In a few days time, if it passes into law or not, we will pay GST on any goods we order that come from overseas.
Apparently this will be a big boost to our local retail sector. Unfortunately my prediction is that it will not be anywhere near as big a boost as they are hoping for.
For decades we have all had to pay the Australia Tax. This is the massive differences in price to, say, a notebook for sale in the US and the price the exact same notebook sells for here. You can find even worse examples in everyday painkillers (we pay around $8 for 24 ibuprofen tablets and in the US you pay $10-15 for 500 tablets!
Other examples are DVDs, CDs, books, food…. basically anything.
And when the companies that sell these products at vastly different prices are asked why, the excuse they always offer is the distance to Australia and our smaller market.
So either the suppliers are making a fortune because no-one in Australia has the guts to ask the tough questions or our local retailers are terrible at negotiating.
Maybe a bit of both. Personally I am staggered by the number of people here who will pay nearly double for the latest smartphone or Apple product, as they sell for in the US. Go ahead, check it for yourself.
So, my prediction is that on the 1st of July the people of Australia will have finally had enough of governments introducing new taxes seemingly every week. (A sugar tax? What a laugh. Apparently we can’t be relied on to make our own decision on what we should drink, so of course we need a tax to help us out. To paraphrase The Beatles, they’ll be taxing air next).
We will have had enough, finally, and we will revolt. Personally those items I purchased from overseas – because of this thing that is meant to be free, called the internet – I simply will not buy again.
Why not? Because every time I go to do so online there will be a stark reminder in my shopping cart, GST of 10%. I will get angry and log out.
And I will not buy it locally because unfortunately local retailers, big and small, are lacking when it comes to understanding buying on the internet. Ask them what a Google rating is and they will ask what movie are you referring to. Seriously, key into Mr Google the item you want to buy and stipulate Australia. The first items listed will be Ads for overseas sites, followed by some articles or reviews (from overseas of course) followed by something completely unrelated. Unless you include a store name in your search you will not even get close.
So until the local retailers discover Google search, it will make me so angry trying to find the item I want that I’ll end up not wanting it anymore. Shopping online should be easy and fun, and only a dozen or so Aussie retailers get it.
So, our local retailers will see a much smaller increase in online sales than they hoped for. My prediction is that less than 50% of what was spent overseas up until June 30 this year, will be spent locally in the next financial year.
If I see a news article stating how local retail has boomed I will know it is false, and was probably influenced by government press releases. How do I know this? Because every year, about two weeks before Christmas, every news outlet predicts the biggest spending Christmas ever of $X billion dollars. Then in February or March, on page 27, will be a small article saying the figures are in and it was actually a very disappointing Christmas for retailers. It happens every single year, like clockwork.
I am especially a fan of TV newsreaders proclaiming that in the last weekend before Christmas shoppers went crazy and spent $X billion dollars. Hello? How could you know that? Did you ring every shop in the State and ask them for their sales figures? No? Would the shops even know what their figures were for those two days, and get them to you within just 24 hours so you can run your news item? Somehow I doubt it.
Wet your finger and proudly hold it up high. There, now you have as much chance as getting your prediction right as 80% of our so-called economic ‘experts’.
As Steve Jobs said on many occasions, do not listen to anyone who says they are an ‘expert’ or worse, a ‘guru’, because no-one is, it’s impossible.
So buy big and buy now, the clock is ticking. At least this is one tax you can choose not to pay. And just think of all the money you will save!