Do we have G.S.T. or not?
- October 25, 2011
- by
- spiros
Do we have g.s.t. or not?!
Having listened over the last few days I am amazed at the public reaction to the question of charging g.s.t. or not on internet sales. It seems that many are merging three very different arguments into one and I think the outcome is going to be one that does not work for all if this continues.
The Arguments
- 1st Should we be charging g.s.t. on internet sales
- 2nd Goods are too expensive in Australia especially with a high Australia $$
- 3rd Its impossible to charge g.s.t. on internet sales so why bother
Should we be charging g.s.t. on internet sales?
I think we should if we can! Why should a business that pays Tax, Rates, Wages and Rent within Australia be disadvantaged by a company that does not.
To say that companies are whingeing is right, they are and fair enough. Currently I hear of internet companies that are setting up their business outside of Australia to specifically sell into Australia. In doing this they bypass all local taxes including company and income tax. Surely this can’t be good.
There is an alternatively which is to get rid of g.s.t. I don’t have a specific preference but if people have a problem with internet retailers paying g.s.t. then why don’t they have a problem with g.s.t. in general?
Goods are too expensive in Australia especially with a high Australia $$
Fair point on the whole, people need to recognise that g.s.t. is only accountable for 10% of the price difference; having said that we need to keep this in some perspective as there are a number of other factors that do come into play such as movable exchange rates, warehousing, transport, etc…
In other words this is a big and complex argument but would like to concentrate on one very clear issue that Australia has when it comes to internet retailing and that’s transport cost/infrastructure. Australia businesses should have one MAJOR competitive advantage over any overseas retailer and that is speed and convenience. One of the major contributions to increased prices in Australia is the cost of warehousing and transportation yet the advantage of getting product to customers quicker and cheaper is often removed by the cost and slow speed of moving goods within Australia.
Why is it that people can get stock from Texas to Sydney faster and cheaper than many can get it from Perth to Sydney. This is a major issue and perhaps some of the revenue from g.s.t. should be focused on this problem.
By enabling businesses to provide better service and cost is surely the best outcome?
It’s impossible to charge g.s.t. on internet sales so why bother
I am sure there was a day when ships used to turn up on the borders of Australia and people said this was too big a land to bother with customs.
If e-retailers today can determine if the Credit Card, the IP address and the delivery Address is from Australia the technology to gather that revenue will be there. If it is not today then it will be tomorrow.
In conclusion
Charge g.s.t. or remove it all together. If you charge g.s.t. then change it on all goods and services when it’s possible to-do so and yes I agree everything should be cheaper just make the playing board equal.
Note: all thoughts in are personal and do not necessarily reflect any organisations I represent.
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1 Comment
ross
6th Jan 2011 - 1:27 amI agree with 1 and 3, but shouldn’t the high $AUD make it cheaper to import goods. Therefore it is nugatory for someone to try and argue that goods are too expensive due to the high $AUD at the moment?
I think a more valid argument from consumers is that despite the high $AUD, retailers aren’t passing on the cost savings they achieve when importing goods. Personally, I just had to pay $359 for a Microsoft product that was only available through their AU store, where as it is listed at $199 in their US store. I assume that is because they haven’t adjusted their prices to reflect the strong $AUD, either that or they gouged me.