Lew looks to sidestep GST

Retail veteran Solomon Lew plans to sidestep GST on his company’s products in response to the government’s failure to impose the tax on goods bought online from overseas.

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Products bought from overseas for under $1,000 do not attract a 10 per cent GST charge, and Australian retailers argue changes are needed to create a level playing field.

“As a direct result of government delays and inaction, I have been left with no choice and I will be asking my executive team, in 2015, to find the path to ship online product to customers into Australia GST and duty-free,” Mr Lew told the annual general meeting of Premier Investments, which owns retailers including Just Jeans and Peter Alexander.

It was incomprehensible that government-owned Australia Post can offer a service that ships online purchases from the US, he said, which equates to “the effective avoidance” of GST and customs duties.

The launch of that service in November had prompted Premier Investments to look at getting its products to customers GST-free.

The chief executive of Premier Retail, Mark McInnes, told reporters the company already had operations in New Zealand and Singapore – and soon the UK – that could enable the import of goods under $1,000 into Australia, avoiding GST and customs duties.

Asked why Premier was not already using those overseas companies to bring in goods GST-free, Mr McInnes said the company had desired to be a responsible corporate citizen.

“We at all times have complied with Australian law, and I think we’ve just got to the point where, if the government is not willing to act, we will look after our own interests,” Mr McInnes said.

If Premier moves on this issue, other retailers will follow, he said.

Myer chairman Paul McClintock and Harvey Norman chairman Gerry Harvey are among the many retail bosses who have expressed frustration over the GST loophole.

Mr Lew said the Australian government needed to follow the lead of those in the UK, US, Canada and Europe, who had already acted to ensure fair competition in their retail markets.

“Urgent action is needed to ensure that this vibrant and key component of the Australian economy is able to operate under fair competitive rules,” Mr Lew said.

Premier also said the expansion of its Smiggle stores into the UK market was proceeding very well.

It expects to have more than 25 Smiggle stores trading in the UK by the end of the 2014/15 financial year, and up to 200 UK stores over the next five years.

Smiggle sells stationery, bags, lunch boxes and drink bottles for children.

Premier Investment shares gained 21 cents to $10.65.