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  • horses

    What will the Australian rent seekers do when they realise that an extra 10% of protectionism isn’t enough to have people endure their crappy service and limited offering? If they want to compete, they need to learn from their competitors and stop blaming things like wages (which are only a symptom of other inflated costs in Australia, like land). Bikebug and a few other local online retailers seem to be able to do this, and as a consequence get my money even when they are more expensive than buying from overseas (same day delivery!).

    • Steel

      What protectionism? The current policy protects off-shore interests at the moment by exempting from GST?

      I think you’re conflating the market power the manufacturers/local distributers with Government policy.

      • horses

        I wasn’t referring specifically to the bike industry with that comment, but it’s obvious that while a lot of the proponents for the change claimed they wanted a level playing field, what they were really looking for was a way to make buying from overseas much less convenient than buying locally. I’m not opposed to the collection of GST if it adds no additional cost (e.g. processing fees, delays), what I am opposed to is lazy business people who lobby the government instead of adapting to the changing market.

        Having said that, it’s interesting that Peter Bourke mentioned Australian standards – is he doing anything to have some of the more pointless (protectionist) ones removed, like Australian helmet standards? (I don’t know the answer, if he is then that’s fantastic)

        It’s pretty simple: if you want my money, give me a reason to buy from you, don’t give me a reason to not to buy from someone else.

    • Dave

      I agree. The bike industry here is too stagnant because there is not enough competition.

  • scottmanning

    Have they forgotten the point of the tax threshold is that the costs to collect the tax is more than the tax? I personally buy 99% of my goods from the LBS. They really look after me but I am lucky, I cannot see how adding 10% is going to kurb the buying habbits of online shoppers when the price difference is siginifcantly greater than that. It’s still going to be much cheaper to buy OS.

    • Dave

      That applies if it’s the traditional process of paying duties at Customs.

      What they are allowing the big players to do is to register for the GST just like any other business in Australia does, a Wiggle or CRC box won’t get any attention at Customs.

  • jules

    in principle, it’s only fair that GST be paid on imported goods. Peter Bourke is correct that tax is needed to pay for stuff like roads, health care, etc.

    the problem is that the proposed regime is to be regulated in a way that I personally dislike – relying on honest players to comply. essentially this punishes honesty (overseas retailers who sign up to pay GST) and rewards dishonesty (not paying GST – which the ATO apparently have little plan to chase up).

    in practice the big players (Wiggle, CRC, etc.) are too big to dodge the tax, while the range of smaller retailers (e.g. on EBay) will likely dodge it – probably with relative impunity. however, the smaller retailers don’t tend to have the buying power of the bigger ones so pay a price premium, which balances out their competitiveness a bit.

    I don’t think it’s a bad thing, overall. I also don’t think it’s going to fundamentally change the market and how online, overseas retailers do business with Australians.

    • scottmanning

      So this is simply about more revenue for the government, not about helping local industry and encouranging Australians to spend within Australia?

      • jules

        i wouldn’t think so – it’s obviously about those other things. but I’d argue it could be justified on the grounds of increased tax revenue. that’s the important bit. it makes sense, even if there is some less-justified hand wringing in the background.

      • Sean Doyle

        I think it’s more trying to keep the retailers happy. I have read many times over that it will end up costing more to run that they collect so there is no revenue but possibly more jobs in it. Swings and round abouts.

        • Dave

          That wouldn’t apply to the big players though, for them to register for GST would be little different to an Australian business registering for GST.

          Only smaller businesses would have packages inspected at Customs and the buyer charged GST plus a collection fee.

          • Sean Doyle

            That makes sense but then you could argue that smaller companies wouldn’t sell the volume to raise enough GST to cover the cost of policing the system. Unless the collection fee is substantial. I won’t pretend I understand the process really just shooting from the hip.

            • jules

              I argued that they won’t police smaller companies. It would be impracticable.

              • Sean Doyle

                So the real aim is to target the volume importers? My head is hurting trying to figure it out.

                • jules

                  keep it simple – that will maximise tax revenue. I doubt the ATO are debating the finer points of bicycle retaining ;)

                • Dave

                  Bigger return for minimal effort. It’s a winner.

              • Won’t the smaller companies just get picked up via customs? Parcels coming in with a receipt or declaration value about $20 will have the tax applies to the recipient, like is currently done on items over $1000.
                Parcels from the large online sellers will have their custom declarations on them showing the GST has been declared, and therefore won’t be charged again?

                • jules

                  declaration value, lol :)

    • Steel

      Not sure on this one jules? You pay the GST at customs if the goods are above a certain value. This should apply equally to ebay retailers as well as wiggle and CRC

      • jules

        in theory… the reason why a $1000 threshold was originally put in place was that the cost of customs physically inspecting every package would exceed the incremental tax revenue collected. the solution being put forward here is to remove the threshold, but continue not inspecting packages. if you are a major online player, the fact you haven’t registered for GST would be noticed, irrespective of customs activities at Australian ports. if you are a small Chinese retailer from Shenduang province, my bet is the ATO will never get around to visiting your operation to hand you a “how to register for Australian GST” brochure, nor will they likely ever follow up. so not in practice.

        • Dave

          But people will stop buying from the little players overseas if the cost of Customs charging the GST and a processing fee outweighs the benefits.

          • Sean Doyle

            This is probably the desire effect I guess. Burden the unregistered import with fees and forms and make it take too long and cost too much.

            • Dave

              And I don’t have an issue with that. We don’t need to be giving free kicks to fly-by-night operators who can’t be bothered paying the appropriate taxes.

              But people will still go for it if the benefits justify it – like a mate of mine who bought some customised guitar equipment from Canada (not available in Australia) in full knowledge that he would need to pay Customs for the GST and a processing fee.

              • Sean Doyle

                Neither do I to be honest. As your mates position shows sometimes the product isn’t available and it costs what it costs. I have no issue with them changing the rules Im just trying to understand the benefit. My online/lbs buying decisions come down to whether I need advice, trying on for fit, time frame of need and price difference. It will remain like that regardless of gst rules.

                • jules

                  it’s driven primarily by collecting more tax. local industry protectionism is a happy side effect.

                  • Dave

                    Protectionism is about creating artificial barriers to imports – for example the ADRs for vehicles which should be abolished and EU/UK standards adopted now the local industry doesn’t need protecting.

                    Forcing imports to be subjected to the same taxes as local sales is not protectionism.

          • jules

            no, I’m suggesting they won’t have the resources to do that – not on any major scale. I’m suggesting that smaller retailers will be able to dodge GST and fly under the radar. I just can’t see customs inspecting every package and processing it if non-GST compliant. it would be a logistical nightmare – additional fees or not.

            • Dave

              But if they go for a random inspection policy, would you want to take a punt on it as a customer?

              • jules

                that’s essentially the proposition, I’d say. whether it’s worth it or not depends on a few factors, yet to be determined.

                one of them would be the amount of GST saved..

              • RayG

                Sure, why not? From memory the cost if you got caught would be a $50 fee, plus GST on the price+shipping+fee. That could still be cheaper than local retail.

    • Lyre_bird

      The plan at the moment is for goods which are not sourced from a GST registered business to be subject to on the spot assessment which will result in the buyer paying GST plus a fee to recover the cost of the assessment. I say “at the moment” because with the current mob anything can change if Rupert doesn’t like it.

      I don’t care about the GST, I can claim it back anyway, but my experience with the assessment system is that it will become a bureacratic flustercuss of epic proportions when the volumes increase due to the threshold reduction. This will not be adequately resourced because the Border Farce has other priorities.

      • jules

        you’re surely right that there’s no way they can handle that volume of packages.

  • scottmanning

    Distributors in Australia have a lot to answer for too. I live in a regional town and patronise a small LBS. They simply cannot stock everything so that leads to less common, or expensive (say wheels) purchases being placed on order. It is typical for the item to take two to three weeks to arrive from the distributor, and in two occasions this year, three months! Frankly they need a fair kick up the arse because I could have had the item cheaper, delivered from OS within one week. It used to be fast delivery, and ease of warranty issues were the main reasons to buy local. Well, scrub fast delivery off the list, and warranty??? Well you have to beg and grovel for a warranty claim via the distrubutors, where as the big on-line stores replace your item and two weeks later and you’re done. Postage cost is basically the same within Australia or OS since I am regional anyway. Simply, the distributors are burning off the last insentives to buy local.

    • jules

      I sympathise with that, but it isn’t a valid reason to give overseas retailers a ‘free kick’ on tax. rather, it’s a reason why they will still compete, even after having to pay GST.

      • scottmanning

        Fair enough. Charge the GST, I have no dog in this fight since I pay GST locally now. The industry group that has been lobying for this is sadly mistaken if they feel that the GST is the cause of their problems though. They really need to take a good hard look at themselves, maybe do a better job and then they will find more people will be willing to deal with them.

        • jules

          I agree. it won’t save them. but it will help (a little) plug a budget revenue hole that is a genuinely serious issue for ordinary people – much more than 10% extra on bike parts.

        • Sean Doyle

          Yep. Agreed. The re is new bike shop going in in my area and it already sounds like the tired old business model and clichéd shop. I hope they bring something fresh and they do well as we do actually need a couple shops in the area, but it doesn’t look good already.

        • Dave

          Yes, and that’s why I support the same taxes being applied to imports as local retail, even though it will make some stuff a bit more expensive for me.

          Local retailers which are uncompetitive should be beaten fairly, not unfairly – and the local retailers which are competitive deserve to have a level playing field so they can beat Wiggle or CRC or Kogan or Amazon.

          I don’t buy bike components form Wiggle or CRC to avoid paying taxes, I buy with them because they are significantly cheaper and provide a better retail experience than a tired old bike shop.

    • Kim

      + 1 for warranty issues. I bought my first road bike in April 2014 (from my LBS). The rear wheel (Fulcrum) failed with 6 months. Several fractures in the rim. The distributor refused to acknowlege warranty depsite best efforts of LBS. Apparently it was my fault for being too heavy, even though I am lighter than the maximum weight specified in the warranty booklet. The wheel is an entry level race wheel, probably retails for less than $200 and they still wouldn’t cough up.

      • il gregario

        Let me get this right…a $200 wheelset lasted only 6 months. And what exactly were your expectations?
        There is a maximum weight, but there is also a preferred weight range. Two very different things.
        Furthermore, if companies continually forked out to replace cheap components, there’d be no manufacturers left.

        • jules

          wow.. really? by law, a product must be ‘fit for purpose’. for a wheel, that usually means it will keep turning for a reasonable period of time/usage. 6 months doesn’t seem sufficient to me. there is no allowance for price – it doesn’t matter if the wheel cost $1 or $1M.

          • Il Gregario

            It is fit for purpose. 6 months is a reasonable period for a cheap wheelset. It’s all about expectation.
            If I was to buy that wheelset, then proceed to ride from Sydney to perth, then back again, all within 10 weeks, would the wheel still be covered under warranty within your hallowed “fit-for-purpose” or would you put it down to wear and tear?

            • jules

              time isn’t the only measure. obviously usage – as I said above – comes into it. he didn’t ride from Sydney to Perth though.

            • Dave

              Hi Il Gregario, which distributor do you work for?

              The ‘purpose’ for which a product must be fit is defined by the customer, not the retailer or distributor. You might not like it, but that’s the way it is in the Australian Consumer Law.

              Wanting to ride a few thousand kilometres is certainly a reasonable purpose for a $200 wheelset, and in that circumstance I would expect the Office of Consumer and Business Affairs to back me up.

            • inopinatus

              Without wanting to give legal advice, I’d say yes, it would be very likely still be covered under Australian consumer law, no matter what excuses are trotted out. The Australian law supersedes all manufacturer/distributor clauses, and is extremely generous towards the consumer. Actually enforcing it can be a drag, however.

        • Neil

          Jules nailed it. Read up on your rights under Australian Consumer Law.

        • Kim

          Careful, people will think you work for the distributor. The warranty document prescibes a maximum weight, not a weight range. If the maximum weight is too much for the product, change it. The price of a product includes a small amount to cover warranty claims. The manafacture describes the wheel as “an entry level wheel with a race-ready soul. The same quality and performance as the rest of the line with advanced characteristics such as an oversized flange and Spoke Dynamic Balance technology.” If it can’t cope with my daily comute to and from work and a few weekend rides and sealed roads and bike paths (that is all it had done at the time) then it certainly isn’t suitable for ‘racing’. My issue isn’t with the manufacturer and wouldn’t stop using their products again. This type of thing happens occasionally. My issue is the the Australian distributor.
          jules, thanks for the reminder regarding fit-for-purpose. Everytime I heard that comment on the Checkout it reminded me of my dud wheel. Must do something about it.

          • Il Gregario

            No the Fulcrum website specifically states a weight range. There is a max and there is a limit. Do your homework next time.


            • Ben Greeve

              Why state a max weight if it means nothing?

            • Kim

              Thank you Mr Gregarius. The link you so kindly posted takes me to Fulcrum’s FAQ page. The answer provided for the question about weight limits is verbatim from the paperwork that comes with the wheels, which I have read several times. So, nothing new there. It clearly states that if you weigh more than 109 kg then do not use this product. If you weigh more than 82 kg then have the wheels inspected more frequently than someone who weighs less than 82 kg. I have never weighed more than 109 kg. The wheels were inspected by a qualified bike mechanic a couple of weeks before the rims fractured. In what universe shiould this product not be covered by warranty at 6 months of age and approx 3500 km ridden. It appears my ability to ‘homework’ is a little better than your ability to read.

              • Dave

                Go to the appropriate regulator in your state/territory. Your shop needs to be slapped around by the long arm of the law.

              • Il Gregario

                Australia doesn’t have a nationally recognised bicycle mechanic accreditation system. What do you mean by “qualified”.
                It’s a $200 wheelset. Quote as many acts as you like, the fact is, you used it, it wore out. Deal with it.

                • Tama

                  Post as much drivel as you like. Fact is law is law. Deal with it.

          • Sean

            We already know he works for one.

      • Dave

        Contact your state/territory business regulator (in SA it’s the Office of Consumer and Business Affairs).

        You have a legal right to a full refund.

    • Neil

      This is absolutely key. Delivery is slower, the price is more expensive, warranty is made phenomenally difficult. For mine, the LBS’s are getting screwed by the distributor far more than the overseas entities.

      • Dave

        I wonder at times whether some shops might be better off purchasing from Wiggle or CRC instead of an anti-competitive distributor for some stuff.

    • Geoff

      At one LBS, I was told that it is often cheaper for them to buy parts from one of the big overseas online retailers (at retail prices) than from the arm of a major component manufacturer in Australia (at wholesale prices). I was told that evidently there is no motivation inside the component manufacturer to improve the prices they provide to retailers in Australia. (Unfortunately I do not have any facts to verify this.)

      • jules

        i’m unsure that the component manufacturer sets the prices for retailers. they deal with a distributor, who on-sells components to retailers. it’s quite possible the manufacturer has influence over the distributor’s pricing policy, but otherwise the price paid by retailers depends on how much fat the distributor wants to put on. prior to internet bike shops, distributors were taking a lot of margin. being generally useless, non-value adding middle-men, it’s taken some of them a long time to realise that trimming the fat they have added to their sales was necessary to compete with online.

  • BetaMax

    The AUD has dropped like 30% over the last two years, so if that hasn’t done it I don’t see what difference raising overseas prices by 10% will make. Better to adapt now than keep slowly ripping the soggy bandaid with GST tinkering. Will just make it more expensive for the everyday cyclist.

  • Sean Doyle

    The real crux of the issue is if the government was a hell of a lot better at not wasting so much money on bad public service practices and bad taxation of big earners and ridiculous handouts to any and everybody (not disparaging the genuine need) then they wouldn’t have to tax so much and we would have better pricing locally and more disposable income to purchase locally. It’s a tangent topic but the country needs a complete phoenix overhaul of the tax system if they really want reform and better cost of living for Australians.

  • Arfy

    Lowering the GST threshold isn’t going to increase the government’s revenue significantly, in fact it’s unlikely to generate any new government revenue. This graphic from the ABC shows that in 2013, GST accounted for $53B in the federal government’s total revenue of $388B, that is 13%.

    The latest (2015/16) federal Budget papers also show that the ATO’s GST compliance program is hardly even paying its way “The measure is estimated to increase revenue by $2.5 billion and expenses by $2.1 billion with a net improvement to the Budget of $445.0 million in fiscal terms over the forward estimates period.” This is likely to become more expensive when the ATO start flying compliance officers around the world chasing GST from companies with $75K turnover – or just $7,500 in GST revenue!! I don’t see how this makes financial sense at all.

    It’s quite clear that lowering the GST threshold is being done to appease the local retail industry dinosaurs and not to benefit Australians.

    • Dave

      Wouldn’t they just email a form to Wiggle?

      • Arfy

        They won’t need to, Wiggle have already stated they intend to comply and to start local warehousing once the changes come in. The issue is that the government’s already stated publicly that the ATO will be sending compliance officers around the world to do this job, but the financial worth of this suggests they’ll only target companies with a turnover large enough to justify the expense, and $7.5K annual revenue won’t justify any effort. Either that or the government’s setting them up to fail, so when they review the ATO’s operations they’ll simply tell them to stop and/or retract the law.

  • chirs

    When its cheaper to Buy Shimano from wiggle than the wholesale price in Aus – I don’t think 10% will make any difference what so ever, We are just being ripped off here,

    • woody

      too many cooks, by the time the product has been through national,, state, local dealers, who all take their cut, it is way more expensive than going direct from a bigger supplier.

    • Dave

      Exactly – people will still be buying from Wiggle instead of uncompetitive bike shops stuck in the 1970s, but they will no longer be evading taxes when they do.

      In a very rare number of cases the difference might be small enough that the benefit of not waiting for it to wing/float across the world outweighs the smaller price difference. But for this to apply to the bike industry will need big changes, it’s not agile enough.

  • Guest

    Rent, Wages and Wholesaler Costs………………………………….

  • Robert

    Interestingly I bought some parts the other day from my LBS. The price was really only a tiny bit more than online and I suspect that is partly that they have old stock bought when the dollar was stronger, so buying in AUD and buying locally is slowly becoming an alternative to buying online, which frankly is a bit of a pain compared to walking to a shop and having a chat to the staff. Australian based business will slowly become more competitive against online as I can’t see our wages increasing much in real terms over the next 10 years, especially in areas like retail. It’s up to the importers/wholesalers to give the retail outlets a realistic price that is competitive. If that can’t be done then I can only see more of the larger companies completely eliminating the wholesaler from the equation – especially as in the case of many (not all) Australian bike part importers where they add little value and have poor service levels.

  • Todd!

    I walked into a bike shop to buy a Kask Mojito last week and knew I was passing by the outlet when I usually shop online for geographical reasons… I knew in my head it was $209… Went to the counter and put the helmet and my card down and was told $236… I paused… Then asked how come it was cheaper online with free shipping? They offered me the discounted price, but went on to say “it’s more expensive due to bricks and mortar, etc…”

    Have your cake and eat it. Set a price and stick to it. It build contempt and I think taking advantage of unassuming passers by is somewhat offensive.

    • jules

      I disagree. it’s appropriate to discount online products. some people want to shop in a real shop. they just need to understand they incur additional costs. I think the shop’s pricing policy there as you described is a fair one.

      • Dave

        I don’t have a problem with this – so long as they are transparent about it on the website.

        If they are using it as bait-and-switch advertising then they need the ACCC or state/territory regulator to make them sweat a bit.

    • CC

      hilarious, please tell me you didn’t accept the discount offer ?

    • Cats eat penguins

      Reminds me of when I bought a nexus 7 tablet from Harvey Norman. I checked the price online and to see if my local store had one in stock and then drove to the store to pick one up. The sales guy gave me a much higher price though so I had to ask him why it was cheaper online and whether I should just go online to buy it or not. He then gave me the lower online price.

      You’ve got to keep your eyes on these guys. Do your research and don’t assume that the retailer is ever going to do you any favours.

      • Dave

        From memory, this sort of thing was ratified as legal because the website does just enough to show the prices apply only to Harvey Norman itself (which only exists online) and not to the stores carrying Harvey Norman branding while being owned by franchisees.

        If it were an independent bike shop that didn’t set up their affairs properly, that sort of position would be a lot more shaky.

        Moral of the story? Be an informed consumer all the time.

    • Scott

      Bike bug always has different prices online vs shop front, very irritating!

  • Cats eat penguins

    So if I am reading this right the big overseas retailers are going to handle all the GST payments?

    Up until now I have never bought anything over $1,000 from overseas due to the paperwork that would have been involved in paying GST through customs. It seems that with this new system I will be able to happily spend over $1,000 with an overseas store without having to deal with the customs hassles.

    Hmmm. Tell me again. How does this help local retailers?

    • Dave

      In many cases the slight levelling of the playing field will narrow the difference enough that some local businesses might be able to compete on non-price aspects. The volume of >1000 purchases made online is far higher than the volume of <1000 purchases.

      I don't expect this to apply to bike equipment much, the local retail industry is too bloated and uncompetitive.

      Oh, and the local retailers will benefit from it because the taxes collected can be spent on fixing the pothole out the front of their shop or improving the school down the road so they get future employees who don't need to count on their fingers.

      • slartiblartfast

        I agree with the need to level the playing field with regard to GST on goods purchased in Australia vs overseas online purchases. The major online retailers will still have advantages of scale with regard to their turnover and range of stock they carry and the efficiency of their distribution networks, so I don’t think they will be too worried about this.

        Most of us would rather buy parts and accessories at the LBS if items are in stock and their prices are competitive with the overseas online retailers. However, I don’t want to pay a hefty premium at the LBS or wait for months to get stuff in when the UK/Ireland based retailers invariably have delivery times of less than a week.

        • jules

          I don’t prefer to buy from my LBS. I enjoy comparing products online, with lots of specs. and info, and taking my time deciding on which product to buy. You can’t do that at an LBS – you usually don’t have the product range to choose from, or the sales guy has decided for you. I find that a thoroughly unenjoyable experience and I’m much happier doing it all in my bedroom and having the parts delivered to me.

          • Dave

            Same here.

            The playing field being levelled won’t change how I buy, but a bike shop becoming competitive sure will.

          • Winky

            Absolutely. The customer experience in the bike shops around here is awful. No range of products, uninformed or biased sales staff (if you can get one to attend to you, that is). Online is more convenient, more pleasant and cheaper.

  • James Hall

    I’d support this if they removed parallel import laws.

    • Dave

      That happened 15 years ago.

      If your local bike shop is telling you otherwise, they are a pack of dirty liars and you shouldn’t be trusting them for anything.

  • OverIt

    Put simply, to me 10% will make bugger all difference shopping online when you’re paying often in the range of 50-70% of AU RRP
    anyway, so if indeed those taxes and put to use effectively, (laughs to self) then it’s fine I guess.

    What irks me no end though is this false concept of a level playing field as P.Bourke mentions. There will never be such a thing in Australia, ( and many other capitalist countries), where we have jobs for fat middlemen doing stuff all other than signing import paperwork and basically organizing mail deliveries, but think as in “Importer or distributor” that I’m a big fish and deserve to earn, 100k+ a year for my hard day’s work while doctor or paramedic gets nowhere near that. We have a job sector which most certainly has misaligned values placed on peoples wages vs. what they do or contribute for society. Sorry, (and it may seem harsh, and with all due respect), but people doing work, from the point of view as to how important it is in society, need to understand that it’s difficult to justify a guy making coffee in a cafe, or repairing bikes, or driving a forklift on the docks lifting containers full of bike parts, making more money than the nurse looking after you in hospital or the daycare worker having the safety and well being of your precious child in their hands.

    I think online sales are part of a leveler here, as it’s bypassing all the middle men and selling the set of cranks that Shimano made,
    for their wholesale costs, + an appropriate amount for shipping and handling via an efficient supply chain.

  • Scott

    What will the complainers do when ChainReaction/Wiggle etc open a warehouse in AU to provide next day delivery on common items.

    • Nathan

      This will be an unintended bonus I think and one that im definately looking forward to. Hopefully they will open a flagship retail store as well.

    • Dave

      It won’t happen.

      The same trademark licensing issues which have recently been reducing the range available to Australian customers on Wiggle/CRC would go into overdrive.

  • Superpilot

    This is fascinating, there is the same discussion in our country. BUT it is very short sighted. VAT/GST is an all or nothing thing. Australia is just getting in ahead of these same rules being applied overseas against Australian exports.

    Australia will enforce this on overseas countries, well don’t you dare complain when those countries enforce their consumption taxes on you.

    Your export sector will scream blue murder, even just at the added red tape they have to jump through to have multiple overseas tax/business numbers, filing overseas GST/VAT returns etc when they have to comply with the GST/VAT rules for all of the countries that they export to. I agree, that will be the cost of doing business, but it wouldn’t have existed without this change.

    Australia is a country that relies on exports, minerals, food, tech. The cost of your exports will go up to those overseas consumers, so your own products will become less competitive. Big picture, that is far worse than a few business owners lobbying and making imported goods slightly more expensive so they feel like they can be more competitive at home.

    The comment on labour, goodness gracious me. The employees may be treated better than some other countries, but even if the cost of the minimum wage is double in Australia to USA, would this guy want to live on Australias minimum wage? I’m not some leftist extremist, but I just want to scream at him that even minimum wages are not livable wages! These guys are complaining that they can’t match on price, and yet they still rely on oppressing wages of the people that work for them to increase their bottom line. It relies on NOT upskilling these people, and NOT lifting them up in society, it relies on the business owners paying minimum costs. In fact these are the very people who are then expected to turn around and buy products from them, with after tax wages, that haven’t even been manufactured in Australia anyway! *facepalm*

    • jules

      if a given country imposes a uniform consumption tax on imports (Australian and other countries’ exports), then there’s little reason to believe it will disadvantage anyone – as the playing field remains level. we do special deals with countries though (Free Trade Agreements) but I don’t understand how they may impact on this issue, if at all.

      • Superpilot

        Yes, across the board all imports in those foreign countries would go up. However, this make them less competitive against the locally sourced products, or products that come from countries with preferable trade agreements, as you have suggested. Add to the fact that you are basically instantly inflating the prices on the consumer, leads to lower demand for those exports, for without a corresponding increase in wages, families have less money to go around.

        • jules

          it doesn’t affect their competitiveness against local products if the consumption tax is also applied to local products, as in Australia. (well, it does relative to when they were exempt) your analysis of buying power impact is too simplistic – they may have less disposable income as a result of extra taxes, but the question is – do they derive better value in increased living standards from the govt spending the increased tax revenue, or from purchasing goods? in Australia at least – the govt desperately needs more tax revenue. do we need more bike parts? (I would never say no..)

          • Shiffon

            I think what Superpilot might be trying to say here Jules is that some of our major exporters may protest other countries imposing the VAT/GST rule upon them to our government, in the same way that some local companies have lobbied for the change in GST to imported goods. I’m not sure what major exporters we have to Canada for one (kangaroos meat?? I dunno!!), but no doubt they would start getting vocal about their lack of competitiveness if they were asked to register for VAT on their Canadian exports purchased by individuals in the same way that we have asked Wiggle to register for GST. But however, that is what free trade means- do unto those as you do to them! The discourse at the moment around the China Free Trade agreement is a good example of how little people understand the definition “free”.
            I agree with you though that the analysis of buying power is much too simplistic. Surely more internal factors – housing prices, borrowing costs, health, education, welfare etc – have much more of an impact on a individual’s living standards than their ability to buy stuff “cheaply” from overseas!

            • jules

              re: Free Trade – VAT/GST may be relevant, but it’s predominantly about import tariffs. Australia is a relatively low tax, low tariff country. many of our trade partners are not that – they impose high tariffs. so the threat of retaliation against Australia imposing GST to imports is mostly pretty hollow, I’d say.

              • Shiffon

                Agreed. Our exporters all probably more in the big business realm anyway, e.g. coal, gas, beef, dairy, not the low end spectrum like small consumer goods that the GST/VAT imposition may impact on. It’s fun thinking about it though, right? ;-)
                I love Wiggle and Book Depository personally and don’t imagine that their, or any other major overseas retailer’s, registration for GST will impact much on our buying habits. Fact is that you can get stuff from them a) cheaper (even with the added 10%) and b) that you can’t even buy in Australia! The thing that will curb the overseas buying is the exchange rate- ouch!

          • Superpilot

            LOL, can never have too many of them!

  • Pat Fogarty

    Putting aside whether this is protectionism by another name, or whether the GST raised would cover the costs of collecting it, this line is clutching at the thinnest of straws: “The benefit is the tax … is the money that’s used to pay for bicycle infrastructure, whether that’s bike paths, lights, etc,” Australian governments spend paltry amounts on cycling infrastructure and programmes (check with your preferred advocacy body for the figure in your state) here in NSW it’s barely $6 per person per year, which is peanuts compared to the per capita spend on roads. Furthermore, most cycling infrastructure is planned and budgeted by Local Government, which means the funds come mainly from local rate-payers. So the chances of the extra 10% you pay ordering a new set of wheels ending up as a new separated cycleway are practically zero.

    On the other hand, if it DID go directly to dedicated funds used exclusively for cycling infrastructure! Imagine how that would change behaviour! Suddenly we wouldn’t have to fight our urge to buy shiny new things. Each add-to-cart would be a selfless sacrifice to make cycling safer for all… “No honey, I’m not selfishly buying myself a new bike… I’m doing it for the kids!”

  • William

    Online v LBS is six of one, half a dozen of the other imo. Yes, I purchase consumable items like chains, cassettes & cables online and give them to my LBS prior to a service. Why ? A few reasons, (a) I want to be sure that good quality parts are used on my bikes without having someone tell me what I should use & spend my money on, and (b) I still use 10 speed (7900 and Red) and last time I serviced my bike they had no 10 speed chains at all in stock. Dura Ace 7900 is also progressively being phased out (according to Shimano, chains have already been discontinued), and finding parts locally is an issue. Some shops also charge outrageous prices for said parts – example, a Dura Ace cassette at Wiggle is A$172, at my local LBS it’s $400. Seriously ?? (yes, I know I could also use Ultegra or 105). My family & I have purchased 8 bikes through our LBS, I don’t think I’m being disloyal by finding parts that I need elsewhere. As far as local online shops go – I’ve had a few issues with a certain online shop in Oz. Ordered groupset parts from said shop (“in stock”, according to website) only to be told there was a 2 or so week wait for my order to be fulfilled. The Americans call this tactic “bait & switch”. If you don’t have the item on hand, don’t advertise it as being “in stock” on your website because it p!sses customers off.

  • Hubbard

    This is ridiculous.

    Keep it simple and reflect on your own purchasing decisions. The first thing most do when buying overseas is to compare the AUD converted price. The basic principle is pretty simple really. The government appears happy to have you think otherwise.

    Importers are not really the rent seekers we make them out to be. I was buying online because the strength of the AUD mate it cheaper to do so. Now that the AUD is weaker, I mostly buy local. 10% is meaningless when the differential was around 30% – sometimes more!

    Pricing is a complex puzzle. Reflect on this from an importers perspective. The local importers needed to keep prices high when the dollar was strong. If they reduced prices, a weakening of the AUD would mean they would be hamstrung when it came time to raise prices to cover costs whilst achieving a reasonable margin. FX fluctuations makes importing a bloody tough game. Sometimes you make more, sometimes you make less, hopefully you make a profit.

    Historically, we been sheltered from overseas competition. The relative rapid marketing change over the past 10-15 years sees the government as ill equipped to deal with it. Their policies refelct this. Probably unbeknown to most retailers, they were largely not concerned about unfair overseas competition. They were concenred about an overvalued AUD and there was little done about this. That said, short of printing money, overvaluation is difficult to manage. Just ask the Swiss. Things will improve from here on now that we have a weaker AUD. The lower GST threshold will make little difference.

    It appears to me that this new lowering of 10% GST threshold has conveniently coincided with a weakening of the AUD. For the government, they will try claim a win from this if they can when in reality, it will be market forces that helps local retailers. Any improvement in retail will not be a result of this policy. Talk to your local retailer and ask them if they feel more competitive in the last 3-6 months. My discussions suggest “yes” and this is with the $1000 GST threshold.

    Just sayin’

  • Rob Booth

    I find this tax threshold debate interesting. Why would the Tax Office need to send officers abroad? Why not just charge GST on the imports when the goods arrive in the country. The majority of the world charges duty and tax in this way, the parcel cannot clear customs until all taxes are paid. And no need to worry about registering foreign vendors over who you have no jurisdiction. The couriers and post office act as your tax collectors. Maybe it’s too simple?

  • Minor edit: it’s Labor, not Labour.


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