norman had it 'on sale' at $349.00.

Even if I had to pay an extra 10% I would still have ordered it online. Even if it breaks down in 11 months time, I could buy another one, and still be better off than buying it locally.

Something has to change and I cannot see GST on personal imports being the solution the retailers hope it will.

[Kym]

Gerry Harvey profits down 32% www.news.com.au/business/breaking-news/harvey-norman-profit-falls-32/story-e6frfkur-1226462363987
This twit also said in 2011 buying online was 'un-Australian' meh!
http://www.news.com.au/money/money-matters/online-sales-will-kill-jobs-retailers/story-e6frfmd9-1225981373508

[Rattus79]

so, it's "un-Australian" to save a $$ now ...

this is getting to the point that it's a joke.

[MissionMan]

Apparently its very un-australian for this behaviour to occur if it affects your ability to upgrade your next private jet to a larger $50 Million model and go for the gold plated taps instead of having to deal with standard finish.

I always love how out of touch these people are with people on the ground. Gina Reinhart is complaining about labour costs compared to Africa when people get paid $2 a day but fails to mention housing is less than a 100th of the price in some of these locations, unemployment is at 40%+ and the people being paid this have little to no education. Dick Smith complained and he has 3 helicopters if I remember correctly. I don't have an issue with people being successful, but when there is a better business model out there that you can't compete with, don't blame it on the consumers or call it unaustralian when things don't go your way.

[agb]

I wonder if we will be told what they think the cost of collecting the GST will be, and who is going to wear it. The article suggests that the mail handlers, Australia post and I presume DHL and the likes. They are not going to do it for nothing.

[Xenedis]

I have absolutely no sympathy for a retail industry that patently rips us off, especially when the cost savings are significant as per Rick's post.

The camera manufacturers don't like us buying from outside their distribution chains, so they tightened the reigns on their 'Professional Services' clubs, and no longer offer international warranties on their professional-grade lenses.

Now the government doesn't like us buying goods from overseas, as it takes a 'hit' on tax.

If they'd all bugger off and stop being so greedy, the 'hand that feeds them' would have more than one finger extended...

[I @ M]

I have absolutely no sympathy for a retail industry that patently rips us off, ----------------------- If they'd all bugger off and stop being so greedy, the 'hand that feeds them' would have more than one finger extended...

Yep, too true and as far as Mr. G. Harvey esq goes, I don't remember ever hearing any whining from him when he was selling modems at grossly inflated prices to "help" people get connected to the www. What goes around, comes around. :)

[cupic]

there is always 2 sides the one who wants to save and the other who lives for profits.
You simply cant appease both,and then the Govt who wants to screws us all :(


cheers

[Cris]

The debate goes on and on..... does anyone ever stop to consider that maybe a retailer who employs people to staff his stores at around $25 per hour per staff member and to get business has to ensure he has the best possible location, quite often at over $1500 per square meter and he is expected to compete with an overseas vendor who has very little costs and probably doesn't even speak english and has never heard of consumer rights or refunds, or alternately a backyard vendor who also doesn't share the cost structure and compliance that the retailer has. Yes sometimes prices are too high and need to be addressed but a mass exodus to an off shore vendor will only send the smaller operators and their staff to centrelink.
Somewhere someone has to make a stand or else the retail sector will be sent to oblivion. Why doesn't everyone use the same logic when they next order a coffee at $4, real cost around 42 cents. As for picking on the larger retailer who employ lots and lots of australians, take a minute and look at their investment and then make a considered judgement as to whether you would invest in that business given its abysmal return which for the likes of Dick Smith and Gerry Harvey would probably save them considerable risk and get a better return by just sticking it in the bank, be careful what you ask for-it may just come true.

[ricktas]

The debate goes on and on..... does anyone ever stop to consider that maybe a retailer who employs people to staff his stores at around $25 per hour per staff member and to get business has to ensure he has the best possible location, quite often at over $1500 per square meter and he is expected to compete with an overseas vendor who has very little costs and probably doesn't even speak english and has never heard of consumer rights or refunds, or alternately a backyard vendor who also doesn't share the cost structure and compliance that the retailer has. Yes sometimes prices are too high and need to be addressed but a mass exodus to an off shore vendor will only send the smaller operators and their staff to centrelink.
Somewhere someone has to make a stand or else the retail sector will be sent to oblivion. Why doesn't everyone use the same logic when they next order a coffee at $4, real cost around 42 cents. As for picking on the larger retailer who employ lots and lots of australians, take a minute and look at their investment and then make a considered judgement as to whether you would invest in that business given its abysmal return which for the likes of Dick Smith and Gerry Harvey would probably save them considerable risk and get a better return by just sticking it in the bank, be careful what you ask for-it may just come true.

If I can buy a product from Hong Kong and get it shipped here for $97.00 AUD, then Mr Harvey etc could probably order 200 from the same supplier and get a discount, on the cost and the freight, due to volume. If he then sold it for $198.00 I would have probably bought it from him, for the convenience of walking in and buying it. I did not need a salesperson, just a checkout person. If Mr Harvey's supply chain is causing him to have to inflate his prices, I can put him in touch with someone in Hong Kong who he could setup a whole new supply chain with.

I don't mind paying a bit more to buy locally, but when there is a price difference of 6 times or more, then someone is being ripped off, and it isn't going to be me.

[Cris]

If I can buy a product from Hong Kong and get it shipped here for $97.00 AUD, then Mr Harvey etc could probably order 200 from the same supplier and get a discount, on the cost and the freight, due to volume. If he then sold it for $198.00 I would have probably bought it from him, for the convenience of walking in and buying it. I did not need a salesperson, just a checkout person. If Mr Harvey's supply chain is causing him to have to inflate his prices, I can put him in touch with someone in Hong Kong who he could setup a whole new supply chain with.

I don't mind paying a bit more to buy locally, but when there is a price difference of 6 times or more, then someone is being ripped off, and it isn't going to be me.

Yes, Rick. you make good sense, but that doesn't make it right for a myriad of different reasons, Not everyone can make a buying decision without the assistance and gaining of some knowledge and even that checkout person will be getting about $25 per hour, as for buying in bulk, they already do, but many of the larger retailers don't pass on the savings, they just keep it, don't forget they are obliged to meet their legislated obligations with warranty and repairs, remember that retail space is very expensive, so is the cost of compliance, it just isn't that simple, the suppliers need to look at whats happening- why is it that all the camera manufacturers can have such large disparity around the globe in pricing, retailers need to accept that they need to work hard for the sale and provide a tangible service, one that makes people comfortable and feel empowered about making the right decision, unfortunately this is sadly lacking and my fear is that retail in Australia is dying and many seem to be accepting of that instead of adjusting their business model to adapt to a new environment. Too few retailers are fighting the battle to make a real difference and at the moment it seems that those who have the deepest pockets will wait the rest out- that will be the end of competition and by then the govt will probably make it so hard to purchase overseas that we will all be worse off than we are today should we chose to buy locally.
It is a complex issue and whilst i agree with a levelling of the tax field, the retail industry needs to pull its head out of its backside and start valuing customers a little more and accept that a vast majority of consumers are a little more street savvy than they give credit for, as do their suppliers. Working in retail and having to deal with suppliers I can honestly say that their retail ability is at best woeful. Thats a whole other discussion though.
The important issue really is the one of pricing disparity- which in many cases is just too much to allow for a local purchase- partly due to the reasons I have mentioned, but not exclusively.
I suppose working on retail and seeing both sides I find it very frustrating.

[Bennymiata]

In general, our retailers here make about the same percentage gross margin as most of the other retailers around the world.
Our major department stores work on the same margins as Macys, Bloomingdales etc., and our camera stores also work on similar percentage margins to other camera stores in the US.

However, where the BIG differences are is with the importer/distributors we have in Oz.

Their margins are around 5 times what the importer/distributors of name brand goods are in the US for example.
Because their margins are so high, in comparison, is why our name brand goods are so expensive at the retail level.

Most importers in the US work on a 12.5% to 15% gross margin, and our importers work on a minimum of 65% and most try to get at least 100%.
Why is this?
In the US, they are selling to a market of over 320,000,000 people, the rent they pay per sq foot is less than we have to pay here, and the average warehouse guy in the US is only earning $7.50 to $10 per hour, instead of $20-$30 per hour here.
So if our importers are selling far fewer products, are paying far more rent and have to pay much higher wages to its staff, it's no wonder you can buy stuff in the US so much cheaper than you can here.

Now Mr Harvey's stores are a little different to other retailers in the country.
Most of his stores are franchised, and every supplier to Harvey Norman has to service each shop as a seperate business (which is expensive) AND the suppliers HAVE to pay Harvey Norman's head office a 28% commission on everything they sell to one of his franchisees, so it's no wonder that goods in his stores are so expensive.

Rents for retail here in OZ, especially in Sydney, are amongst the MOST expensive anywhere in the world, and our labour rates for shop staff are around the most expensive in the world, so it's no wonder our retail prices are so high.

Simple economics.

As far as the internet sellers in HK are concerned, the importers go for low margin/high turnover sales so if someone can buy volume, they sell cheap.
The internet sellers have a cheap, run-down warehouse somewhere and employ no salespeople, mainly cheap warehouse staff, quite possibly in China to get lower rates, and a couple of guys doing the website.
They also work on low margin/high turnover, as they have very small overheads, and this is why they can be so cheap.
Many of them don't keep stock, they just buy hand to mouth as the orders come in, so they have little investment in the company and so can have lower margins that those businesses that may have millions of $$$ worth of goods sitting on the shelves.

[Mark L]

......,and then the Govt who wants to screws us all :(


A previous Govt that would never ever "screws us all" found that it was not economically worth administering GST (when they introduced it) on imports under $1000. Even with increased importing, I'd reckon it would still cost more to check everything and collect the minimal extra GST.

[Wayne]

I have been waiving the middle finger to the local distributors and retailers who have loved ripping us off for years while the AUD was in their favour, and now the tide has turned, what a shame.....not. I am a strong advocate for overseas purchasing for a better value deal, and if retailers can't get it through to their distributors, perhaps by way of refusing to buy from them, that we are no longer good for a rip-off, i feel no sympathy for any of them that go belly up.

Learn to adapt and compete or be gone...

[Presotto]

However, where the BIG differences are is with the importer/distributors we have in Oz.

Their margins are around 5 times what the importer/distributors of name brand goods are in the US for example.
Because their margins are so high, in comparison, is why our name brand goods are so expensive at the retail level.

Most importers in the US work on a 12.5% to 15% gross margin, and our importers work on a minimum of 65% and most try to get at least 100%.
Why is this?



So very true! I was using a product for my business, from the local importer that product cost me $14. The purchased in quantity from the manufacture in the USA.
I understand they had to ship and store the product here for sale.

I made contact with a distributor in the USA, from whom I purchased the same product for $5, that was the product and the freight from the USA. No matter what their overhead,
does the Australian importer, who also has the exclusive right to import the product so there is no competition, making 300% seem necessary? Now this is a consumable product,
so once I use it I have to order more. They are surely buying and for less than me most likely at the price the people who sold it to me is buying from the manufacture.

It seems every importer wants to get rich, which is great don't get me wrong, but do it in 10 years instead of 5 and let someone else make a buck or two down the line!

[Kym]

http://www.theage.com.au/business/the-economy/no-changes-planned-for-gstfree-threshold-20121129-2aiie.html


The government will steer clear of tampering with the $1,000 GST-free threshold for goods bought from overseas online stores, instead opting to improve its systems for collecting tax on imported parcels.

Retailers have demanded the threshold be lowered, but a landmark review by the Productivity Commission last year concluded that doing so did not make economic sense.

Although it would raise tax revenue of $600 million, this would come at a cost of $2 billion, it said.

Since then, a taskforce within Treasury has been investigating how to make parcel processing more efficient, raising hopes among retailers that the government is considering lowering the threshold.
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A final report from the taskforce, handed to Assistant Treasurer David Bradbury in September, said that cutting the threshold to $500 would be more cost-effective than slashing it dramatically, as some retailers have called for.

However, it is understood the government’s official response to the Treasury taskforce will not include changes to the $1,000 threshold.

Due to the complexity of having to collect extra tax from items arriving in hundreds of thousands of parcels, the government is instead expected to implement reforms to how it processes parcels.

It is understood the government is also concerned that abruptly changing the taskforce could unleash massive disruptions for consumers and small businesses.

The government is expected to publish its response to the Low Value Parcel Processing Taskforce, as the taskforce is known, in the coming weeks.

The decision not to change the threshold comes as growth in online shopping continues to accelerate rapidly, hitting ‘‘bricks and mortar’’ department stores, clothing and electronic goods retailers especially hard.

NAB this week estimated online sales in Australia hit $12.3 billion in the year to October, clocking up an annual growth rate of 26 per cent.

Despite its phenomenal growth, however, NAB said online sales account for about 5 per cent of the traditional retail market, and most of the online spending is with Australian businesses.

Gerry Harvey can keep bleating, but the facts speak for themselves.