Offshore websites' appeal no threat to Australia

Canberra: The Australian government won't be "stampeded" by retailers over the threat to businesses from goods sold by offshore websites, Assistant Treasurer Bill Shorten said.

"We respect the fact that large retailers have ongoing concerns,'' Shorten said.

"But we will not be stampeded into making rash decisions because of a vocal minority, especially when the majority of the sector and consumer groups support our sensible, measured approach."

Harvey Norman Holdings, Australia's largest furniture and electrical retailer, and Premier Investments, whose Chairman, Solomon Lew, was a former executive chairman of Coles Myer, are among retailers who criticised a government inquiry into the future of retailing.

Too slow to tackle

They say the probe will be too slow to tackle the danger from the growth in online purchases from abroad.

Prime Minister Julia Gillard's administration announced the inquiry into the impact of globalisation on domestic retailers.

It said the Productivity Commission will report its findings in 2011 as the government seeks to safeguard the future of an A$242 billion (Dh883 billion) industry.

The Commission also plans to start a "compliance campaign" to ensure that sales taxes and customs duty concessions on imports aren't being exploited, Minister for Home Affairs Brendan O'Connor said in a statement.

The inquiry will be completed "too late" to stop some retailers going out of business shortly after Christmas, Harvey Norman's executive chairman Gerry Harvey said in a telephone interview.

The Australian National Retailers Association — which represents companies including Woolworths, Australia's biggest retailer, as well as Harvey Norman and others — and the Australian Retailers Association, whose members are smaller companies, have backed the government's approach.

"We're all trying to achieve the same end here," ARA's Executive Director Russell Zimmerman said by telephone from Sydney.

"The government has taken a very holistic approach to this review, and I think to try and force the government's hand without knowledge of what the actual problem is means you may end up fixing it the wrong way."

Bulk representation

He said only about 3 per cent of Australia's retail market is currently affected by a problem that is nonetheless "growing exponentially."

The government "has taken seriously the concerns of the retail sector in difficult economic conditions," ANRA's Chief Executive Margy Osmond said in an e-mailed statement.

The associations together represent the bulk of Australia's retailing industry.

"You've got every second person in the country importing things from overseas, evading duty, not paying sales tax," Harvey said.

"It's gaining momentum at a rapid rate.

"Rather than clip it in the bud, they'll end up doing something about it, but it will be too late."

Premier Investments' Lew, who has also been a Reserve Bank of Australia board member, echoed Harvey's sentiments.

"What we all agree on is that the Australian retail sector is hurting and the government appears to be on the side of the overseas retailers," he said.

He called on the government to immediately abolish the sales tax for all purchases under the present A$1,000 threshold, rather than only in the case of offshore purchases.

"All we're asking for is an even playing field," Lew said.