Gerry Harvey calls for more taxes, but suppliers and consumers disagree

By Patrick Avenell

SYDNEY, NSW: Overseas electronics and whitegoods purchased over the internet should be subject to taxation, according to Harvey Norman chairman Gerry Harvey, who spoke passionately about the challenges facing traditional retail models at the company’s annual general meeting yesterday.

Talking about these low-cost websites, Harvey was quoted by the ABC saying, “They don't pay any taxes, they haven't got any overheads, there's incremental sales and that's where they make their money… A good government would look at it, anticipate the problems, and start doing something about it.

“They wouldn't sit there and just ignore it and say it's too hard. But guess what they'll do. They'll sit there, they'll ignore it, it'll be too difficult, they'll make excuses, then later on [say] 'Oh yes we should have done something back there. I wish we'd been a bit smarter'.”

One key industry figure that does not totally share Harvey’s view is Hagemeyer CEO Mark Bilton. Hagemeyer is the brand owner of JVC, Omega, Blanco and Die Dietrich, amongst others. Bilton said taxation may not be the best way forward, highlighting the need for retailers and suppliers to adapt to new conditions.

“We are all affected by an offshore on-line presence, however, I am not sure taxing to protect an existing model is appropriate,” Bilton said. “However, lowering the GST threshold to even the playing field for higher priced items would make sense.”

“Brand owners and suppliers are facing challenges from parallel importers and offshore sellers as well.
Consumers buying habits have changed, therefore we all have to change, those that embrace that change, and lead the innovation, will succeed.

“On-line is not going away, in fact it is only going to get stronger. It is the nature of a dynamic marketplace.”

If Harvey thought that this view would resonate with Australian consumers, he was mistaken, with keyboard warriors across Australia ridiculing Harvey for asking for the pitch to be prepared to suit his style of play.

Within hours of Harvey making these comments, ‘Gerry Harvey’ was trending nationally on Twitter, with almost every single post taking an opposing view. The most common criticism of Harvey Norman was that its own website was terribly outdated.

What’s your view on Harvey’s taxation idea? Send me an email.

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