GST issue ‘not about the internet’, claims Harvey

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Billionaire retailer Gerry Harvey today said the debate about foreign retailers not being forced to collect GST on some Australian purchases had been misconstrued to be a battle between companies like his Harvey Norman empire and the internet.

Harvey Norman — along with fellow retail giants Angus & Robertson, Borders, David JOnes, Just Jeans, Myer and more — today published an open letter (PDF) demanding a “fair go” in the retail sector and that international retailers had the edge over Australian rivals as they weren’t forced to collect Goods and Services Tax of 10 percent on purchases under $1,000.

However, Harvey told journalists in Sydney today, the issue had become “confused” and “out of control”, particularly as listeners had hit talkback radio to complain about Harvey Norman’s internet presence — or the lack of it.

“People come on, and they start talking about, oh these retailers are out of date, they haven’t got internet sites, or they should get on the internet more,” he said. “That’s not what we’re talking about. We have overseas retailers, that do not pay duties, that do not pay GST, and we have to compete with them.”

“All we’re saying, is, we want a level playing field.”

Harvey claimed the end game for the situation would be that if international retailers weren’t required to pay GST and import duties, employment in the retail sector would suffer. “Nobody would be employed in the retail sector,” he claimed.

A number of readers and customers this afternoon raised the issue of Harvey Norman’s prices, claiming they were more expensive than rivals — even accounting for the 10 percent GST. Asked about the issue, Harvey reiterated his call for the debate to be about Australian retailers versus international retailers.

“We’re not talking about internet sales in Australia, prices in Australia,” he said. “Unfortunately, that’s where the debate has been going, but that’s not where it should be. It should be squarely about Australian retailers versus overseas retailers.”

At the press event in Sydney’s flagship shopping area of Pitt St Mall, the executive was flanked by David Jones general manager Helen Karlis and International Fashion Group chief executive David Mendels, who backed Harvey’s comments on the GST issue, stating their companies were willing to compete, but wanted a level playing field to do so.

But at least one Australian electronics retailer doesn’t appeared concerned about the GST situation. In late December Kogan Technologies chief Ruslan Kogan — whose Melbourne-based business has positioned itself squarely against Harvey Norman and which has been conducting a pricing, public relations and marketing war against the electronics giant — described the GST efforts as “a scare campaign”.

“Some of these big retailers need to spend less time lobbying the Government to limit the choice of shoppers, and more time worrying about how they can improve their businesses to offer better value to Australians,” wrote Kogan at the time.

Asked about Kogan today, Harvey didn’t appear to want to comment about upstart electronics entrepreneur — who is currently expanding his business into the UK.

“Oh, forget him, I don’t even talk about him, come on,” said Harvey.

Video credit: Delimiter

28 COMMENTS

  1. Hmm, I’ll watch the video when I get home, but it seems clear to me that the only one who doesn’t ‘get it’ is Mr Harvey. Nobody is buying from Wal-Mart or whatever he’s talking about. This is strictly about buying online vs buying in a bricks and mortar store. I don’t see how you can argue otherwise.

    Secondly, the UK has VAT, which is much like GST here, but we don’t pay VAT when we buy from a UK retailer. If he were to set up Harvey Norman online, he’d be free to sell to the billions of people who don’t live here, GST-free.

    • OK, I watched the video and I still don’t see his point.

      Sure, I like to fly to Hong Kong on my private G6 for a bit of retail therapy as much as the next billionaire, but you can bet that most Australians, when we say “overseas retailers” are actually talking about “online retailers”.

  2. I nearly passed out from the amount of *cough*bullshit*cough* that Gerry Harvey caused in that article.

  3. So its “not about the internet”, its about international retailers… how exactly are they an issue for an australian retailer unless they had some awesome way of communicating what they sell in THEIR country to us here in Australia? Something kinda like the Internet would suit them I think.

    Someone should tell Gerry that if he doesn’t like them selling stuff to Australian’s that gets in without GST, he should start selling to the customers of these “international retailers”. Turn about is fair play… or perhaps those consumers wouldn’t be any more interested in what Gerry’s flogging then Australians apparently are :).

  4. Most the items I buy from overseas are not available in Australia. Gerry wants to stop me buying anything from overseas, becasue I can guarantee no OS retailer will be bothered doing the extra paperwork that will go with GST on Aussie purchases.
    Why would I buy from a retailer who’s demanding the Government increase taxes..
    Sorry Gerry.. it’s a complete boycott on Harvey Norman for me.
    Forget about the small amount you lose to OS ourchases, the buyer backlash from your stupid campaign will make it look like nothing !

  5. In the early 80’s their was a lot of concern about computers putting people out of jobs, and they did, lots of clerks became redundant as people started using more efficient technology, it was a good thing for society.

    Its inevitable that this information revolution we are in will reduce the need for old school information channels such as retailer assistants, we know we want (We Googled it) just give us an cost efficient and fast way to get it.

  6. What a piece of arse-about misdirection. Harvey was trying to say that people are arguing about Harvey Norman vs online retailers in Australia. BULLDUST!! People all over Australia are pointing out — quite rightly — that if you can buy the same thing overseas at 50-75% off, the problem has NOTHING to do with GST and duties.

  7. Dear Gerry and co, electricity, water, gas, toll, transport, petrol and grocery prices have all skyrocketed. As a consumer I have no choice but to pay while I see my standard of living fall. So what’s your excuse?

    Suck it up princess!

    Find a fair way to compete or get out of the business. Me paying more tax isn’t an option (I already give to charity and I’m not willing to add profitable businesses or billionaires to the list).

    Boycott Harvey Norman and friends now!

  8. Just amazing…..I work in the communications/television industry – 19 years- and am amazed at the level of GREED and HYPOCRISY that are behind this campaign. I have customers who are convinced into buying products from Australian retailers for grossly inflated prices – $149.99 for a HDMI lead for example. Wall brackets – power boards etc are all massively over inflated. Could it be that consumers are more aware of pricing through the instant medium of the internet and are actually becoming ‘pro-active’ and making their purchases elsewhere?

    It used to be “let the buyer beware” – perhaps now it should read ” let the retailer beware” !

  9. Harvey Norman wants to complete against online retailers with price, which is arse-about … either he can do it already and doesn’t want to, or he can’t (and maybe never will be able to). But price is the wrong argument – bricks’n’mortar retailers should be competing on things that online retailers CAN’T match … personal service, the shopping experience, touch-and-feel … but can’t see past their own noses.

  10. Oh Gerry you are sounding so archaic with your comments. I love how you dismiss Ruslan Kogan who runs an Australian internet business. Keep in mind both Gerry and Ruslan import and sell goods made in China and other overseas countries.

    Gerry is well known for his complete disregard for internet-based commerce. Like record stores though Gerry’s retail business is looking more and more irrelevant in today’s modern economy. I certainly have no intention of ever shopping in a Harvey Norman store with overpriced goods run by people who should have never left their used car selling businesses.

    • Addendum:

      I think Gerry needs to be more concerned about his competitors like JB HiFi and Good Guys who I would argue are currently stealing the bulk of his business.

  11. “A fair go fir retailers” says it all really… the issue is that consumers want a fair go and the total lack of recognition of the change in consumer behaviour towards retail has nothing to do with GST on overseas goods and everything to do with accessibility to these goods online when you CANNOT get them in Australia.

    Whos fault is that?

  12. Dear Mr Harvey,

    I am truly sorry I showed my mother how to use the internet. I do appreciate this has made it harder for you to sell items that can be sent though the post.

    Best of luck in the past.

    @XNoArchive

  13. Kudos Renee for being the only news outlet that linked to the original press release.

    You’re absolutely right this isn’t about GST, it’s about the death of both Gerry’s interest free sales model and Myer’s desperate perpetual discounting strategy.

    Both worked for the last bit of the 20th Century and the first few years of this century but are now running out of steam.

    Consumers are going online because the big Australian bricks and mortar retailers have neglected their strengths while ignoring the rise of online channels.

    Smaller retailers have seen this and adapted – Ruslan Kogan, Shoes of Prey and Vic’s Meats are good examples – but the major retailers are stuck in some sort of 1980s time warp which is now killing them.

  14. I recently purchased a ham radio direct from the manufacturer in the US. I ordered over the internet, but could have used a fax just as easily (if only I owned a fax machine).

    The order was > $1000, so I knew I was up for GST. What I didn’t expect was that 3-4hr of my life would be soaked up filling out forms and faxing them (time to break out the fax modem) to Customs so they could assess the GST amount. The forms included the actual clearance, registration of myself in the system, registration of the supplier and 100 points of ID. Once this was sorted out I then had to pay another $48 for the manual entry.

    I could have purchased a digital certificate from Verisign (sole supplier) for $170 that is only valid for 2 years and done an online entry for $30. I could also have used a postal specific customs broker and think that is what I will do next time.

    If the government are even entertaining collecting GST on small amounts then they need to:
    1. Discover online forms and document submission.
    2. Reduce the digital certificate costs to something reasonable (ie. free) or allow the AusKey to be used too.
    3. Drag themselves out of the 1990s.

    The only other time I had to pay GST+duty was about six years ago for some shoes I bought from the US (Adidas refused to import them into Australia any more). Everything was precalculated and I just paid at the post office when collecting the goods. So much for the ‘new’ and ‘efficient’ Customs computer system.

  15. Harvey has been saying for years that US retailers were hysterical about the internet and that it wouldn’t have an impact on Australian retail. Now, finally, it is having an impact, and Harvey is paying the price for his own complacency. Another major retailer is in a similar predicament because their CEO was too busy sexually harassing the staff.

    In watching that piece I half expected Margy Osmond to pop up and say that all the naysayers are wrong because everything in retail is tip-top and tickety-boo, undercutting Harvey et al and their gnashing of dentures.

    Please, can we have a generation of retailers that really gets the internet and who’ll just take over and get on with it, and hopefully apologise for these ridiculous dinosaurs.

  16. Classic case of Goliath trying to look like David. What about the war waged against small mum and Dad retailers to put them out of business from the likes of Harvey Norman? So many small electrical and furniture outlets have gone under after being monstered by Harveys. We need laws to govern price discrimination in this country where buying groups like Harveys get far better pricing from suppliers to have the level playing field Gerry is demanding. No tears for you Gerry, especially when you encourage people to get the best price and then call them un-Australian when they do.

  17. So you want a level playing field Mr. Harvey?

    Here is what you do:
    Sell on-line to over 200 countries, but don’t charge them the Australian 10% GST. And it is legal.

    You can sell to the European Union and save them 20% VAT.
    You can sell to New Zealand and save them 15% GST.

    Boy, what a big kick start this will be for you.

    But your prices will have to be competitive, as they buy from the same shop you do. It’s called China.
    And your shipping costs will have to be competitive too, otherwise there will be no advantage for them to buy from you.

    NOTE *** These comments apply only to what I consider low value goods. Under $1000AUD.

    Cheers Don…

  18. Harvey Norman , dont say 1 out of 10 will be out off work cause if you go online you still need a Warehouse to store the stuff, you need to empolyee people to package the goods and move the goods from trucks trains etc… there will still be jobs if you went online as well. Instead off employing them in the shops of Australia they would end up working in the warehouse instead. Either way they still have a job … Get with the times!

    By the way I have checked out your shops, but I have never brought anything from your shops cause your too expensive anyway! That how Australians see you! Money Hungry!

    Now what would happen if every Australian Boycotted all the businesses Involved – you end up bankrupt!
    Wake up Mr Norman, you business could already be in trouble by your comments!

  19. One thing that Gerry is ignoring is that the money saved by purchasing overseas is still spent on other goods. If I can save $300 on some shoes then that $300 gets spent elsewhere.

    The only person really missing out is Gerry and his profits. It isn’t like a local small appliance manufacturers are missing out with the imports, since Gerry is getting his stuff from China too.

    The role of the wholesaler/distributor has changed with the internet, which has made overseas manufacturers visible to the whole world. Just as the music industry has changed, now it is time for retail to do the same.

  20. What a fantastic Australian that Gerry Harvey is, he wants to save us and save our jobs from those rich, money grubbing, profit mongering overseas retailers! What he he forgot to mention is his real agenda which is to maintain and/or improve the status quo and have his company continue to gouge everyday hard working Australians.

    Thanks Gerry, but I for one will not be buying anything from you or your company..

  21. I live close to a Harvey Norman store. When I bought my Pentax k20d Camera Harvey Norman did not stock it so I bought it online. When I bought my photo Epson 3880 Printer Harvey Norman did not stock it so I bought it online. I have a Fenix TK35 flashlight ordered online, Harvey Norman do not stock it. Wake up to yourself Mr Norman and leave me free to purchase online.
    My refrigerator has stopped working so I’m off to Retravision to buy a new one, no more Harvey Norman for me.
    Kind regards.

  22. Harvey Norman is the most expensive retailer in Australia, and he is got the hide to talk about GST, I wonder how much Taxes he pays, probably none?
    Because he lost a lot of money on the Stock Exchange he trying to recover the Money from the online shoppers like us, that greedy punk!
    We use to buy a lot of stuff there but now, Gerry you can get stuffed you rich mongrel!
    Our refrigerator has stopped working so I’m off to buy same were else but Harvey Norman.
    Jerry you are nothing but BS, what about all the Couriers which deliver the stuff, they have a Job too.
    So who cares about Harvey Norman! No one!
    Australian’s let’s fight back and sent his shops to Hell.
    Cheers

  23. If Gerry and his cohorts are fair dinkum they should be campaigning for the removal of GST from goods less than $1000 purchased in Australia – then we may get an honest comparison.
    I wanted to buy a DVD wallet that held more than 100 discs – the only place I could find it was England. So much for local shopping.
    Drew

  24. I hate this loser!!! i’ve boycotted all of his stores (hn, domayne etc) along with all of his friends stores- such as solomon lewis (portmans,jayjays etc) and mr westfields. Along with target, dymocks, borders etc etc myer david jones etc. BOYCOTT

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