Posted by John, January 6th, 2011 - under Retailers, Tax, Tax policy, Tax the rich.

Tags: Gerry Harvey, Goods and Services Tax, GST, Harvey Norman

Rich retailers like Gerry Harvey are running a campaign to get the Labor Government to impose tax on goods we buy from overseas over the net.

Isn’t it funny that the low tax brigade want more tax when it suits them? The free marketeers don’t like the free market when it cuts into their profits.

The Global Financial Crisis has put a brake on working class spending in Australia. That, and the massive increase in the share of the national cake going to profit at the expense of labour, the longest unpaid working hours in the Western world and increasing interest rates.

Workers have begun buying more and more goods over the net from offshore. The strength of the Australian dollar makes this cheaper than in the past.

Goods imported from overseas for less than $1000 aren’t subject to Goods and Service Tax or customs duty. (For international readers the GST is Australia’s equivalent of a regressive value added tax or consumption tax).

The retailers want the GST to be imposed on imported goods worth $400 or more.

These retail giants are rent seekers who in the past have benefited from Australia’s isolation. The net is breaking down that consumer isolation.

So the big Australian retailers, who buy most of their goods offshore in bulk and pay much less in effective transport cost than individual purchasers, can’t compete with someone like me sitting at my computer buying goods from the US or Europe and paying their taxes and the transport costs on top of the purchase price?

Maybe the retailers should cut their prices. Oh, but that would cut their profits. So they want to use the tax system to protect their profits.

Their push if successful would result in us paying more tax to prop up their profits. I have a novel suggestion. Tax them, not us.

Now the main mouthpiece for the rich retailers, Gerry Harvey, has begun sprouting nationalism. It is ‘unAustraian’ to buy online. Apart from the hypocrisy – where does his store Harvey Norman buy most of its stock from? – his argument is nationalist claptrap designed not to protect Australian jobs but to protect his profits.

Harvey doesn’t give a toss about our jobs or our living standards. Least of all does he care about his own workforce.The big retailers don’t employ enough staff to service customers adequately. They pay those they do employ a pittance. Retail workers – overwhelmingly women – are among the lowest paid group in Australia.

But to employ more staff and to pay them more would eat in the precious profits of the retailers.

And of course if we can buy retail goods more cheaply offshore that leaves us with more money to spend and boost the economy.

This is a preemptive strike by retailers to both excuse their unprofitable Christmas season and to stop the trend of online shopping growing. While at the moment only 3 percent of purchases are made online (and half of them are of Australian goods) the retailers’ campaign is likely to increase that figure as they let more and more of us know of the value of online shopping.

The GST is a regressive tax. It takes more out of the income of average workers than it does out of the earnings of the rich like Gerry Harvey.

It is about taxing us more to pay for tax cuts for them. Instead of increasing GST on some goods, we should abolish it and tax the rich to make up for the shortfall. Shift the tax burden on to those who can afford it.

Gerry Harvey and the other retailers are very very wealthy because of us. Instead of increasing taxes on working people the time has come to tax the rich more.