Will you still do it?

[Stardrifter_WA]

Hi All :hi:

With talk that the Government is considering doing away with the $1,000 tax free threshold on goods purchased overseas, I was wondering if this will make any real difference.

Business is lobbying, quite strongly, to have the threshold removed, as they say it is unfair, as it is hurting business in Australia. It is a fair comment, and quite justified, but will it really make any real difference, particularly considering the cost of collecting this tax?

I often purchase goods from overseas and adding a 10%, plus clearance cost, is not going to make much difference to my purchasing decisions.

Why not? Simply because the cost of the goods overseas are still so much less than the cost of buying the goods in Australia, and that is also taking freight into account. In one particular instance, an item was worth around $180 in Australia (the cheapest price I could get), whereas, I purchased the exact same item from the US for around $65, including freight, and it only took a few days to get here. Adding 10% will make the item a bit more expensive (at $71.50), but that is still around $108 cheaper :eyepop: I am simply not that financial that I can donate $108 to a business in Australia, for effectively, that is what I would be doing.

And, I am not saying business are ripping us off, as it is far more complex than that, as they have very high overheads, and most business I know about have small margins. A lot of the problem is all the middle men, each taking their cut.

My point is, will another 10% on goods, make you buy in Australia? The cost of collecting this tax is just as much as it raises, which is why the threshold was introduced.

Yes, I think we should support Australia business, and I mostly do, however, it is becoming a global marketplace and Australian businesses have to adapt to this reality. And, I live on a meager income these days and have to make my money go further.

And I am saying, that we should pay tax, no question about that, but in paying that tax costs as much as it raises, what is the point if it doesn't protect Australian businesses.

So, the question is, "will you stop purchasing items from overseas, if you have to pay an extra 10% plus clearance cost"?

Cheers Pete

[wasyoungonce]

I will still be buying from OS.

[AndrewJ]

But just think of all the job options that will create for the unemployed.
We can have rows of people paid to sit at customs and check stuff,
and their pay will then roll back into "our" economy
( Until the contract gets sub let to cheaper offshore centres :lol: )

Andrew

[Larryp]

I have been buying my shoes from a large mail-order company in the U.S.
They could not sell some of the brands sold here, but others were ok. Last time I was informed they were unable to sell ANY brand sold here, so I had to buy a brand with no Australian presence.
Fortunately I latched on to some US brands that fit me well.
But the initial difference in price on my favourite brand of walking shoes was $220.00 here and $85.00 in U.S.-that's not going to be compensated by adding GST!
Anyway it seems the local distributers have tied up exclusive rights with the manufacturers to protect their huge margins, so why do they need GST protection?

[Astro_Bot]

You ask that question with a straight face? The answer is: to make more money! :)

For me, the price difference, including shipping and GST, is still in favour of buying O/S most of the time. But the other reason is product range and availability - a much wider range is available on O/S websites, and they almost always have stock.

I also find that most O/S sites offer better service, but that's just a bonus.

Whether GST gets added or not doesn't fuss me that much. In a way, it might be a good thing - it would remove the last "valid" argument for why local retailers aren't doing well (as well as they'd like) and might finally expose their ineptitude for all to see.

The collection method for GST will interest me much more. If it happens, I sure hope it'll be seamless. Oh, who am I kidding? This is the oz gubment we're taking about - D*ckheads R Us.

It's the exclusive distribution, country-blocking arrangements that annoy me more than the GST question.

[astroron]

I will still buy OS, I buy my books OS as they are so much cheaper than here, a book costing $50:00 +10% GST=$55:00 thats still nearly half price compared to the same book here in Aus,and it is posted free.
Cheers:thumbsup:

[Larryp]

I think a lot of the push by retailers to apply GST to overseas purchases is to cover their own poor business acumen.
I read in the news today that Harvey Norman and JB HiFi have had dramatic increases in their share prices this year, so they must be doing ok.-but then perhaps they have the ability to sell!
Perhaps some other businesses need to improve their selling skills!
Governments, of course , will jump on the GST bandwagon if they think they can extract more money from us-pretending they are protecting Australian businesses.

[Stardrifter_WA]

The Internet has certainly opened up a new world for products. I found some really neat gadgets online and ordered them last week and got them within a few days. The world is shrinking! :lol: It amazes me that I can get something shipped from China for a fraction of the cost of getting something shipped from Sydney, particularly since it gets delivered to my house by the same company :question:

Laurie raises the point that some items cannot be shipped to Australia, due to exclusivity agreements. Yes, I have faced that problem also, and got around it sometimes, and did so with the item I mentioned in my original post. But, it is getting harder, mostly because Australian businesses, and rightly so, are seeking more and more protection, and will continue to do so.

I have also boycotted products that dictate where I HAVE to buy them, there are lots of alternatives these days. It is my money and I will spend it WHERE I want, not where they tell me, particularly if I am having to pay a premium.

[Stardrifter_WA]

Astro_Bot, you raise a really good point here.

[Shark Bait]

I believe that local retailers might want to be careful on this one. I can't see this as being a popular move. The market has come to realise that we were generally being charged too much on a whole range of goods. This could backfire on retailers by creating a sense of resentment among consumers.

[glend]

I will continue to buy overseas (for now) and this will only increase overseas purchases in the next six months or so as everybody rushes purchases to beat the deadline - good time to buy scope stuff from overseas if you can stay under the threashold or break up purchases. It probably won't take effect until 1 July next year, so work that credit card.

[FlashDrive]

Yes...I will ... but some factors will govern my decision.
The exchange rate and freight costs involved....then having to add the 10% GST. ...:question:

Col.........

[Bassnut]

Ahh you guys. The gov needs to raise revenue, GST is a fair way to do it. GST should be charged on all imports, in fact it should be 15% on imports to cover recovery costs. How can local retailers hope to compete otherwise with a 10% impost straight up regardless. Hate that?. Sure, why not eliminate GST on imports altogether, shut down retailing altogether in OZ and everyone in retail goes on the dole. Then you accept the consequences, or the gov raises revenue some other way, your income tax?.

[FlashDrive]

I know what your saying Fred......but human nature will ' kick in ' and people will resist to buy on line .... then the ' tax grab ' gets a whole lot less for the Govt.....then it will cost more than they can raise to administer the scheme.

Col.........

[Kunama]

It has to be a substantial saving for me to buy overseas. Having had a few things go missing previously, I now only deal with a select few businesses.

Some items are not available in stores in Australia, so those I seek from O/S.
Bassnut, I agree with your point, if we as Australian are not careful we really will end up as 'tenants' in our own country. I fear Coals, Woolies and Hardly Normal are leading the charge as it is increasingly difficult to buy anything Australian in their stores.

[Bassnut]

I don't understand, if ppl resist buying on line, then do they go without altogether, really, or do they then buy local?. is "buying" less OS product such a bad thing anyway, don't you have enough cheap stuff already?

[Kunama]

Unfortunately there is so little Astro gear for amateurs made in Australia as 'we' simply cannot compete with the manufacturing costs of o/s factories, esp China, Taiwan et al. Gary's Wildcard Innovations being one exception with their product being the standout in DSCs.

Still, I would hate to see the day when local shops like Bintel, myastroshop A.E.C. etc did not exist as we would then be at the mercy of o/s retailers.

[Wavytone]

No:

- if the item is simply not available in Australia (often the case),
- if the item is significantly cheaper overseas (enough to warrant the delivery costs)

10% is unlikely to change anything and it will be interesting to see how the government thinks its going to make this work.

[FlashDrive]

true....they may then choose to go without ...because the item is way too over priced in Aussie. .....I've been there and gone without.
No....buying less from o/seas is not such a bad thing either....and as far as having enough cheap stuff.....I'll give you an example....

I recently imported a camera adaptor from Hong Kong ( for my Olympus Digital ) ... landed at my door ( free postage )...for $62.00 all up.
The same item from Camera House ( identical item ) in the local Westfield Shopping Centre quoted me at their counter...$145.00.

Why wouldn't I buy from o/seas at that price difference......you'd be mad not to.

So the big retailers scream....not fair....I don't think so.
I also don't buy all my items o/seas.....just like someone has said here...it's a ' global market ' now.......we can shop anywhere/anytime.....for some it's good....some not so good.

Col............

[RobF]

I'm with Fred, although we all hate paying anything more for our goods. While we're at it though why not simplify our complex tax regime a little and make up the shortfall and bit more by increasing the GST across the board. Fairest way to get the budget back in the black.

[norm]

The GST imo is not likely to detract people from buying o/s - even if they increase it to 15%.

The sad reality is that the retail industry, like manufacturing is on its slow demise.
Apart from taxes and overheads, arguably the biggest killer is our wage rates - its just too high.

Don't get me wrong, I don't like seeing people earn a pittance, we all need to live, but I can't see how we can compete unless there is an even playing field. Tariffs, GST, - I don't know if they're the answer, but our short term gain is going to be our long term pain.

Our government needs to come up with strategies to keep businesses going (eg, remove red-tape for starters), otherwise the next generation of kids will have one less industry to choose from as a career.

Norm

[Stardrifter_WA]

And yes, then you are charged more "income tax" to make up the shortfall, and to support business with government paid subsidies, like they do in the car industry. Maybe it is then back to tariffs, like they way it used to be, but, as far as I am aware, under international trade rules, this is illegal. There are no easy answers, but to raise taxes and it cost more to collect it, is stupid in my view, although I understand the need for it. Ten percent won't make a difference when the disparity in prices are so great, it won't stop people seeking lower prices overseas. It certainly won't stop me, but I also realise that I need to support local business too. Caught between rock and a hard place, I just don't earn enough to afford the prices here any more, and I live in a state with the highest wages, but I am not seeing any of them. :sadeyes: I have no choice but to seek the best bang for my buck now. I certainly don't like seeing money head off shore, as I do think about my children's future.

Apple has the right idea with tight controls on their products, it costs about the same to buy an iPad in the US and here. It is better to buy it here and have a local warranty, for the little difference in price.

Australia can never really compete with the USA market anyway, it is much larger and has more buying power and has lower taxes. Wages in the US are appalling in comparison to here. When I was in Albuquerque in August, fuel was 85c/litre, however, there is only a 3% tax on fuel, which, I believe, is now about 54c in the dollar tax here in Australia.

There is always going to be a disparity and companies worldwide are struggling with this, because the Internet makes it just so easy to compare these days.

[lazjen]

It wouldn't change my buying behaviour.

I agree that the GST should apply across the board as it would remove that form of complaint from retailers.

I see mention our high labour rates. In fact our rates are probably ok since they give a basic standard living level. What hurts Oz businesses is that the field isn't level - other countries often pay a pittance and don't have the same standard of living as us. If some form of "duty" was applied to imports from these countries, you'd see that good Oz companies would be able to compete locally and fairly. It can't happen I believe due to international trade laws/agreements, but it would certainly make for interesting times.

[Camelopardalis]

Won't change my behaviour...but it really depends what it is. If I can find what I want "locally" for around the same (taking GST into account) then that's a no-brainer.

As funny as it might sound, 10% is a pretty reasonable rate :D back in the UK the tax rate (VAT) is 20%. If you buy from outside the EU then you're likely to incur both VAT and duty, which for astro equipment works out about 25%. Even then, there are cases where you still can't find what you want at a good price in the whole European free trade area :rolleyes: and end up ordering from the US and paying the 25% import and still manage to save money :lol: just saying, it's not just a problem isolated to Australia...

[Stardrifter_WA]

Here is the downside to cheaper prices, as reported on the ABC News website:

http://www.abc.net.au/news/2013-11-30/wal-mart-brawls-as-shoppers-protest-labour-practices/5126652

Labor costs in the US are very low compared to Australia, which is one of the main inputs into any business. I was offered a job in the US, doing pretty much what I do now, and when told what I would earn in an hour, I just stared at them in disbelief. :sadeyes:

We pay higher prices because of higher wages, high rents and higher Government compliant costs. Buying off shore and sending our money off shore is going to hurt local business and ultimate hurt us, as is the case in the US.

I am simply torn between going after the best price and ensuring local support, as at the end of the day, if we don't buy locally, we won't have jobs, and going after the cheapest price won't matter, because we simply won't be able to afford it anyway. And we cannot think that everything will be ok because we have social security benefits to fall back on, as we will end up like the US that has little in the way of social security benefits, simply because they cannot afford it, Australia is doing well at the moment, but we cannot be complacent and think it will remain that way.

Ultimately, we may have to expect a lower standard of living in Australia, if our money keeps going off shore, so I think the Government doesn't have much of a choice but to introduce a tax on all imports, and they will just add higher clearance costs to reflect the cost of collecting the tax. We lose either way. :sadeyes:

[Astro_Bot]

Some more idle thoughts ....

Whilst we who can afford astro equipment probably have the choice of buying locally or offshore and arguing the relative merits, many people have a simpler choice: buy at the absolute cheapest price or go without.

It's not that anyone wants to see Australian businesses go bust, but when the price difference is so great (in some cases), people will make the obvious choice. On top of that, most of the products we buy are manufactured overseas. I don't really mind if GST gets added to everything, but I don't think that'll do anything for Australian manufacturing and it will, IMHO, only delay the inevitable for retailers who refuse to adapt (or adapt too slowly) in the global marketplace. It's been coming for years - I recall conversations with friends on this topic a decade ago - but some retailers still don't even operate a website.

Plus the standard of service in many Australian shops, and/or product availability, doesn't endear them to the average buyer. For example, I've been looking for small items over the last few months - about 80% of my recent purchases were from O/S simply because an extensive search couldn't locate the items in country, but they were easily found O/S. For the few items I could find here, mostly they had no stock, had no idea when they would get stock, the price difference was about a factor of 5, and they were all made in China anyway.

[WadeH]

I will not change . I dont purchase due to cost, it is convienience and products not easily available from home that drive my internet purchases.
On another tangent, GST is a joke anyhow, largley due to the Greens way back at the start. Until it totally replaces all other taxes (e.g. stamp duty) as it was suposed to do, we will have a ridiculous and unfair tax system.

[Terry B]

Last time I bought an item from os that was about $2000 I payed GST plus the clearance cost. That cost was about $80 I think from memory.
If the GST threshold is lower but the clearance cost remains the same the overall gain from buying cheap good os would reduce. If a $100 item has $10 GST added plus $80 fixed clearance cost yu have almost doubled the cost. Maybe this is what the local retailers are hoping.

[Stardrifter_WA]

Terry, you make a good point, but if the clearance cost is fixed, all that will happen is that people will just make sure they buy more in one transaction, just as we currently buy less to keep it under the $1,000 threshold.

[Astro_Bot]

The potential GST "windfall" maybe smaller than claimed by retailers .... surprise, surpise!

Online shopping tax slug not worth the effort: National Australia Bank (http://www.theregister.co.uk/2013/12/02/online_shopping_tax_slug_not_worth_ the_effort_nab/)

[Glenhuon]

I probably won't change my buying habits either. Wherever possible I buy from an Australian business. Some times it costs a few dollars extra, but I would rather support my own than someone overseas. That being said, when you compare the products with ones purchased o/s, it is often the case that they are identical. Example. I bought some Guitar Fret Wire, $2.50/ 300mm length in Aus. Identical product from USA, 1lb (about 50 lengths) $65 including postage.
I try not to buy from mainland China, had too many purchases that have never arrived, or were faulty. Though I must admit that the faulty items were always replaced without question.
I see many comments about our wages being too high in Aus. That's because we seem to be on this never ending spiral, you get paid more, my price goes up. No use being paid $25,000 a week if a loaf of bread costs $10,000.
BTW, the common Aus expression "What It's Worth" is one thing that irks me, it is it's price, put on by the seller, it's worth is whether you are prepared to pay that price. :)

[Stardrifter_WA]

This may be semantics, but in my view, it is only worth what I "want" to pay, not whether I am "prepared" to pay the price on offer. If you pay the asking price, then that is what it is worth. However, if I do not accept the price, then it isn't worth the asking price and I will look elsewhere until I find a price I am prepared to pay. If that means I have to venture offshore to find it, then so be it. I have walked away from buying certain items because I simply couldn't see the value in the asking price. It is usually an item I may want, but actually don't need.

What things are actually worth are based on a persons needs and wants. Any particular item may have different perceived value to different people. For instance a Ford 351 Phase 3 is supposedly worth $200,000, but it certainly isn't worth that amount to me. I simply would never actually want one, after all, my modern car is just as fast and a lot more comfortable. The only value to me would be pose value, and what is that worth? Maybe around $5,000. :lol:

I am reminded by the some the valueless things that have appeared on eBay, over the years, and gone for really stupid prices, like a piece of Nutrigrain that just happened to look like ET or a piece of toast that had the likeness of the virgin mary on it. A ridiculous price was paid for them, assuming that they weren't actually a hoax. But it illustrates my point.

If you buy a brand new item and immediately sell it, then you will find out what it is really worth. Which is why I rarely sell any of my astro gear, because I simply cannot get my money back, because it isn't worth that to someone else, so I keep it instead.

[FlashDrive]

Very well put ....I agree ...!!

[TrevorW]

I believe it's not going to happen because it'll cost most to process and recover than it worth as most transactions are around the $100 mark and if I ask the seller to mark the parcel as sample then what ???

[Stardrifter_WA]

Trevor, that may be correct, as far as it goes, however, what then transpires if the clearance costs are fixed at a high value, as someone else suggested. Add the GST cost to goods of $100 may only make $10 difference, not much in the grand scheme of things. But, lets say, that clearance costs are fixed at $80, for goods under a $1,000, then that $100 suddenly becomes $190 ($100+80+GST) and that would make a difference, and the government would collect more than it costs to collect it.

As I have previously said, that if that scenario were to occur, one will just bundle items to come in just under $1,000 (which includes freight). Then that $80 is spread over the $1,000 which will be a cost of $8 per $100 plus the GST. I think paying, say an extra $8 per $100, may just make me reassess that situation, or I will wait and bundle more items together to make it worth the extra cost of clearance and freight.

I also paid around $80 fixed cost to clear my FLT 110, and I would imagine it probably takes the same amount of time to clear an item worth $100, as it does to clear a package that cost $2,250, so it is reasonable to think a fixed cost for clearance would be a likely factor, in determining the outcome of the review. The really scary scenario would be if they found that the $80 clearance cost was actually too low.

So, I think, given what I usually save, I probably would buy it locally, as it just won't be worth the hassle, particularly adding the time and my fuel cost to go clear it.

But, I will add this, if service doesn't pick up as a result, then stuff the local suppliers, I will buy it from whomever gives me the best service, whether here or overseas. Hang the extra cost, just means I have to work an extra couple of hours. I will not reward a company that gives poor service by giving them my hard earned dollars. If they want my business then they'll have to earn it. And if we all did this, it would send a strong message to those companies, as of right now, they simply don't want to do anything and expect the government to fix the problem for them. It seems now when a company gets into trouble it goes screaming to the government. I don't have a problem with government supporting some industries, but there has to be a productivity trade off. The unions won't allow any changes, so the company often has no other option than to close. I have had that very thing happen to my job, more than once. But then, I just went and found another job, instead of moaning about it. Some of those jobs weren't at all pleasant, but it paid the bills. :D You do what you "have" to do, not what you "prefer" to do, the real world just doesn't work like that for most people, just the lucky few.

By rewarding poor service we just propagate the problem down the line.