Retailers continue to lobby for reduction in low-value threshold to combat offshore, online sales

A review of taxes imposed on retailers and a reduction in the low-value import threshold from $1,000 to $100 are just some of the proposals included in the Australian National Retailer’s Association submission to the Productivity Commission inquiry on the retail industry.

The submission also calls for an immediate reduction on duty for clothing products, along with a new minister for retail to advise the Government on how to better serve retailers.

“As one of Australia’s largest sectors and biggest employers, it is critical that the findings of this inquiry put the sector firmly on the path to prosperity and deliver the opportunity for retailers to maximise their potential into the future,” the submission states.

The ANRA recommends several points of action for the Government to work on, including:

• A new trading hours scheme, with the association arguing retailers “should be allowed to open whenever they choose”, except for Christmas Day, Boxing Day and the morning of Anzac Day.
• The removal of customs duty from all consumer goods imported in to Australia.
• Customs duty on textiles and clothing dropped to 5% as of January 2012 and eliminated by 2015.
• The removal of parallel importing restrictions.
• A hold-off on minimum wage increases while the retail industry is experiencing soft growth.

“There are many areas of regulation that need attention to maximise the opportunity from increased use of technology and ensure Australian retailers face a level playing field when competing in the global retail market,” it says.

The comments come as the Productivity Commission is beginning to wind up its submissions process. Not all submissions are available online yet.

While many of the submissions are from retail groups disgruntled with the current shift to online retail, some – such as the comments made by consumer group Choice – argue shoppers are simply reacting to retailers marking up prices unnecessarily.

But in the ANRA submission, chief executive Margy Osmond argues retailers are charged unnecessary taxes and only increase prices because of the burdens placed upon them by Government requirements.

“The surge in offshore online retailing means the tariff system is in reality providing no protection for local manufacturers and is harming local retailers.”

It also argues limitations such as parallel book importation restrictions mean retailers are punished and forced to raise prices, while many overseas shops have access to cheaper wholesalers.

“We are arguing for a stronger voice for a sector that is often overlooked, but which will still be here when the mining boom is behind us,” Osmond says.

While many submissions are from industry giants such as the Australian Retailers Association, (which argues for the low value threshold to be eliminated), and Aldi’s, (which says restrictive zoning processes are to blame for some higher prices), many are from smaller businesses.

The Star Audio Visual Association wrote the industry needs a level playing field, and argued for the elimination of the low value threshold, while Photo Imaging Council of Australia argues that GST should be applied on all retailers.

The Shop, Distributive and Allied Employees’ Association, the largest of its type in the country, argues that “the Government should impose a GST on all overseas purchases”.

But a recent submission from consumer group Choice argues retailers need to take the bad with the good.

“It appears that Australian retailers are not passing on to consumers (or not passing on in a timely manner) an adequate amount of the savings associated with an appreciating Australian dollar.”

It references a study from the Australia Institute which found businesses are marking up products beyond what most Australians consider reasonable, thus pushing them to cheaper, online solutions.

“Choice believes the exemption from GST for goods costing less than $1,000 imported by individuals does not make a significant difference to Australian consumers looking to buy products from overseas.”

“The savings that are available far exceed the added cost if a GST were imposed, and consumers are attracted by the greater range of products available outside Australia.”