Editorial: Gerry Harvey Wants Tax on Overseas Online Goods

Harvey Norman’s Chief Executive, Gerry Harvey believes a taxing online goods purchased offshore will quell local consumer’s desires for international products. While the Federal Government needs address the issue, a GST isn’t the answer.

The man who famously claimed that online shopping was a dead-end and would not make any money for entrepreneurs, is now so concerned about money being spent by Australian consumers on  overseas online retailers, that he is demanding the Federal Government quell the international online uprising by slapping a tax on it.

Gerry Harvey, Chief Executive of big box retailer Harvey Norman, is calling for the Federal Government to put a goods and services tax on products purchased from overseas online retailers.

Harvey believes local retailers are at an “unfair disadvantage, competing against goods from overseas. Local retailers selling women’s clothing, handbags and shoes, as examples, had difficulties in competing against foreign online stores,” he said.  “This is a huge problem.  If you are in retail, selling those sort of goods, you are severely disadvantaged.”

As the laws currently stand, Australians can buy from international sites and not pay any duty on items under $1000 and Harvey claims that the politicians he has spoken with feel it’s “too hard” to instigate this tax.

While Harvey is right about one thing – the Federal Government needs to address the problem and take notice of the dollars being lost to offshore online shopping – incurring a tax on international goods purchased from these sites won’t solve the problem if local retailers can’t match the user experience of these international websites.

A recent survey of Australian online consumers indicated that the main reason they shopped from international online stores was to buy goods not available locally, while only a small percentage said it was because these sites were cheaper – clearly adding a GST will not deter the majority of online consumers from buying offshore.

Rather, Harvey and his peers should be insisting the government take a deeper look at the Australian online retail landscape and start injecting money into the industry. Put together a governing body.  Develop industry guidelines and standards.  Educate retailers and grow online retail in Australia in an aggressive manner to give local retailers staying power and a real, competitive presence in the global online arena. Look to how domestic online retailers can capture not only local consumers but international consumers too. It’s been said before and I will say it again, retailers need to be aware that their competition is no longer the shop next door – teach our local retailers to start thinking globally!

It must be pointed out that when Harvey initially declared online shopping was a dead end, he also claimed he wouldn’t spend another cent on his own retail business’ e-commerce interests.  Somewhere along the way, Harvey has had to eat his words.

How many more problems would the Australian online retail trade have now if Harvey’s past sentiments had found their way into mainstream industry thinking?  There was no reason to listen to Harvey then, and there is no reason to listen to him now. Quite simply, the issue at hand is bigger than Harvey’s current understanding of it and won’t be solved with a tax.


6 thoughts on “Editorial: Gerry Harvey Wants Tax on Overseas Online Goods”

  1. Gerry Harvey. #fail

    Instead of building an online business that left the door open to the likes of Kogan, Gerry went off to build a retail empire in… Slovenia, Northern Ireland and Malaysia.

    Time will tell whether Harvey Norman goes the way of Clive Peeters, but it’s increasingly looking like Mr Harvey’s success is the result of luck and the ‘business boys club’ rather than true business acumen.

    Rather than bitch about it Gerry, why don’t you get on board and invest some coin in a decent e-commerce experience for your – I would expect – extensive customer database. Or is that too complicated? It’s e-e-easy. give it a try.

  2. Wake up Gerry says:

    Gerry seems to be going senile and thats a worry for his shareholders. Consider this:

    – he implies that the difference between International prices and local prices is the GST, because if its not then adding GST to imported goods wont make consumers change their mind.

    – hes a bit smarter than that ( although from his statement you would have to check) and he will know that the difference in pricing is much more than 10% (can be 30% or more), so why doesnt he drop his prices by 20% and then he can be price competitive.

    – He’s also telling you that consumers arent valuing the ‘service’ that he sells and that is a real worry and threat to his business model, which leads me to consider the the self interest in his statement.

    – He also says that he doesnt make any money from selling flat screen TV’s. Is that because of price competition? and if so, why not seek a Gerry tax of 10% on all OTHER retailers of TV’s. I dont think anyone is buying those over the internet from overseas.

    His is a deflective non -argument.

    Come on Gerry , be honest, run a real agrument, you expect it of others.

  3. Phil Leahy says:

    Australian retailers need to put some budget aside and start investing in online and learning; instead of burying their heads in the sand. Now the Australian dollar is strong, the ARA and Harvey are calling for protectionism.

    Bricks and mortar retailers need to have a better presence online, understand the space better, and look to other markets to export like the Americans are doing, because the dollar’s not going to be high forever.

    Free Trade
    The ARA & Harvey want to prevent free trade and promote protectionism of Australian retailers via taxation. Wake up. If you want Australian retailers to be competitive then encourage them to go online and compete globally.

    Heads in the sand
    I have witnessed the ARA over the last eight or so years pumping out press releases warning consumers about the dangers of buying online as a mechanism of trying to stem the flow of online sales – instead of actively pushing members to embrace the space.

    Tax Reform
    There are some opportunities for tax reform that does not involve lifting the $1000 tax-free threshold and taxing Australian consumers. If the government is looking to increase revenues then it needs to look at GST on the fees of giants like Google. Currently Australian companies advertising on Google do not pay GST. If you want a serious debate about online tax reform then that is where the debate should start.

  4. Outlaw says:

    $22Million of us. $6 Billion of them. Maybe Gerry should take the challenge and target that market? I know I am 🙂

  5. steve hay says:

    hi the problem is not that you can get stuff online cheeper, but why. how is it posible to get items cheeper in the uk,usa and other developed places, even if you pay 10% on top. very greedy gerry shame on you!

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