Gerry Harvey: it's about GST, not the net

Gerry Harvey: it's about GST, not the net

Summary: Billionaire retailer Gerry Harvey yesterday said that the debate about foreign retailers not being forced to collect GST on some Australian purchases had been misconstrued as a battle between the internet and companies like his own Harvey Norman empire.


Billionaire retailer Gerry Harvey yesterday said that the debate about foreign retailers not being forced to collect GST on some Australian purchases had been misconstrued as a battle between the internet and companies like his own Harvey Norman empire.

Harvey Norman — along with fellow retail giants Angus & Robertson, Borders, David Jones, Just Jeans, Myer and more — published an open letter (PDF) demanding a "fair go" in the retail sector. They said that international retailers had the edge over Australian rivals as the former weren't forced to collect the Goods and Services Tax of 10 per cent on purchases under $1000.

However, Harvey told journalists in Sydney yesterday that the issue had become "confused" and "out of control", particularly as listeners hit talkback radio to complain about Harvey Norman's internet presence — or the lack of it.

"People come on, and they start talking about, 'oh these retailers are out of date, they haven't got internet sites, or they should get on the internet more'," he said. "That's not what we're talking about. We have overseas retailers that do not pay duties, that do not pay GST and we have to compete with them."

"All we're saying, is, we want a level playing field."

At the press event in Sydney's flagship shopping area Pitt St Mall, the executive was flanked by David Jones general manager Helen Karlis and International Fashion Group chief executive David Mendels, who backed Harvey's comments on the GST issue, saying that their companies were willing to compete, but wanted a level playing field to do so.

Yet at least one Australian electronics retailer hasn't appeared concerned about the GST situation. In late December Kogan Technologies chief Ruslan Kogan positioned his Melbourne-based business squarely against Harvey Norman and has been conducting a pricing, public relations and marketing war against the electronics giant. Kogan described the GST efforts as "a scare campaign".

"Some of these big retailers need to spend less time lobbying the government to limit the choice of shoppers, and more time worrying about how they can improve their businesses to offer better value to Australians," wrote Kogan at the time.

Harvey yesterday didn't appear to want to comment about the upstart electronics entrepreneur, who is currently expanding his business into the UK.

"Oh, forget him, I don't even talk about him, come on," said Harvey.

Topics: Hardware, E-Commerce, Government, Government AU, Laptops, Mobility

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  • Is the extra GST added on international purchases under $1000, even a topic of discussion with Harvey Norman?
    Pretty much anything they sell you can find cheaper somewhere else in Australia. I just had a look at a new VAIO I was interested in. Harvey Norman's "Hot Price" is the RRP on the Sony website and at least there I can get free shipping to my house.
    Harvey Norman your losing sale to people who don't want to pay your marked up prices anymore
  • Gerry Harvey
    Just check in your stores how much you are charging for a USB & HDMI cable, a phone in-car charger and all those little electronic components and compare them to what is offered on the net, you will find out that your problem is you are overcharging for those cheap stuff from China and your “NO RETURN POLICY” is a very intransigent and a big PUT OFF factor. You sincerely think that if GST is applied to all online shopping, that will bring a load of customers through your doors? then you badly need a good reality check.
    At the end of the day, you are not competitive and your customer service is not the best.
    If you match price I can get on the net, I am prepared to buy from you with added GST on top + a 14-day return policy. Do that, customers will flow through your doors, until then, put up or shut up.
  • So Gerry if its not about the GST why have you said that it is? If it's not about Internet stores vs B&M retailers, then what is it?
    What they are really talking about is a lot of things and its not the Internet and its not about GST really, that is FUD. These retailers are being squeezed by various things and many are of their own doing. In Australia they have a small market, so have been at the mercy of suppliers for pricing. Even in the depressed US market there is still more people buying flat screen TV's in the US today than buy in Australia, apply that to just about anything the retailers sell. What they have had is a comfort zone to not expand their businesses internationally to create bigger markets and find a volume globally that gives them buying power. Now they want the government to somehow convince an overseas supplier to gather GST on their behalf, or alternatively have it charged to you on entry to Australia, at least that should soak up the last few remaining unemployed to do the additional work of verifying the package contents and then applying GST. Australian companies IMHO are notoriously bad at overseas as they seem to have little grasp of culture and market OS. It requires effort and education and its just easier to bleed the Aussie consumer as they have done without being competitive.
    Why does it cost so much more for a product from these stores one of the reasons, it's advertising. That is why your little PC shop down the road can be more competitive than these bigger organizations, they don't have a multi-million advertising budget to handle. They don't use prime retail frontage as a rule either, how many PC shops have you seen in a Westfield?
    Sorry Gerry but its time Australian retailers got out of their cosy operations and got effective in their businesses.
    Lets not forget that Australians have become more financially savvy in the last two years and have reduced there reliance on credit for their lifestyles. This along with the interest rate hike has driven money out of the retail market to savings and has a been most of the problem.
    It's not anti your business that you have to collect GST and that I don't have to pay it online for OS purchases. I guess you will be wanting to have me pay GST when I return home from holidays with my bag of duty free.
    Aussie retailers have done little to make the customers happy, so like any good customer we are going where we get value and service. Australian business doesn't do good value and if it is the distributors then stop using them and direct import.
    Barnes and Noble made a similar argument years ago when Amazon started after first ignoring them. Something like that they didn't have to do something because amazon was online. Then they got online and competed.
  • Thankyou Gerry, I have been struggling with motivation to finish a website I have been working on to sell US products under affiliation programs in Australia. Now that you have made it so public that there are massive savings in buying online from the US I find myself very motivated.
    As for your statement about even playing fields and that no tax is paid on items purchased from over seas markets, tax is paid, to the country it is purchased from.
    I believe that was made possible through the free trade agreement.
    An even playing field will not be generated through taxing these items as consumers will then be paying retail taxes in both countries.
    What you Gerry, and your billionaire buddies need to push for is an even playing field with your purchasing price. You need to find out why it is that Australian companies wholesale buy prices without shipping from the likes of the US are higher than retail prices are in the US. That is the real problem and you should be pushing our government to ask the US to explain why.
    US retailers are now charging more than double the shipping on items sold to consumers in Australia, they know that even with that extra cost they are still around half the cost of what it sells for here.
    You need to find a way to be competitive with the prices overseas and if you embraced the internet and bought for similar prices that they do you would be.
    Asking our government to help you raise these prices is ripping us off, and we all know that.
    It is also not as easy as you seem to think to apply duties and taxes to items under $1000, the cost of doing so from what I understand has been said to be higher than what the return would be. If so you are then asking the tax payer to foot the bill for you to be able to make your normal profits.
    As for loss of employment, it is actually a shift in employment as the courier industry will require a huge amount of growth. All these goods purchased online are delivered individually to each consumers household, creating what I would estimate to be an equivalent amount of employment.
    Also you can afford to reduce your prices by at least 10%, just return your rebate on sold items back to 5% from 15%. It shouldn't effect you to much as you did the reverse to this 2 months before the GST was established. We all know your prices didn't drop when the GST came in, now everyone knows how you done it. So maybe you should look at giving back what you took from us.
  • I buy from places that provide good service at reasonable prices. These include both physical and online stores. Of the online stores, I buy from both Australian and overseas companies.
    I don't buy from Gerry Harvey's stores because they are over priced, over hyped, rip off merchants that have very poor customer service. Many of the other 'retail giants' involved in this 'open letter' are in the same boat.
    If they want a level playing field, then let them get on board, and offer at least comparable service and price to us - the customer - or let them flounder. That's free market for them - a principle they espouse, but cry to the Government for protection when their profits nose dive.
  • Gerry Harvey can shove his overpriced capitalistic attitude and his rip off stores, which I believe he sublets the departments, where the sun don't shine. I would not buy from a sod like him if it meant I would starve.
  • "We expect continued market share losses in consumer electronics to online retailers and lower-priced big-box competitors, and entertainment software.

    The analyst said that the company's "offering the widest selection of goods at premium price points is undermined by value-focused comparison shopping."

    It posted weaker-than-expected sales across several categories, including TVs, computers, and video games. Overall, it saw comparable store sales decline compared to the previous year.

    But the pressures it faces are worrisome. Most products the company sells can be purchased online for less. Even the company's brick-and-mortar competitors, is besting it on price in some cases. And until it finds a solution, market share erosion could be something it will continue to deal with going forward."

    These are from a news report posted yesterday about Best Buy (USA). I imagine you could use those same lines in a report on Harvey Norman? With GST or without GST on online sales, that old business model is dated has lost its capacity for growth Mr Harvey.
  • In mid-December, before Bernie, Sol and Gerry started their campaign, we bought a $400 household item from Harvey Norman. Well, we thought we did, but when we went to the pickup dock we were (only then) told they had none, and were offered an obviously worn one off the floor at the same price.

    We said we would wait for a new one, and have just been told it will be the end of January before we can expect it. So tell us again, Gerry & Co, why we should put up with poor service and much higher prices through buying locally to support you lot?
  • Seriously, who cares about the GST? We well pay it if we need to. When I buy tech online I am saving somewhere between 30% and 70% of the Oz retail price every time. The GST is too insignificant to change that fact, Gerry. Do your homework.
  • It is NOT about GST! The items that I purchase from overseas are usually cheap "disposable", i.e., if they don't work it's cheaper to replace them than to chase warranties. Average "AA" rechargeable batteries in Australian shops work out at about $5 each. With or without GST, I can buy them delivered to my front door for about $1 each.

    Gerry, you're barking up your own tree and none of us cares.

    The Americans destroyed their own industries and then tried to blame it on consumers. It didn't work there and it won't work here either.
  • A bit rich! loss of jobs! where were you Gerry when the manufacturing jobs went offshore!
    Blank Look
  • I can't believe that the internet shoppers can't see the problem- it is simple, trade union demands have priced us out of the market. Australian companies have to pay higher wages, superannuation, holiday pay and loading, overtime for ridiculous holidays such as New Years Day last monday (even though it occurred two days earlier) sick pay, skyrocketing electricity bills, rent, insurance policies pushed through the roof by greedy lawyers and litigious customers ('' Oh dear, I slipped over and I'm going to sue you for whatever I can screw out of you''). Of course you can buy it cheaper on line! They don't have to pay these costs - I forgot overtime and payroll tax and all the things you spiteful, shortsighted internet shoppers no doubt claim as your rights from your poor bloody employers. Unless all young people can be pilots, brain surgeons and nuclear physicists, your shortsightedness will see them with no jobs in retailing in the years to come, if you try to run Gerry Harvey and his ilk out of town. I'll bet that if you have a job ,you held out your hand for penalty rates if you worked over the holidays . Who do you think has to pay for you to live in this country , where the standard of living is so high that we are the envy of the sort of places you are now buying from? You are shortsighted and greedy and I'm disgusted at the spite and bile you are spitting out. I do not own a business, never have, but I feel sorry for Australians who are trying to trade on a playing field that is a long way from being level!
  • You talk about the struggling renters, skyrocketing electricity bills, insurance policies and then when those people finally find a way to save a few dollars, you go into bat for a multi-billionaire...

  • I don't mind paying for all the 'overheads' of these companies, I don't mind paying extra to have it delivered to my door, I don't mind paying extra for warranties, I don't mind paying extra for person to person service. What I do mind paying extra for is staff who have no idea what they are selling. I go into a store with a question and I have to speak to the manager of a section to get an answer. Train your staff!!!!! Teach them customer service, not sales. Make your warranties usable. I will 100/100 times got to a store where I know I can get good service even if it means I pay alot more for my items. When I am shopping about for prices which I do for all my purchases, I want service, answers, a personable sales person. I have walked into stores where I have left 30 mins later because I could not find a sales person who could help, including Harvey Norman. If I am not getting the service in a store, I will jump online and get my items for up to 70% off. The other reason I shop online and overseas a lot, is because no one in Australia stocks what I am looking for. So, what choice do I have? Get it from someone who has it or go without, guess what I am going to do.
  • Actually, I would buy from Harvey Norman, if he would sell what I was looking for. Most recent case in point: A Firewire 800 cable. But no, they don't sell any firewire gear, and they try to convince me that USB is faster. (which might be related to them only selling USB, but that's me being cynical) I ended up ordering it from an online Aussie dealer, and got it delivered next day. Gerry, (and others) if you stock a better range, we might come back.

    Bookstores, you might as well close now. Your marketing model is so bad that I don't see any hope for it.
  • It is about GST, to the extent of how can the government possibly enforce this on overseas retailers? They'd have to set up to collect it from the customer via Customs, and I can see that making a loss. The other suggestion, that of exempting Aussie stores from GST for items under $1000? You might as well repeal the GST, as most items sold will be under that. Think what you spend money on, week to week, groceries, etc. Yes, I'm sure the Federal government's going to do that. :^) And the State governments, whose approval is needed for changes to the GST.
  • If any retailer can explain how I can buy the same Panasonic electric shaver in Target USA (normal price, not on sale) for $149, and it costs $350 here in Australia, I am happy to listen.

    Personally, I think a government investigation would be GREAT, as it could pinpoint which part of the supply chain is making megabucks from Australian consumers. I don't necessarily blame the retailers themselves, but SOMEONE is pocketing $200 on each electric shaver sold!