But the ads have sparked anger from consumer group Choice and been given short shrift by Assistant Treasurer Bill Shorten, who said the federal government would not be rushed into making changes to the tax system because of pressure from companies. 'Goliath pretending he's David' And independent Senator Nick Xenophon said any GST exemption should only be offered to small businesses. ‘‘It’s extraordinary to hear Myer, David Jones, Harvey Norman and Target all claiming they want a level playing field when ... the extraordinary market power of these very businesses has put enormous pressure on the small business sector,’’ Senator Xenophon said. ‘‘It’s like watching Goliath pretend he’s David.’’ Choice described the campaign as an ‘‘alarmist red herring’’ that was being driven by bigger, self-interested retailers who were trying to hijack the debate on the GST.

“The big chains should recognise that it's their high prices, limited range and poor customer service that increasingly encourages people to use the internet,” Choice’s Christopher Zinn said. “Consumers are simply chasing the best deal and the best service and often these days that is found online... This is not about GST. Major stores are not being forced by anyone to charge these high prices. This debate is about quality of service, competitive pricing and the inability of some retailers to understand the future of internet shopping.” The campaign also sparked a deluge of comments by readers of this article, with the vast majority highly critical of the retailers, accusing them of overcharging for their goods. The big chains should recognise that it's their high prices, limited range and poor customer service that increasingly encourages people to use the internet. "If Australian retailers priced their goods more competitively Australian consumers wouldn't be tempted to shop overseas online," Ed Cook from Melbourne wrote. "Parity with the USD has highlighted the extortionate prices we are charged here."

Many comments pointed out that adding 10 per cent GST to the price of goods bought overseas would hardly deter local buyers as most products would still be much cheaper than in local retail shops. Mr Shorten said factors including the high Australian dollar, the continuing effects of the global financial crisis and belt-tightening across the nation were having more of an impact on retailers’ bottom lines than the GST. “We respect the fact that large retailers like Gerry Harvey and Myer have ongoing concerns, but the ANRA (Australian National Retailers Association) – their own industry body – supports the government’s approach. We will not be stampeded into making rash decisions because of a vocal minority, especially when the majority of the sector and consumer groups like Choice support our sensible, measured approach.” 'Enormous competitive advantage' The ads claim foreign web-based retailers are at an ‘‘enormous competitive advantage. These businesses don't pay our taxes, employ our people, train our young people or contribute to our economy...

"We agree with our customers that online retailing is a wonderful convenience that is here to stay," the advertisement reads. "We also agree that fair competition is good for our customers and we want to be able to offer them the same Australian tax exemptions that offshore retailers enjoy." The move follows complaints from retail heavyweights including Harvey Norman boss Gerry Harvey, as well as suggestions from Myer boss Bernie Brookes that the department store could set up a Chinese distribution centre for online purchases. And it comes as a surging Australian dollar makes online purchases from international sites an attractive option. Threat to jobs Mr Brookes said in a press conference today that online shopping could threaten jobs in the local retail sector, which employed 15 per cent of the population.

''That’s a lot of people, that’s a lot of jobs and what’s happening is we’re providing free kicks to overseas retailers and overseas websites.’’ The ads also warn that without action, the nation "will see a reduction in hours and shifts for casual and part-time workers, and ultimately cost Australians jobs in retail, manufacturing, logistics and related services". Mr Brookes also disputed claims that collecting GST on online purchases below $1000 would be too complicated. "We collect GST for the government ... it’s quite easy for that to be collected", he said. "It’s not too hard; it’s $2 billion in income that would pay for a lot of schools, better education and more importantly to pay for a lot of new healthcare as well.’’ He reiterated his company's plans to take on online marketing by setting up a website to sell goods tax-free out of China.

"By the end of February our website will move ... and we’ll be providing products direct out of Hong Kong, using China Post and Australia Post, to our customers who will also get it GST-free and duty-free. It’s unfortunate, but if you can’t beat them, you have to join them.’’ Retail sales sluggish Official retail sales data for October showed a drop of 1.1 per cent, a figure that shocked experts who had been predicting sales would rise 0.4 per cent. But Mr Shorten said only a fraction of Australian retail purchases were online - about 3 per cent - and between one-fifth and one-half of those were from overseas sites.The government has announced a Productivity Commission inquiry into the future of the nation’s retail sector. Loading

“The Productivity Commission will commence work in early 2011 and report back to government within nine months, and we have made it clear that sustainability and appropriateness of the current tax settings will be considered, so any suggestion otherwise by retailers is unfounded,” Mr Shorten said. BusinessDay, with Cameron Atfield, Brisbane Times

