Wandering China

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GST pushes Myer online to China [The Age]


GST pushes Myer online to China
Eli Greenblat
Source – The Age, published December 3, 2010

Myer is working on an international retailing website that will sell goods to Australian customers, shipping them from a warehouse in Shenzhen in southern China to avoid the GST and make Myer more competitive.

At a business lunch in Melbourne today, Myer chief executive Bernie Brookes said the company was working on the website, which would be up and running in February.

Mr Brookes said the company was creating the new site out of frustration over a lack of action from the federal government over GST-free shopping online.

Retailers, including Harvey Norman’s Gerry Harvey, have called for the current $1000 GST-free threshold to be lowered to curb shoppers buying online from overseas suppliers.

Mr Brookes revealed that he wrote to Treasurer Wayne Swan four weeks ago to raise the retail and tax issue with him but to date had not received a reply.

Myer is the biggest department store operator in Australia.

Mr Brookes said local retailers had to find a way to counter the competitive threat from overseas.

”If we can’t beat them, we’ll join them,” Mr Brookes said.

Myer’s Chinese-based website will source products from the company’s factory hub in Shenzhen and will use China Post and Australia Post for distribution.

Mr Brookes warned that if the Myer website proved successful, he believed other retailers such as Woolworths would follow and create their own sites, further eroding GST revenue for the government.

Last week, Harvey Norman executive chairman Gerry Harvey called on the federal government to scrap the GST-free threshold on goods bought from overseas for less than $1000.

The recent strength of the Australian dollar has encouraged a surge in online purchases, with Australians able to get more for their money than at time of weakness in the local currency.

And the latest move comes after shocking retail trade data released by the Australian Bureau of Statistics yesterday.

The figures showed retail trade had fallen 1.1 per cent in October – a much worse result than the 0.4 per cent rise that experts had expected.

Mr Brookes said that ultimately a shift by the retail sector to overseas online sites could cost jobs but, at this stage, the Myer-planned China website would only affect its warehouse and logistics operations. Job numbers would not be affected at this stage, he said.

egreenblat@theage.com.au

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Filed under: Australia, Chinese Model, Economics, International Relations, The Age, Trade

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