Retailers slam Australia Post for ‘aiding the avoidance of GST’

THE peak retail body representing Australia’s biggest retailers has come out swinging against Australia Post.

THE peak retail body representing Australia’s biggest and most powerful retailers, such as Coles, Woolworths, David Jones and Bunnings, has come out swinging against Australia Post’s new freight forwarding service, which some claim helps consumers avoid GST and customs duties on online purchases.

The launch of ShopMate by Australia Post last month has re­ignited the bitter debate over the $1000 GST-free threshold on goods bought from overseas, and opened a schism between bricks and mortar retailers and the new vanguard of online players as both grasp for every consumer dollar they can get in a lacklustre domestic economy.

Although the debate over the future of the GST-free threshold has been smouldering for years — with many local retailers fuming over the advantage given to offshore websites that can ship goods to Australia GST-free and duty free if valued under $1000 — the complaints from the Australian retail community have intensified following the launch of ShopMate and prolonged inaction from the federal government.

Unveiled in late November, ShopMate is a freight-forwarding service that allows Australian shoppers to have online purchases made on US websites shipped to an American address and then rerouted to their Australian home. It gets around the problem that many US sites which only ship goods to US addresses and uses the trusted and reliable Australia Post parcel delivery network.

But Australia’s traditional bricks and mortar retailers are seeing red. They claim the service encourages consumers to shop on US sites and bring in goods GST-free and duty free — giving an unfair advantage to offshore retailers.

Anna McPhee, the chief executive of the Australian National Retailers Association, told The Australian ShopMate was particularly disappointing, given the failure to address the GST-free threshold and the fact that Australia Post was a government entity. “Despite agreement to the principle, the government has not moved on lowering the GST low- value threshold for goods bought internationally online, foregoing potential tax revenue of around $1 billion last year, and in the meantime … Australia Post is inviting further tax revenue loss,’’ Ms McPhee said.

ANRA is one of the country’s most powerful retail lobby groups.

It is chaired by Woolworths chief executive Grant O’Brien and its directors include Coles managing director John Durkan, Bunnings boss John Gillam and Ian Nairn, the chief executive of David Jones.

Retail billionaire Gerry Harvey, whose wife, Harvey Norman boss Katie Page, is also on the ANRA board, has accused Australia Post of “aiding and abetting” the avoidance of GST.

Earlier this month Solomon Lew, whose retail empire includes the Just Group, also savaged the government for allowing Australia Post to launch ShopMate at a time when tax revenue was needed to address a widening budget deficit.

“That a government-owned enterprise would develop a program which effectively facilitates forgone tax revenue to its owner, the government, is almost incomprehensible to me, but it is a direct consequence of this public policy failure,” Mr Lew told shareholders at the AGM of his Premier Investments vehicle earlier this month.

Myer chairman Paul McClintock and CEO Bernie Brookes have made similar criticisms.

Australia Post has defended the shopping tool, arguing it is just responding to the changing needs of its customers and that it wasn’t about the avoidance of GST but rather the inability of some overseas retailers to deliver what Australian shoppers want to buy.

Paul Greenberg, the executive chairman of the National Online Retailers Association whose foundation partners include Australia Post, said Australia Post had made a “clever” decision’’ to open the world to Australian consumers.

“This is a global shopping world that we live in … and consumers need to shop the way they want.”