Online Tax

[rob]

as this thread plummets in to the depths of all the various aspects of local versa OS purchases of goods it it probably worth stepping back and keeping it simple.
This thread started out about calls to establish GST payments on consumer imported goods below $1,000. I think it is fair to say that the only reason that sub $1,000 purchases are GST exempt is because it simply isn't cost effective for the government to collect this tax. The $1,000 mark is an arbitrary line in the sand, it could be more and i'm sure once it used to be less ( $500 ).
For a local retailer this exemption instantly puts them 10% behind being able to compete. So your $999 OS price is already $1099 in an Australian store and the consumer dude is going ... hey I can save a hundred bucks!
If it was a level playing field then all the other relevent discussion points come into play.
I can also assure you that what sweetwater pays for a US produced widget is often quite a bit less than what an Australian Distributer pays. If that Australian distributer than sells through a retailer so you can walk into a store and fiddle around with the actual unit while weighing up the purchase then there is another layer of margins to be accounted for. Going back a couple of steps some manufacturers also have another layer between themselves and the Australian distributer ... the regional ( australasian agent ) for example. They make it almost impossible to compete and by and large don't give a f@#$ because the Australian market is a drop in ocean of their sales.
Its a complex problem that won't magically go away.
I dread the day when I can't walk into a store, have a chat with someone about a product, look at it, play with it, get some questions anwered that can't be reliably found on the interweb and as I walk out the door the sales dude says "any problems let us know".
I cheerfully pay for service and to support the local team.

[astrovic]

It can't happen... Customs is already swamped with collecting duty on postal items over $1000.00, they don't have the capacity to deal with much more. What is the cutoff value then? $800.00? $500.00? $100.00? At $500.00 the number of extra processing staff that customs would need would be huge. What happens at Christmas time? Grandma in NZ sends a gift to Granddaughter in Australia. Currently to import an item over $1000.00 by post, if you want to self-import rather than using a broker you have to fill out 2 customs forms, one for the goods, including looking up the correct category, and one to register yourself as an importer, and one to register the sender as an exporter (who you sign for on their behalf). Then you pay a $48.00 processing fee and duty and GST. If this was brought down to goods worth $100.00, it would cost you nearly as much to import as the goods are worth. No Christmas gifts from Grandma then.

That's spot on, and exactly what Customs is saying. The $1,000 threshold isn't going anywhere, no matter how much the retailers bleat.

[ChrisW]

Just for the record - -
I wouldn't complain at an extra 10%. I'm certainly not against GST as a whole.
I just found it a bit annoying that when the Aussie musician finds they get a little break due to the strong $AUD, someone somewhere tries to pull the rug out from under them.
And I also regularly find the price differential is way above 10 - 20%, even on small, light items like music software.

I'm used to the 17.5% VAT of the UK (now 20%).
But I still found many music related items cheaper in the UK than Australia, and the paperwork for importing much, much less.

I guess it comes down to the smaller market and less competition in Australia.

[lonearranger]

Just saw this story - interesting approach to the GST issue by Myer

http://www.smh.com.au/business/gst-push ... 18j5d.html

[Alistair]

http://www.smh.com.au/business/gst-push ... 18j5d.html

Pretty clever! It's a good idea, but of course all the money will really go to either China, or a couple of fat cats in Australia and the Myer "brand". It's not going to create any jobs, and I guess it's up for debate whether it will result in less jobs in Australian retail, or whether that's maybe an inevitable due to purchasing habits. It would be pretty interesting if a few of the big guys do this- the loss of GST would be enough to force the government to do something. The govt must be starting to shit itself!

It looks like my little business has just picked up it's first pro audio brand- so we'll see how I do with that. Plan is to match US prices + shipping, and make that the price with free shipping within AUS. Should be perfectly possible, but as mentioned earlier in this thread(or maybe the other one) it's only cause the supply chain is very small.

[mylesgm]

and so what is your pro audio brand or is it a bit early to say? I think that it sounds like a fine idea...

[Alistair]

Square State Solid State- pretty small company making inductor EQ's in the US. http://www.squarestatesolidstate.com/

That being said, I don't really want to turn Trock into a sales pitch! I'll link my website in my signature so I'm not hiding anything, and then people can follow it up through those channels if interested, and we can keep trock free of all that marketing crap.

The Myer stuff was on the news a bit last night- general 'change is bad' scaremongering type stories, but interesting nonetheless. At the same time DJ's is saying it could be the worst xmas trading in a long time, but I feel like they recycle that story a month out from every xmas.

[mylesgm]

Hi Alistair,
Neat, I've seen those eq's when trawling the net and was quite interested so when they arrive I'd love to try a pair.
M

[musikwerks]

http://au.pfinance.yahoo.com/b/michael- ... ternetting

[ChrisW]

I agree, this is as much about the GFC as it is parity and shoppers buying overseas.
In my area, the people who aren't working in mining are doing it tough.
A lot of people are nervous, or at least being careful. Property prices are down where I live, and auction completions below 50%.
The winery concert season has stuttered a bit, with fewer sell outs and some tickets being heavily discounted.
Talking to locals, they are cherry picking what they spend their entertainment dollars on.
I don't think the stores are quiet because of web purchases.
Over the last few weeks I've received special offer after special offer from music software companies.
Native Instruments and Toontrack offering 50% off deals etc....
Time & Space in the UK having a big sale too.
Makes me think things are very slow in the plug-in business too.