The On Line Sales Debate

Gerry Harvey, the billionaire shopkeeper, is at risk of turning this discussion into a mass debate. His premise that people are buying from overseas retailers, via the internet, because they can avoid paying the GST is both emotional and wrong.

Let’s try to avoid the emotion, and the crap, and let’s look at a couple of very simple case histories. And let’s start with one that’s very close to home.

Just 12 months ago I needed to buy myself a new washing machine, having had my old one blow up. I did the rounds of the local bricks and mortar stores: Myer, Harvey Norman, Bing Lee, etc. I found a couple that I liked, and they were located at either of the local Harvey Norman stores. $500.

Plus about $70 delivery.

Your old machine? Sorry, we don’t want to know about it.

After just a few minutes of online searching, I located a local vendor, with a price on the same item, in stock, and about $150 cheaper.

With free delivery.

And installation.

And yes, sir, we will also dispose of your old machine, too.

Now, Gerry, these people were local, delivery came on the agreed day, for a saving to me of almost 50% off your store’s price, and GST was paid on the transaction!

Please, Gerry, explain to me where the “level playing field” that you’re stating is absent, is absent from this actual, real life transaction?

Let’s look at shoes. Pricing here, in the retail channel, is astronomical. One can buy one pair of some name-brand shoes locally for about $159, where those same shoes can be purchased, ex-USA, for about US$50 a pair. And buying those shoes from an on-line vendor also means that I have (a) a greater selection of styles from which to choose, (b) I have a greater selection of colours from which I may choose, and (c) I have a far greater selection of sizes from which I may choose.

These are vital points to bear in mind: the sizes that I need are simply not imported into this country by the local distributor, leaving me totally without a local product. “Level playing field”? With your option, I’m not even in the ballpark!

But getting back to the point, let’s now buy those three pairs of shoes: total cost is US$50/pair; total value of the order is US$150. Shipping is very often free, and thus, with the current value of the Australian Dollar, I can now get three pairs of these shoes, delivered, and that will fit me, in the colour and style of my choice, for less than the cost one pair, purchased locally, and where that pair doesn’t even fit me.

OK, let’s now play your game: and add the local GST on to the price here. That’s a whopping great … oh, yes, $15.

Gerry, do you, honestly, believe that a lousy $15 will make any difference whatsoever to my purchasing decision here, when I can buy three pairs for the price of one, those three pairs will fit me, and they will be in the styles and colours that I want, rather than those that channel thinks I might want?

If you believe that, then I have some prime oceanfront land at Broken Hill that you may be interested in buying.

And how do you propose that government, economically, collect that $15? Please explain!

Let’s take another real world example. real world examples are way better than your emotional diatribes, because they reflect … the real world.

I play a musical instrument: the electric bass. Locally, strings for my instrument cost around Au$70 a set. Except that, again, the local distributors choose to not import the strings that I need to use on my instrument. What am I to do? Go without?

Or buy them on the internet, because that’s the only place I can actually buy them, for about US$22 a set?

Again, I shall buy three sets at a time; that’s a good supply, and will see me through a couple of years’ playing. GST on the import of those three sets?


Six lousy bloody dollars and sixty lousy cents!

Again, do you believe that a lousy $6.60 will make me change my buying habits, when I simply cannot buy the damn things locally anyway? What the hell are you smoking, Gerry? Please pass it around!

And again, you’ve not demonstrated how you would collect that $6.60 from me. Make no mistake about this: I am perfectly happy to pay the GST; it’s only for the government to ask, and I will pay.

Now, Gerry, I was listening to you prattling on about this on the ABC the other morning, and you were commenting on how you were with your wife in a New York shop asking the sales assistant about whether Australian taxes were contributing to their on-line sales. A couple of observations, if I may:

1: It’s a bit rich for you, a billionaire, to be bleating on about this matter and bringing into consideration your recent trip to New York. Quite an affront, and quite offensive, to Joe Public in Oz, I would respectfully suggest.

2: I doubt very much that typical sales person has that much knowledge about Australian tax law, or about any Australian tax scenarios. Probably about as much knowledge as your typical Harvey Norman salesperson might have about New York State’s state sales taxes.

Gerry, do you have the courage, the professional integrity, to answer the questions that I’ve asked? I’m sure you know how to find me.