The $ 1000 threshold at which Australian consumers can buy duty free on the Internet needs to be approached with caution. We are nearing the point when computer saturation makes just about every household a potential customer.
Myers and Harvey Norman are crying foul - and they do have a point !
Goods sold duty free must be at east ten percent cheaper than merchandise sold through conventional stores because it is not subject to the 10% GST, but there is much more involved in the costs equation.
The conventional store attracts custom by TV and newspaper advertising - and this is costly. In comparison, setting up a newsletter on the Internet can be achieved for a fraction of those prices - and the people processing the sales can be sourced in low income countries - avoiding the Australian wage system applied to those manning stores here.
The response of the government is to suggest Myers and Harvey Norman set up a similar direct sale operation - on the basis that if you can't beat them - join them !
That is a very dangerous suggestion. Both Myers and Harvey Norman are clever business people and if they set up a direct marketing deal they will most likely be successful - and that will mean a diminishing of their retail operations in our cities - and a reduction in their staffing arrangements.
It really boils down to a choice to be made by retail customers. Do we want to examine the goods before we buy and deal with an Australian sales person ? Or will we prefer to buy from a computer monitor image and click a mouse to make the sale from an anonymous person sitting at a computer several countries away ?
It isn't a level playing field if the local shop has to charge GST and pay Australian award wages - and the Internet shop pays no tax and can therefore seriously undercut the price of goods in Australia.
How we shop in the next decade will depend on the decisions about to be made !
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