Solomon Lew’s GST threat over Australia Post offshore plan
RETAIL billionaire Solomon Lew is threatening to ship Australian online orders from New Zealand to sidestep the GST in light of the Federal Government’s failure to axe the tax-free threshold for overseas purchases.
The Premier Investments chairman has also slammed Australia Post for setting up a US mail forwarding service that will allow consumers to bring goods into the country GST free, saying the move will undercut government revenue and cost jobs.
GST does not apply to overseas purchases of less than $1000, an exemption local retailers claim is unfair and puts them at a competitive disadvantage to overseas rivals.
Mr Lew yesterday said he had ordered his management team to explore options to ship local online retail orders from New Zealand and Singapore from next year, allowing them to avoid paying GST.
Premier Investments owns brands including Just Jeans, Portmans, Peter Alexander, Dotti and Smiggle, and already operates from New Zealand and a number of Asian countries.
“We are paying hundreds and hundreds of millions of dollars to the Australian Government (in GST) while all the others get a free kick — it’s just not on,” Mr Lew said. “There is no country in the world that is tolerating this problem.”
Premier Investments ships local orders from Australia, meaning GST is applicable.
Chief Mark McInnes said the company had tried to be a good corporate citizen but could not remain at a competitive disadvantage due to the low-value threshold.
He also warned any move by Premier to sidestep the GST would spark “a flood” among other major retailers to set up similar arrangements.
“Wesfarmers, Woolworths all have New Zealand businesses. They can all ship out of New Zealand and into Australia and they could do it tomorrow if they wanted to.”
Accounting firm Ernst & Young estimates the Government will miss out on $2.5 billion in GST in the three years to June 2015 by not axing the threshold.
Mr Lew said it was “almost incomprehensible” that the government-owned Australia Post would assist consumers to buy goods GST free, claiming it amounted to a “free kick for international suppliers”.