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Kogan

I'm calling Gerry's and Bernie's China bluff

Posted: 06 Dec 2010

You may have seen my recent article published by the ABC titled 'Regulate or Innovate?'.

Soon after this was published, Gerry Harvey announced that he would follow in Myer's footsteps by opening up a China-based website to sell direct to Australian shoppers.

The supposed aim of this store is for Harvey Norman customers to avoid paying GST. Myer boss Bernie Brookes announced similar plans on Friday.

It's an absolute hoax. The cost of sending a product from China to Australia will far outweigh the 10% they save by dodging GST.

Last week, Gerry Harvey was saying that Harvey Norman had no intention of moving online. This week he's announcing a new store based in China. Harvey Norman shareholders must be very tolerant people.

I'm calling their bluffs and going on record as saying I don't think these online sites will ever happen. I think they're nothing more than a political move by Gerry and Bernie to try and get the Government to tax all imports, even those under $1000.

It's clear that traditional retailers are trying to put political pressure on the Government. They are trying to stir up popular unrest by threatening job losses and outsourcing to China. The Government should not respond to this posturing.

There's a better chance that Australia will win The Ashes this summer than Harvey Norman or Myer opening up these stores.

In the highly unlikely event that they do open their stores and keep them open for three months, I will place prominent links on kogan.com directly to Harvey Norman's and Myer's China-based online stores.

What do you think? Do Gerry and Bernie really want Australian shoppers to be able to dodge GST, or are they just trying to pressure the Government?

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