GST: Maintain the rage – but calmly!

May 20, 2010: Photo Counter this morning put a series of questions to Paul Curtis in his capacity as PICA executive director – and PMA representative on the GST-free imports issue. We thank him for his prompt response, which follows in full:

Naturally we are very disappointed in the decision to leave the GST-free threshold at $1000. However, we were successful in defeating the bid by the carriers to have the GST level lifted above $1000.

While we can take some consolation from this, the Federal Government’s decision seems grossly unfair and un-Australian.

Compounding the problem is that our hopes of bringing pressure from the state premiers and state treasurers to bear on the Federal Government are
also fading. The cold fact is that the submissions made to States on behalf of the 10 trade associations involved have so far met with no support.

We have two immediate courses of action open to us at the moment:

Firstly, that in the atmosphere of a pre-election campaign, an overwhelming display of negativity from a broad section of small business could lead to a
government backflip. It’s been done before. And that is why I proposed the petition be made available at the PMA show for all to sign.

However, we have to retain an element of practical reality by wondering if we could ever raise sufficient support from not only our only trade, but
other associations as well. My previous attempts, by articles in trade journals, to create a broad-based outpouring of rage hitting parliamentarians and treasury failed most dismally.

Admittedly, since that time and as I predicted, the amount of cross-border transactions have increased dramatically, but one has to ask, ‘How will the result be any different this time?’

But this is the first immediate step that can be taken. We will see how the industry responds. Perhaps some of the reported outpourings of rage can be turned into a more fruitful direction? While on that subject, please don’t write to me, write to the government! Copying me would help, but it’s Treasury and MPs that are the target!

The second approach is to challenge the treasury position and put a case before the government that causes them to review their decision that collecting the GST on items under $1000 is not economically feasible.

To successfully do that, we will have to provide a very factual and substantiated report. Hearsay, supposition and fantasy will not help our case at all here. For instance, I have heard via sources that government rates 85 percent of all these imports as under the value of $1000.

I have also heard that treasury believes that it will cost them six times more to administer collection then they will gain. But, I cannot name those sources
and until such things are properly documented; the use of such statements are of more potential harm than help to our cause.

Freedom of information disclosure does not seem free at all. It is a process with pitfalls and obstacles that can only be negotiated by experts.

The 10 associations are looking at this problem to see whether a pooling of resources would allow us to begin this process and, more importantly, what
the likely outcome would be.

We also need a champion in parliament asking questions of the Treasurer and the Minister for Small Business. It will be hard to find one willing to risk their voters’ wrath in an election build-up. However, one of our leading members of the industry is pursuing this matter in his own electorate.

Few others, in the industry, apart from Malcolm Kennedy, have already taken this step.

I can reluctantly reveal that there is a third alternative – and a fairly obvious one at that. But we can’t begin that process without a fair amount of soul-searching.

Again, one has to come back to practical reality and ensure sure that we are not off tilting at windmills. The industry shouldn’t use the issue as a convenient whipping dog for any other possible reason for business failure.

Cynics might wonder when some retailers and distributors keep saying they are not making money out of selling cameras, why are they so fussed about
this? If this is in fact the real reason, shouldn’t we expect a more determined action by all industry participants?

I believe what the industry now needs is take a non-emotive and serious look at the question. Ask themselves what they are doing about the problem
as a company and as an individual. After that we can consider the best way forward.

After all, like many other situations, shooting from the lip is of no help at all.

– Paul Curtis,
PICA


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