Smiggle owner Solly slams government

$1,000 GST threshold damaging Australian businesses and losing jobs

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published December 4, 2012 12:41 pm AEDT

Solomon Lew, chairman of Premier Investments (ASX: PMV), the owner of retailers such as Just Jeans, Jay Jays, Peter Alexander, Smiggle and Dotti, has lashed out at the government, saying it's too late to change the $1,000 threshold for GST on purchases from offshore retailers.

Speaking at the company's annual general meeting, Mr Lew said there was overwhelming evidence of the damage it had done to the local economy, and warned that it was putting Australian companies and jobs at risk.

"My message to the government is that we have all run out of time", said Mr Lew. "In every other comparable country, governments have recognised the need to deal with this as a serious matter of public policy and have already acted, while our government plays 'process games'."

Related: Bad news for online shoppers

Executives from David Jones Limited (ASX: DJS) and Myer Holdings (ASX: MYR) have also previously urged the government to change the threshold. Harvey Norman Holdings (ASX: HVN) chief, Gerry Harvey has previously said that he had given up on pushing for changes to the threshold, and was washing his hands of the issue.

A recently released government report called for the threshold to be dropped to $500 immediately, and plans put in place to cut the threshold to around $20 over the longer-term. Comments by government officials suggest they are unlikely to follow the recommendations, citing concerns over the cost to implement the lower hurdle and the additional workload it would put on customs staff.

While other countries have convinced international online retailers to charge the relevant taxes, including the UK and Canada, Australian officials have said that it would be too difficult and costly to implement and police.

The Foolish bottom line

A sceptical person would say that no government would want to implement such a change in the lead up to an election, given the likely impact it would have on consumers. With the Federal election due next year, it may be unlikely that we will see any changes to the threshold before then, with the issue 'kicked down the road'.

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Motley Fool writer/analyst Mike King owns shares in David Jones. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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