Retailers trying to kill off Internet sales

February 5th, 2014 at 4:00 pm by David Farrar

The Herald reports:

The chances of being applied to all overseas web-based retail purchases appear more distant after the Government changed tack on a review into tax of online shopping.

The chances are not more distant. They are zero, and have always been zero.

New Zealand consumers can avoid GST on many goods bought for less than $400 on foreign websites, such as online retail giant Amazon.

The Retailers Association wants GST applied to all online purchases to “level the playing field”, saying the current gap in the tax system makes it more difficult for local businesses to compete against their overseas online competitors, while also losing the country up to $300 million in annual GST revenue.

The Retailers Association effectively want someone to un-invent the Internet.

One can have a reasonable debate about whether the $400 threshold is at the right level, but there is no practical way to apply GST to foreign companies unless you impound every letter and parcel at the border. Even then, electronic purchases of music and e-books would not be affected.

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91 Responses to “Retailers trying to kill off Internet sales”

  1. shoreboy57 (140 comments) says:

    David Clark will be running with this alongside his Facebook ban

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  2. nickb (3,686 comments) says:

    I’ve said it once, I’ll say it again.

    I don’t want to be told “we don’t have this in stock and won’t be getting any more in for 6 weeks” by a surly teenager making a piss poor and rude attempt to sell me a product I could by for half the price online.

    Sort out your crappy business model instead of finger pointing

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  3. Joanne (177 comments) says:

    I want to see Labour give us the logistics of paying GST on overseas purchases. I want to see costings. I want this because
    I can then laugh and laugh at their foolishness.

    How come a website like Book Depository sell me books that are published in NZ so they have to get it from NZ at a fraction of the price nile.co.nz charges?

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  4. nasska (11,277 comments) says:

    An oxygen sensor for a small late model Toyota. $550 at the thieving dealers, $235 at a local auto electricians but $23.90 US (plus freight) from a parts business in the States advertising on Ebay.

    Long live the internet!

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  5. coventry (321 comments) says:

    An air conditioning compressor for a late model Honda. $1400 at the thieving dealers, $380 from wreckers (second hand), but $350 (NZ including freight) from Amazon for a new one.

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  6. Carlos (682 comments) says:

    Get rid of GST altogether if it’s such a pain in the ass.

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  7. johnwellingtonwells (137 comments) says:

    The threshold in Australia is $1000 – much more realistic

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  8. peterwn (3,243 comments) says:

    johnwellingtonwells – NZ customs recommended raising the $400 limit to about that a few years ago and the screaming really started. Customs reckoned it was uneconomic to collect GST on smaller value imports. Where GST/ Duty is collected there is also a stiff processing fee (all in the interests of ‘user pays’), and trying to impose that fee on low value items would cause rioting in the streets.

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  9. Tinshed (168 comments) says:

    Other than food, I can’t recall when I last bought anything of substance from a bricks and mortar shop. Most is bought online and probably about 50% of those purchases from overseas retailers. The overwhelming reason for buying overseas is the range, quality, and price of the goods on offer. Especially range. I am a larger person and found getting high quality clothes that fit almost impossible in New Zealand. I once went into a fancy shirt shop in Wellington and after a few minutes browsing was helpfully told that they could get any shirted altered to fit my size. Jeez, thank you! So now I get shirts that fit perfectly from L.L. Bean for less than you pay for the most average of business shirts from Hallensteins, GST or no.

    The reason we don’t buy locally has virtually nothing to do with the cost of GST, but so many other factors. Until New Zealand retailers wake up and become more customer-centric, they will continue to find themselves slowly going out of business.

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  10. wrightingright (143 comments) says:

    I’m certain the current threshold of $400 is too high, over in Australia they recently had a similar fuss kicked up. They did a study and come to the conclusion it was uneconomic (as in it cost more to collect than it got it) for the threshold to be lower than the AU$1,000 that it already was.

    So I reckon it needs to be lifted in NZ, to say at least NZ$1,000.

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  11. Colville (2,261 comments) says:

    I am looking for a mid sized superlite tramping pack, the one I want is $399 in Auckland. Ex UK its 65 pounds. So less than half the price.

    But get this…

    Freight from Auckland to Palmy is $27. Freight from UK to Palmy is $43 via air. 7 day delivery. Ha :-)

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  12. tvb (4,363 comments) says:

    I buy a considerable proportion of clothes shoes books and anything else online. NZ Retailers have ripped off NZ consumers for years and years. I do not know how this is going to end up. But it looks grim for local shops

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  13. wrightingright (143 comments) says:

    johnwellingtonwells – NZ customs recommended raising the $400 limit to about that a few years ago and the screaming really started. Customs reckoned it was uneconomic to collect GST on smaller value imports. Where GST/ Duty is collected there is also a stiff processing fee (all in the interests of ‘user pays’), and trying to impose that fee on low value items would cause rioting in the streets.

    It is absolutely crazy that they’re charging us an extra fee for taking our money! It is theft upon theft!

    I once purchased an item that they thought was slightly over the threshold, and once you added on all the extra charges those ended up being more than the GST charge itself was! Madness.

    The threshold needs to be raised to such a level that they don’t need to double whack us at once with charges, at that is most probably at least NZ$1,000 if not even higher.

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  14. F E Smith (3,305 comments) says:

    One can have a reasonable debate about whether the $400 threshold is at the right level,

    It is not the right level, it is much too low.  As said earlier, let’s talk about whether it should be $1000 or $1500.

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  15. 2boyz (260 comments) says:

    Books are a major rip off at NZ retailers, just brought a book from ‘The Book depository’, $22 freight free (arrived in less than two week). Shop down the road wanted $48 for the very same.

    Partner brought some new skis, boots (the works a year ago) for our two kids as well. Over the $400 limit by a good bit, even having to pay GST the stuff came well under what you would expect to pay in NZ.

    It’s hard not to use online overseas purchasing the savings are just too good.

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  16. safesally (47 comments) says:

    Can be done – banks would apply it. Other money transfers would be coded differently. All would of course be subject to audit.
    On the other hand, retailers and wholesalers sort your shit out.

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  17. wreck1080 (3,883 comments) says:

    I just bought a couple of things from amazon — saved a bucket load. The GST will make some borderline purchases uneconomical , and some previous bargains will become borderline — but the majority of things I buy online save much more than 15%.

    If i were just saving 15% i might buy locally anyway, for the CGA protection.

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  18. Chris2 (762 comments) says:

    A seat belt buckle for a Volvo car – $1000 at the thieving Volvo agent in Greenlane, $165 (inclusive of shipping) from a UK Volvo parts dealer, and this included not just the buckle, but also the complete seat belt as the buckle was not sold separately anyway.

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  19. big bruv (13,718 comments) says:

    I’m all for internet shopping, as previously stated I no longer buy shoes in NZ when the quality I can get through Amazon is better and the price if roughly 50% less than I pay here.

    However, those in this thread who have said that the retailers are ripping off the NZ consumer (and by inference making a fortune) have no fucking idea what they are talking about. I would wager that not one of them has ever been in retail in their working lives.

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  20. ciaron (1,422 comments) says:

    Nasska & Coventry;

    Car failed warrant on bushing for a rear transverse link. Toyota said: can’t have bushing, you need WHOLE HUB assembly, $ 880 thanks.

    an hour or so on the net found identical part used in another model, local price $60 each

    10 min on ebay found same part ex US… could land two for less than $60 within 5 days.

    (Toyota said they’d give the hub assembly to me for half price as it was an old stock item they wanted to shift, I told them I’d take it if they could get it to me for $60 :) )

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  21. RRM (9,833 comments) says:

    Rather than whinging and calling for government protection, why don’t NZ retailers instead focus on their #1 competitive advantage over Amazon.com – responsiveness and customer support?

    Or their #2 competitive advantage – I don’t have to worry about shipping?

    I hate buying shit online from international sites.

    The currency conversion fees. The unknown delivery dates. The unknown delivery fees. The endless waiting on hold to speak to Sanjeev if when something goes wrong.

    I only ever buy stuff online when something is unavailable here. Or if it is very significantly cheaper than buying it here.

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  22. burt (8,236 comments) says:

    The people who make wooden wagon wheels for horse drawn carts – I bet they want additional tariffs on car wheels.

    Come on retailers – you don’t have a god given right to have your business propped up – your model no longer fits the real world – adapt or perish – it really is that simple.

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  23. unaha-closp (1,158 comments) says:

    The Retailers Association effectively want someone to un-invent the Internet.

    Someone to un-invent GST…

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  24. burt (8,236 comments) says:

    RRM

    why don’t NZ retailers instead focus on their #1 competitive advantage over Amazon.com – responsiveness and customer support?

    Quite simply the NZ sense of entitlement to other peoples money mindset makes them think it’s valid that people pay more than they need to so they can continue to make money. A proud history of protected markets and perverse incentives have conditioned them to expect the government to look after them at the expense of consumers.

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  25. queenstfarmer (772 comments) says:

    @big bruv, “those in this thread who have said that the retailers are ripping off the NZ consumer (and by inference making a fortune) have no fucking idea what they are talking about”

    When local retailers are persistently charging MUCH higher prices for goods (allowing for GST) than prices for the same goods available from online stores, I think most people regard that as a “rip off” – and justifiably so.

    What’s your definition of rip off?

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  26. burt (8,236 comments) says:

    queenstfarmer

    It seems that big bruv has suddenly become socialist and thinks it valid that barriers are put in place so local retailers can compete with online sales. I guess he’ll be joining the Labour party soon and joining a union as well.

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  27. Chris2 (762 comments) says:

    When you can find NZ-made goods, like wine, selling in UK stores for less than what we pay here in NZ, then we know with complete certainty that we are being ripped off in this country. Even NZ Duty Free is dearer than retail stores overseas.

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  28. RRM (9,833 comments) says:

    then we know with complete certainty that we are being ripped off in this country.

    Ah, but who’s doing the ripping-off? That’s the question! ;-)

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  29. dave_c_ (217 comments) says:

    big-bruv – We may have no fucking idea what we are talking about ! But if it looks like a rort, smells like a rot, its more than likely a rort ! However, in this modern world where goods are available for price A, and local retailers for 3 x A, the customer is well within their rights to purchase from wherever they want – Its a bit bloody rich for the local retailer to bleat about how much of an impact that has on their business, but tough ! If their business model / costs etc cant compete – get out, close up the shop and do something else. Assholes to think they can blame (and request more charges be placed onto the customer) the very custromer to whom they want to sell something -

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  30. slijmbal (1,230 comments) says:

    There seems to be confusion between the problems of cost for small scale retailers as we have in NZ, some retailers abusing effectively monopoly conditions and the assumption that lack of GST is the key issue around competitiveness between local and foreign internet retailers.

    There are goods such as books, which are amazingly expensive in NZ but we don’t see the likes of Whitcoulls making mega dollars and fishpond.co.nz isn’t particularly cheap. They don’t get to compete on scale and GST does not make any real difference in the cost of books from the bookdepository.uk – you could add GST twice to their costs and they would still be significantly cheaper in what is essentially a commodity product. They aren’t ripping off but don’t have a valid economic model and should not be protected.

    There are monopoly like cases e.g. many automobile manufacturers charge like wounded bulls on parts as they can (some manufacturers actually sold their cars at cost and made their money on parts) – this can be bypassed via wreckers or specialist parts vendors from larger markets where they can exist owing to scale.

    Raising of this matter seems to be also forgetting that these non-NZ vendors are competitive despite adding significant shipping costs to their goods.

    GST is not the issue and is a red herring for a wide range of goods.

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  31. Mobile Michael (446 comments) says:

    Safesally – how can a bank know the delivery address of an online item? If I buy a friend in the US a present from Priceline then its no business of the IRD. Or if I buy an e-book from Amazon while I’m on an overseas holiday. You would not be able to practically collect GST through banks without allowing them big brother surveillance levels and recompense them for those costs.

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  32. unaha-closp (1,158 comments) says:

    dave_c_

    Socialist little NZ slaps an ever increasing (currently 15%) tariff on all locally purchased goods, to pay for its ever increasing socialist spending. This tariff means that no local retailer can ever compete with an internet based firm on price, so they don’t. They compete on service, availability, support, rapport, atmosphere and so on – all of which adds costs.

    You’d never, I’d never set up a business in NZ that tried to compete on price, because neither of us are idiots.

    This disparity exists is because our socialist governments charge Grab, Smash & Take on everything. Not because retaillers are ripping people off.

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  33. chris (644 comments) says:

    RRM

    Or their #2 competitive advantage – I don’t have to worry about shipping?

    We’ve had lots of nightmares with shipping from NZ websites, along with extremely poor customer service and communication (which relates to your point #1). To date, I’ve only ever had one issue receiving something from overseas and they sent another item when the original one never turned up. And then the original turned up a few weeks later anyway :)

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  34. chris (644 comments) says:

    Even NZ Duty Free is dearer than retail stores overseas.

    NZ Duty Free wine is more expensive than what you can buy in the supermarket in New Zealand.

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  35. trout (937 comments) says:

    Question fo Colville; what superlight pack did you settle on? I am always on the lookout for lighter tramping gear. My Macpac is unnecessarily heavy. On topic bought a camera battery on the net for $ 42 freight free – $119 local.

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  36. Lucia Maria (2,306 comments) says:

    I’ve just bought a whole lot of stuff for the kids going back to school, and most of it from local retailers.

    One exception was school bags. Classy Kids has amazing quality school bags that they import from Germany. In desperation a number of years back I searched for good quality school bags online because EVERYTHING in the local shops was crap. No matter how much money I paid, the bag would fall apart in less than 6 months. The 4YOU backpacks from Classy Kids, however last for years. Two school bags bought that have lasted 3 years and 2 years, the first being totally stressed by a teenage boy who carries everything in his bag, and it hasn’t fallen apart, though it is looking a bit old now. I just bought another one of that type for my Year 9 boy (it’s the Classic School Backpack on the link).

    The point really is, when it comes down to it, local retailers miss out because they don’t stock what consumers want and they are forced to look online. Happened to me with school bags, (though I am buying from locals there), and it happened to me with books. The type of books I wanted to read just were not available here, so I looked online.

    Retailers here in NZ really need to be doing a whole lot more market research to find out what people buy online and why. It’s not just price, it’s quality and it’s variety. If we are not getting that in the shops, we look elsewhere and that’s online.

    Actually, that makes me think of another thing – how I swapped to NetPharmacy from the local health food shop and pharmacy. NetPharmacy (in New Zealand) sells just about every vitamin type product about $5 or more less than Hardy’s, my local health food shop. Hardy’s has an online presence, but their prices are exactly the same as in their shops. They ought be to be giving a discount to online buyers, but no, they want to maintain their high margins which have to take in to account a lease in a local mall. Yet an online shop can operate out of a warehouse. It’s just stupidity like that that makes customers move somewhere else.

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  37. Colville (2,261 comments) says:

    trout.
    Karrimor brand but still tossing up between the lightweight and the next click up.
    The lightweight 55 ltr is 1.2 kg. My macpac cascade 90 ltr is 3.1 kg.
    I am a bit worried I will wreck the lightweight one.
    LOTS of packs in the 60 to 80 quid range. Times 2 exactly for exchange rate.

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  38. Ross12 (1,407 comments) says:

    The biggest “rip off” in NZ is glasses ( spectacles ). Anyone who buys from a local optician is mad. You can buy 6-7 pairs on line
    ( with the fancy name designer frames, if you wish) for the cost of a pair bought in NZ.

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  39. Fletch (6,295 comments) says:

    Also, the “bricks and mortar” stores offer little in the way of selection. Look at Borders, for instance. They were a great bookstore. I could stop in there and browse for ages. They had a HUGE selection of new and older stock. By comparison, Whitcoulls offers mostly newer, more popular books with not that great a selection. Borders got in newer books straight away, whereas they take a while to arrive in NZ stores.

    Perhaps stores like Borders aren’t economic any more, but it sure was great shopping there. I still miss it :(

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  40. burt (8,236 comments) says:

    So put GST on internet purchases… Why not… Because it’s simply not technically viable to enforce and compliance costs will be significant. The NZ GST system is systematically simple and efficient, but is it fair ?

    We’ve probably all experienced being able to purchase ( or not based on geofenced distributor channel’s ) something significantly cheaper online. No argument that when it’s factorially cheaper via the net that GST is irrelevant to the squeals of retailers. But when it’s close, the local operators are indeed being unfairly punished because the consumer has a choice not to pay the GST. This perspective should be the point for government – the defiance of the consumers avoiding the tax grabbing on money that has already had income tax paid on it.

    GST by it’s very nature is a regressive tax, it’s easy and convenient and all that. But people spending all their earnings on day to day getting by are the most harshly effected. Ironic it was implemented and increased by a Labour government before being cranked again by National decades later.

    Should we have GST ? Convenience says yes. The real world effects of a regressive consumption tax on the other hand – not so convenient.

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  41. rouppe (967 comments) says:

    Due to the number of devices we now have, I was looking for a multi port charger so that we only use 1 power point to charge multiple devices.

    Can’t find anything better than a 2 port charger in NZ. There’s a single port charger on jb hifi at the moment for $34.

    I’ve just bought a 5 port charger from amazon, 8 Amp total output, for about $45. Doubt that I can find anything similar here at all. Of course I’m going to buy overseas when there is nothing available here

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  42. nickb (3,686 comments) says:

    I’ve found customer service from larger online sites (Amazon, Book Depository etc) to be far superior to most NZ stores. If you stick with reputable outfits you’ll generally be fine.

    Anyone who thinks the $400 limit should be reduced is a certifiable retard. I don’t want my taxes to pay for an army of overly officious customs agents riffling through my overseas-based junk to bill me $7.50 of GST.

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  43. burt (8,236 comments) says:

    nickb

    You don’t want them to see it, or you don’t think it’s fair to pay the GST. Can we keep these 2 things separate ?

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  44. nasska (11,277 comments) says:

    burt

    You mean the de luxe self inflating model with optional FF breasts & three way action…..they won’t tell anyone! :)

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  45. mister nui (1,027 comments) says:

    It’s not even just about online purchases we’re we get royally fucked.

    I can go to the US for an annual ski trip, buy a brand new pair of skis and boots, use them for 2 weeks, then come home and sell them for $400 more than I paid for them.

    I know there are huge economies of scale, but we probably have too many people in competition with each other. Some of them just need to wither and die.

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  46. mister nui (1,027 comments) says:

    The other thing is, suppliers here thinking that people won’t buy something because they have determined it high end and too expensive, so they do not import it.

    I was looking at a Sony laptop in the US, with 1TB SSD for something like $2200USD, kicking myself I didn’t buy it. Wen to the Sony store in Newmarket and first they argued with me and told me there was no such thing available and tried to sell me some low rent piece of crap for more than the grunty thing I wanted. Finally, after a bit of argy-bargy, I got them to find what I was looking for and they tell me, oh, we’re not importing that because we don’t think it will sell.

    Not all of us are worn-out hacks working in retail or journalism, we do like to buy what WE can afford, not what you think we can afford.

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  47. themanwhowatches (25 comments) says:

    nickb

    what makes you think the Govt would pay to employ “an army” of customs officers? when did you last experience an “overly officious” customs officer (in New Zealand, not Australia or the US)? And do you know what a “customs agent” is? It’s not a Government official.

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  48. nickb (3,686 comments) says:

    And do you know what a “customs agent” is? It’s not a Government official.

    I mean a NZ Customs employee, obviously

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  49. nickb (3,686 comments) says:

    And DPF, do you really think the likelihood of the $400 threshold being reduced is “zero” when our Minister of Finance is saying things like this?

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11193792

    A bigger threat to New Zealand’s tax base is the increasing use of online retail spending, which avoids the country’s 15 percent goods and services tax, he said. What made both issues murky was that traditional jurisdictions were muddied by the questions over geographical and digital boundaries.

    “The most urgent issue is not the large end of town, it’s the small end of town, it’s hard-working mums and dads spending on the internet,” English told the committee.

    “We have to resolve both of those issues.”

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  50. themanwhowatches (25 comments) says:

    nickb

    you have a reasonable point. I was surprised myself when I saw English reported as saying this, because it seemed to prejudge the results of a working group that is (or was, now apparently “on hold”) considering the very question. but when you look at it, what the devil does it mean – “it’s not the large end of town”…..[what?] “…it’s the small end of town…….hard working mums and dads…..” Political mumbo jumbo, in the end meaning nothing.

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  51. nickb (3,686 comments) says:

    I think by “large end of town” he is meaning the companies like Apple, Facebook etc. And I don’t think its on hold, just folded into a larger review of transfer pricing and international tax / avoidance etc.

    My fear is this will become a political football (mainly due to Labour disseminating so much wrong information to an unsuspecting public) and National will make some bad change to the tax system to be seen to be “doing something”.

    Just like what happened with repeal of provocation and hundreds of other policies introduced since 2008…

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  52. gander (91 comments) says:

    I suspect the leakage of VAT/GST is a nearly universal problem and will likely be addressed internationally at some point. The technology should already be available.

    I don’t think the Retailers’ Association really want the government to come up with an efficient means of collecting GST on smaller international purchases. They want parcels to be held up for long stretches, huge customs fees to be levied, items to be lost, so they can keep on charging as they do. A seamless way of enforcing GST on overseas purchases would prove that it’s not the GST that’s killing them.

    I’m no masochist and I don’t want to pay more tax than necessary – but I’d much rather pay GST than another fifteen points in income tax.

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  53. wrightingright (143 comments) says:

    @Ross12 , I suppose a local optician is still needed to find out numbers for your prescription.

    I might do that soon, just find out what kind it is that I need, then order it online.

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  54. slightlyrighty (2,471 comments) says:

    As a retailer, I do like to give a good level of service, but there is a problem with internet sales. Some customers will go into a shop to get the staff to go through the sales process, to qualify, recommend and basically go through the whole process of sorting out the product suited to the best needs of the customer, only to have that customer leave the shop, and go and buy online from a net based retailer. It’s called “showrooming”. It is hard to counter, especially when you are 15% behind the 8 ball to begin with, and dealing with a competitor who does not need to invest in knowledgeable staff, or a showroom.

    The worst one I had, and that was in January of this year, was the guy who not only bought online after getting me to go through the sales porcess, but then had the temerity to call me after he had received the product because he wanted me to talk him though how to set up the stereo he bought from a net based retailer.

    We have a range if amps that is sold worldwide, and our agents have had complaints from people getting what they thought was a bargain from a net based retailer, only to find you can’t run a 110 volt amp in a 240 watt country.

    Sure, there are bargains to be had, but taking advantage of a helpful and knowledgeable saleman with no intention to buy is a bit beyond the pale.

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  55. chris (644 comments) says:

    I agree slightlyrighty. I would personally never go into a shop and do that with the intention of actually buying it online. I churn through a fair number of running shoes a year. Occasionally I get them fitted, but I’d never go through the fitting process and then walk out without buying. The second pair of the same shoes would most likely be bought online…

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  56. burt (8,236 comments) says:

    gander

    I’m no masochist and I don’t want to pay more tax than necessary – but I’d much rather pay GST than another fifteen points in income tax.

    Well yes, the people spending all their income on basic – they will surely understand why you don’t want that.

    The point here is a tax free margin of earnings basically equivalent to the basic cost of living negates the worst of the regressive nature of GST. Case by case for further relief assessed through the welfare system of course.

    But no… Both our apparently left and right government hopefuls want to tax every dollar earned and every dollar spent. They call this fair…

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  57. MT_Tinman (3,130 comments) says:

    slightlyrighty (2,424 comments) says:
    February 5th, 2014 at 8:46 pm

    Sure, there are bargains to be had, but taking advantage of a helpful and knowledgeable saleman with no intention to buy is a bit beyond the pale.

    Balls! Most commission sales people I know will tell you it is the rule rather than the exception.

    I spent half a year once designing (or correcting other’s designs) aluminium joinery for other people.

    I agree with Big Bruv, retailers generally earn their money but I’ll still buy online if value for money is better

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  58. Peter (1,699 comments) says:

    If show rooming is your problem, why not go internet only? Offer a website that steps people through various options and configurations, thereby mimicking the sales process? If in store is needed, then set it up as a consultancy and get people to pay you for your time. Then point them to the best online deal. If they won’t pay consultancy, then you just saved yourself some trouble.

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  59. big bruv (13,718 comments) says:

    Queen street farmer and Burt.

    Your comments just go to prove my point, clearly you have no idea what it is like to be in retail and clearly you are just a little bit thick.
    Burts comments re the Labour party are just those of a moron and I will not bother addressing those.

    Now, neither of you have taken into consideration any of the following.

    1. Economies of scale
    2. The cost (and it is a cost) of carrying warranties on goods sold in NZ thanks to our unbalanced consumer legislation.
    3. The cost of wages, rent, ACC, holidays, administration, government compliance and rates to name but a few.
    4. Advertising

    I feel that I must repeat myself (because of your stupidity and ignorance), very few retailers are getting rich on what they sell in NZ, certainly many of those who run small retail outlets would not be making a lot at all. This does not mean that I want protectionism, this does not mean that I want to change the way things are done (the GST content is not the issue). All I am doing is pointing out that some of the people who have commented in this thread are clueless when it comes to what the retailer makes in actual profit.

    Will I continue to purchase online…hell yes, will I make stupid comments about NZ businesses “ripping off the customer”…hell no, I will leave that for those who don’t know what the fuck they are talking about.

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  60. burt (8,236 comments) says:

    big bruv

    The costs associated with stocking and selling something that can be purchased via a warehouse online… Well fuck me there are costs associated… Wages and ACC and stuff even. Well bugger me.

    You’re just proving the point. If it costs a lot to run a shop and people are happy to buy you’re products online – you’re in the wrong business. End of story.

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  61. burt (8,236 comments) says:

    Nobody said they get rich, but if their added cost is insulated via tariffs and import taxes then the consumer suffers protecting that retailer. Why ? Is it their right to be a middleman in a supply chain where they simply don’t need to be?

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  62. big bruv (13,718 comments) says:

    burt

    Obviously it seems you are thicker than I had thought.

    Nowhere did I say that these people have a right to be in business, nowhere did I say that they had a right to make a profit, and just so we are crystal clear, I am not defending them either. All I did was point how ill informed (which is a nice way of saying ignorant) some of the comments in this thread are.

    Nobody has a right to be in business, I am surprised that you would even make such a comment, I doubt that any small retailer would make that comment either, these men know just how hard it can be in the world of retail.

    Those retailers who give good customer service will survive, those who deal in low end crap will also survive because we live in a disposable society and for some unfathomable reason many Kiwis like shopping at hell holes such as the Red Shed.
    Like most Kiwis I will continue to shop locally for many items if only because I am an impatient person, if I want something I want it now and will not wait. For certain specialty items such as the previously mentioned shoes then I will still purchase via Amazon.

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  63. Nostalgia-NZ (5,119 comments) says:

    Wake up bb, if something can be purchased on line at a lower price than a retailer who has obviously hiked the price by a few 100% nobody gives a damn about all the self praising crap you are saying about retailers. Either compete or go home. As for warranties, they are throw away considerations – why would somebody pay $60 for an item that they may go through a big drama to have the warranty honoured, rather than $20. Smarten up and get competitive instead of moaning about the playing field.

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  64. wf (428 comments) says:

    I don’t buy big items, but I buy on line often. I get NUUN “electrolyte enhanced drink tabs” via probikekit.co.nz in a pack of 4 tubes x 12, for $25.88. They are shipped from UK.
    One tube at my local bike shop costs $15.

    bookdepository.uk for books – excellent service and despatch. Amazon for kindle.

    Assorted equestrian suppliers and clothiers – all name brands are consistently cheaper and a greater range. Ariat Terrain boots at least $100 cheaper, landed.

    I wanted a dog flap. I could buy one from Amazon $50 cheaper (landed) than the NZ supplier 400ks distant, who would not let me buy by phone, or pay online. They don’t have a website.

    I live in a small town and internet buying is a godsend. I love it. Some businesses seem to know about the $400 limit, and I was surprised to find that I had apparently bought a piece of equipment at a substantial discount according to the customs declaration.

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  65. beautox (420 comments) says:

    If local retailers want a level playing field then they can start by charging $25 or more for shipping and make people wait a week or two for their goods. No, didn’t think so. They want a good old sloped playing field, sloped in their favour.

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  66. big bruv (13,718 comments) says:

    Nostalgia

    “Smarten up and get competitive instead of moaning about the playing field.”

    FFS!….somebody else who is stupid.

    I am NOT in retail Nostalgia. My point is (and really, I did think you were a bit smarter than this) that some of those who have made comments are doing so out of total ignorance (you included).

    Are the prices here higher on a lot of items?….yes indeed.
    Can you buy those cheaper on line?……….yes indeed.

    Does that mean that many local retailers are making a fortune out of what they sell to wiling customers?………..only a moron would think that.

    This thread does make me wonder just how many of the commentators on this blog actually have any idea what it is like to run a business (and for the stupid out there I am talking about ANY business), I make this observation because a disturbing number of them (including some of the more prolific contributors) clearly have no knowledge at all and only demonstrate their ignorance via the comments they make.

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  67. burt (8,236 comments) says:

    Do you need a big hug big bruv, everybody but you is being stupid tonight.

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  68. Bykmad (21 comments) says:

    I run a small Niche business. Internet prices for my product are less than my cost price from the NZ Importer. That is pretty hard to compete with. I frequently have these “cheap shit” products brought into to me to correct or make work properly. When I charge the customer for this service they generally say that it only took a minute to fix, so it should be free of charge. I offer a total back up support for MY products. I will not offer a support package for cheap shit imports. I pay Company Tax, GST, Fringe Benefit Tax, Wages, Rates in Auckland, Insurances, Water Rates, ACC, Rent on the Premises, Petrol Prices etc. I pay tax in NZ, I pay Kiwis. If you buy cheap online, do not expect NZ retailers to support your cheap shit purchases and don’t expect to get your online purchases serviced/repaired, because in all likelyhood the New Zealand supplier has gone to the wall.
    You wonder why we are a low wage Country. We are a small Country and, within reason, if we will not support our own retailers, how the hell can we expect them to pay a good wage to their staff and all the taxes and compliance fees they are liable for. Wake up NZ and especially the Liarbour Party. You cannot Rape the workers and punish the Employers for ever.

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  69. jakejakejake (134 comments) says:

    What the NZRA really wants is us having to go to the post office to collect our Amazon parcels. When we arrived we’ll have to bend over the desk and get reamed with all kinds of collection fees, bio-security levies etc. GST on international online sales is just a bonus since they know that most people are buying overseas where the prices differences is far in excess of 15%.

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  70. itstricky (1,797 comments) says:

    Wake up NZ and especially the Liarbour Party. You cannot Rape the workers and punish the Employers for ever.

    Hi Bykmad,

    In case you’ve just woken up, it’s 2014. National are in charge. They should sort all your problems for you. Good luck.

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  71. tedbear (135 comments) says:

    GST
    Goods Services Tax

    All the goods are from overseas and all the services are from overseas.
    Duh.

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  72. KevinH (1,219 comments) says:

    @slightly rightly, bykmad,
    In the auto business you get tire kickers who are time wasters, the skill is to quickly identify them and move them on as quickly as possible but in a good way. Real buyers tend to have a good look around and don’t ask many questions so you have to get onto them quickly and help them make the choice.
    In so far as internet sales are concerned, if you can’t beat them, join them. It’s huge and you’re missing out if you are not into it.

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  73. Bykmad (21 comments) says:

    Hi Bykmad,

    In case you’ve just woken up, it’s 2014. National are in charge. They should sort all your problems for you. Good luck.

    Itstricky. How stupid are you??? Labour are already starting the bribes. How are they going to pay for them. Oh, sorry, that’s not important is it.
    Most of my comment was to explain internet purchases / NZ businesses and related product support and costs. For Labour to finance their promises by raising taxes and compliance costs will only penalise NZ based businesses more, reduce employment opportunities, force more companies to close, and overall dramatically reduce the Tax take for the Government. For anyone with a small amount of business sense this is obvious. Most Businesses in NZ are small businesses, financed privately and, at the moment, not offering a great return on investment. Cripple the small business, cripple NZ. But then what would I know. I just have a small business.

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  74. unaha-closp (1,158 comments) says:

    One can have a reasonable debate about whether the $400 threshold is at the right level, but there is no practical way to apply GST to foreign companies unless you impound every letter and parcel at the border.

    Here’s an idea for the NZRA members if they are serious, any sale under $400.00 – don’t pass the GST onto the government. Taxpayers union will back them up for sure, unfair taxes and all.

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  75. Jeff83 (745 comments) says:

    I am sorry but I completely disagree with you DPF you can enforce easily.

    Everytime you send a parcel intercountry you have to stick a ‘customs’ sticker which says what is inside it, and its value. This value can be used to charge GST. This is exactly what happens in other countries (i.e. the UK). The VAT invoice is then sent alongside the parcel, and the receiver has to pay it.

    If you do not address this it will be a growing problem as a greater percentage of sales will come from overseas, reducing the tax take, and undermining local retailers.

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  76. slightlyrighty (2,471 comments) says:

    The company I work in has a net based business for conveinience as well as a show room experience, which is fine, but many people are saying, why not go internet only.

    How many people work in retail? How much do they earn? How much do they spend? Now, I’m not saying that you should only buy items in a shop because you are subsidising local employment, but if you get good service, reward it. It’s all part of the product.

    I know for a fact there are some shitty shop assistants out there, and bad shops should get everything they deserve, but a good shop not only provides a good range, good service and good back up, but also paid employment which allows other people the ability to participate in your local economy.

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  77. Nostalgia-NZ (5,119 comments) says:

    bb plenty of abuse but not much substance. Some NZ retailers are making a fortune as can be seen by reading other posts here, particularly in respect of auto parts. However, most, particularly smaller retailers are struggling. In essence your argument is against free trading on the internet, it’s already happening and will continue with both advantages and disadvantages. It won’t be stopped. It must be because you are not involved in retail that you don’t understand that the market rules. I stick with a number of suppliers because of both their products and service. I also buy on line which can be perilous, highly satisfactory or somewhere in the middle. You should realise that a number of retailers using the internet to sell exclusively, or in tandem with physical outlets, sell and market with the same principles of retailers who value their customers, stand by their product and so on. We can’t turn back the clock, it’s adapt or lose.

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  78. Pauleastbay (5,035 comments) says:

    The day of the local store are over. Retail in the future is huge fuck off warehouses where its dispatched by courier to your door, whether this is in New Jersey or Wiri.

    People don’t actually shop at St Lukes they wander around making the place untidy.

    As a consumer we should not be de facto welfare for store owners who have to have x margin to enjoy x life style, the worlds changed . Change or die

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  79. Pauleastbay (5,035 comments) says:

    Jeff83

    Using the UK as an example for anything economically sort of makes your comment redundant.

    And bullshit on undermining the tax take. Factor in the cost of setting up a another “government department of overseas GST” will cost shitloads more than tax gathered. The total GST on the 80 books a year I buy is about $100, they would spend more on stamps trying to get it off me

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  80. Ross12 (1,407 comments) says:

    wf @ 9.57pm

    Your situation , living in a small town and gaining the benefits of online shopping is the same as the major driver for the expansion of the business in China. Those living in the third tier and smaller cities/towns are using online shopping to get the big brand items only available in shops in the first and maybe second tier cities. This applies particularly to clothing and electronics.

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  81. jcuk (668 comments) says:

    The amusing thing about this comment from somebody with a short memory span is that “This disparity exists is because our socialist governments charge Grab, Smash & Take on everything. Not because retaillers are ripping people off.” was introduced by a recognised far right politician …. LOL

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  82. ZenTiger (425 comments) says:

    Online shopping is cheaper than bricks and mortar, and it’s easy to see why.

    The big attraction that shops offer is the ability to browse, try on, test and compare items before making a purchase decision.

    The new problem shops face though, is that people use the shops to do those things, THEN go buy what they want online for cheaper. So their competition is no longer another shop down the road with the same sort of rent and local wages issue, it’s a warehouse in a country paying a fraction for infrastructure. It’s a losing proposition for shops – so they need to factor that in if they are to survive. I don’t know the exact solution to that, but there is room for innovation there.

    Take away all shops and only have internet shopping – and the window-shopping consumer backlash will be massive. Just imagine a loyalty program for purchasing through shops where you get “free entry” to the shop because you’ve spent over $1000 in the last year….

    The ability to tax on overseas purchases is not a hard problem to solve, and it’s not an issue of un-inventing the internet, as someone suggested.. Every time you purchase something from overseas, the banks charge you for it. It’s tied up in your credit card transaction fees and exchange fees. The government could easily whack a transaction charge at that point too, aside from all the promises they’ve made via trade agreements to protect foreign competitors from such things.

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  83. Pauleastbay (5,035 comments) says:

    The government could easily whack a transaction charge at that point too,

    Fuck off government –

    1.and what will the card companies charge the government for this?
    2. Fuck off government having access to my credit card information in case I buy something on line.
    3. This is about retailers whinging, I suggest they do something rather than rely on the government to maintain their lifestyle.
    4. If this was so easy , believe me the government would have done it years ago, they love tax but if its too hard they stay away, so what do you think is the reason they have not tackled this before?.
    5. Labour and the retailers are all gung ho about the tax but they will have done no costings,( labour don’t do costings they just have Walter Mitty open his gob and then retract a week later). So when the costings are done, real costings bricks and mortar ( staff buildings) all that bullshit we will see

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  84. jcuk (668 comments) says:

    I went to my local bricks and mortar store for a small item … we can sell you a 4 pack but the single item is not ava8ilable in NZ came the answer after three weeks.. Went online and had found and ordered the part in five minutes …. why couldn’t the store have done that as part of their existing on-line business?

    In fact the killer to the whole business is the ‘take-over’ by courier firms with their exhorbitant charges and then the racket where the local agents pay the GST to customs and then charge a handling fee for doing so* ….I do not mind paying appropriate taxes but why cannot I pay the amount directly to customs myself

    *I already paid a huge amount to shop it to Auckland which takes 36<48 hours then it takes days to get down to Dunedin … the "she'll B right" attitude of kiwi's ?

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  85. ZenTiger (425 comments) says:

    Pauleastbay, I didn’t say I agree with it, but they could do it. The reasons they haven’t done it before are varied. I alluded to one in my first comment. Another is a bit like the path to introducing GST – other mechanisms existed prior to GST and they finally got around to sorting it out and doing it. The same conversations happening around the world in the 70s and 80s with GST are happening now with transaction taxes, robin hood taxes, tobin taxes etc. They will come. It’s as certain as death, going from some ancient wisdom.

    To answer your points:
    1. Whatever they can get away wth, versus the government’s ability to make them do it for free (I collect GST for the government, I don’t get paid for it, and it costs me money to work it out for them, and they fine me if I don’t work it out fast enough)
    2. Hah hah. You wish. But they don’t need your credit card information, they just need to tax a foreign transaction the bank is making, and let them pass it on.
    3. The ones that survive will have done that.
    4. See above.
    5. Agreed.

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  86. WineOh (630 comments) says:

    It wouldn’t be that hard to implement. There are 20 states within the USA where sales tax is charged by Amazon on the transaction. You just need to extend that to include tax for international destinations based on the dispatch address or billing address.

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  87. jcuk (668 comments) says:

    Slightly Rightly … where are you so I can be sure to avoid somebody who refers to NZ as a 240 watt country LOL

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  88. jcuk (668 comments) says:

    Latest racket by Amazon was to try and charge me $50 in case NZ Customs charged me import duty on the $270 item. I explained that the item would be under our $400 limit but they wouldn’t budge.
    Fortunately I was able to circumvent their system with a Stateside freind.

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  89. jcuk (668 comments) says:

    It is better for me as a taxpayer to have retailers living from hand to mouth than paying more tax to have them on the dole.

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  90. ZenTiger (425 comments) says:

    I have no idea why we still maintain Work and Income offices. Surely, a web site would be sufficient to add benefits to one’s shopping cart, and then go through a secure payment system providing your account details, so they can credit the money directly once you tick the box that says “I’ve been looking for work, I’m not on drugs, I do actually have 15 children living with me, and none of them have shoes, and I am currently living in NZ, it’s just that I use a Ukrainian ISP to protect my privacy”

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  91. jakejakejake (134 comments) says:

    If Royal Mail in the UK charges ~$15 for collecting VAT in the UK, how much could we expect to be charged for GST collection on low value parcels under Labour or a subverted National government? $25? $50? Would the postal workers wear condoms?

    PS: Just paid YouShop NZ$49 shipping for 3 pairs of Levi’s 501s which cost me NZ$41 a pair (~$120 per in NZ) and $31 for a Titan Toro Bravo powerlifting belt ($70 vs the $280 quote from NZ distributor!)..

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