Support for a united Australian National Retailers Association (ANRA) campaign against the $1,000 GST-free threshold on international purchases has hit a hurdle after supermarket giants Coles and Woolworths appear to have withdrawn their support.
The grocery powerhouses have stated that Australian consumers are already facing rising living costs and adding GST to international purchases under $1,000 would only add to the burden.
BRW reported that Coles’ Ian McLeod told a retailers’ luncheon: “It should be a free market, we should allow competition to prevail”. He added he was against “restrictions, barriers or tariffs”.
At the same function, Woolworths’ Tjeerd Jegen said Australian retailers should “compete with a compelling offer” instead.
“In a time where customers are doing it tough, I don’t think retailers should ask for higher taxes,” he said.
Initially, the ANRA had rallied together big players, such as the grocery duo as well as Bunnings, Super Retail Group, Luxottica, Forty Winks and Harvey Norman, who’s executive chairman Gerry Harvey often has been heard complaining that the threshold is affecting business.
The association had put forward an argument to the Federal Government that the threshold on GST-free imported goods should be reduced from $1,000 to $20.
Without the backing of Coles and Woolworths – who are not really affected by the GST-free threshold – the ANRA’s position is still set to suffer.
What can jewellers expect?
Colin Pocklington, managing director of Australia’s largest buying group, Nationwide Jewellers, told Jeweller he didn’t expect the current government to make any changes to GST legislation.
Pocklington represents more than 400 members and he believes that if the Coalition was elected in September, the party would review all aspects of the GST.
“My guess is that they will extend it [GST] to food and probably lift the rate to 12.5 per cent.
“I don’t see this is a major issue for our industry,” he said, suggesting that the volume of online jewellery purchases from overseas was nowhere near as great as those for consumer electronics, books, perfume and the like.
“The bigger issue is the strong US dollar. The Australian dollar has weakened by 11-12 per cent in the last two months. Other currencies have dropped by lesser amounts.
“So, higher prices on imported goods will start to flow through, and for consumers, buying goods from overseas will be more expensive,” he said.