GST angst ‘delusional’

May 26, 2011: The following contribution comes from a passionate and articulate photographer who has been following the current debate on the GST-free imports debate:

I have just bought a professional-standard A3+ printer. It takes 10 ink [pigment] cartridges. The Australian RRP is about $29 per cartridge. A set of 10 genuine cartridges from [NY-based retailer] Adorama is $109. I ordered two sets, which with the expensive delivery included (they arrived within three days from New York) meant that I got 20 cartridges for the price of 10 bought locally. I presume that the Japanese think that we’re a bit thick and haven’t yet got onto the Global Superhighway.

When is this racket – cameras, software, consumables, books, etc – going to end? According to former ACCC chairman Graeme Samuel it is not against the Trade Practices Act to buy products wherever they are cheapest or the service is best. And to blather on about GST, as though 10 percent is going to make a difference when the disparity in price is more than 100 percent, is delusional.

I feel sorry for local retailers, but they have to have the guts to take on the manufacturers and distributors. The sheer greed of the distributors is breathtaking. Why don’t the local retailers start buying their products from American or Hong Kong sellers at their retail prices? They can still sell them for less and make a handsome profit.

I recently bought a popular professional full frame DSLR from Honkers for $2200 all up. The best price I could get locally was $3350 — and that was also the price quoted as the ‘media’ price. Ten percent GST wouldn’t have made any difference to my decision.

Oh dear!

COMMENT: Ask the distributors and they say it’s the cost of doing business in Australia, our rebate system or Aussie retailers demanding a bigger margin than their very ‘umble overseas counterparts. Ask smaller retailers and they talk about extortionate rents, high wages and other costs – and tell you their margins are wafer-thin anyway. (And this is confirmed by the reality that businesspeople aren’t exactly crawling over each other to buy into specialist retailing.) Ask the bigger retailers and they just tell you to, um, go away. My personal opinion is that the Australian market is somewhat dysfunctional because of the disproportionate leverage allowed those larger retailers – plus most of the above!

And given the massive price differentials Australians are increasingly aware are being foisted upon them (see above), to a certain extent, the 10 percent debate is indeed a bit of a second-order issue. A battle worth fighting, sure, but if it’s won, what then? What’s to stop the local lists being increased by, say, around 10 percent? GST-free or not, the online/offshore channel still looms as a formidable challenge to Australian retailing, so let’s not be totally diverted from the bigger issue of consumers’ perceptions of local pricing ex-GST.