GST Probes Big Retail In Wake Of Borders, Colorado Collapse
0Overall Score

GST investigation has now opened a bag of worms, including the fact retailers here enjoy far higher profits than foreign rivals. The government investigation into retailers GST claims has led them to look at some other major including the growth of retail giants including Officeworks.
Although the retailers campaign is the main focus of the investigation, other issues that have come to the fore now includes the growth of ‘big box’ retailers like Costco and Bunnings and how they are affecting the sector.

The campaign led by industry stalwarts including Solomon Lew, Myers’ Bernie Brooks and Gerry Harvey sought to put pressure on Canberra to introduce a 10 percent GST on all goods purchased from overseas web sites and launched a series of full page ads on Boxing Day to that effect.

The productivity commission have also been asked to look at another important issue of the role of private investors in retail, which is particularly apt given the collapse of two major retailers in the Australian landscape in recent weeks.

Just last week, Colorado Group, which boasted some major high end brands like JAG, Diana Ferrari, Mathers and Williams was put into receivership owing $396 million.

Retail magnate Solomon Lew, owner of Just Group, and one of the ringleaders in the GST campaign, is said to be eyeing up the entire group for purchase.

In effect this investigation could open up a whole new bag of worms for retailers.

The Commission has found  “the profitability of some large retailers in Australia significantly exceeds the industry average,” and many of the big players “enjoy higher profit margins than their overseas peers,” according to its latest  paper released last week. .

And the original purpose of the probe – to look at retailers claim that GST loophole could be dead in the water. 


“Based on the preliminary evidence available to date, it appears that even a large reduction in the threshold may not necessarily have a significant impact on the number of parcels not subject to GST and duty,” the Commission said in its latest findings.

And it seems most of the goods bought online from foreign retailers are worth under the $100 mark anyway, according to Customs data.

“The debate has moved on,” a spokesperson from Assistant Treasurer Bill Shorten’s office said.

Commissioners Philip Weickhardt and Louise Sylvan are charged with leading the investigation, entitled Economic Structure aad Performance of Australian Retail.’ A draft report will be out in August.