GST loophole costs millions

Eddie Peters and  Gerry Hanssen (front) with Rex McCrae, Brian Simpson and David Goode. Picture: Joel Kelly
Eddie Peters and Gerry Hanssen (front) with Rex McCrae, Brian Simpson and David Goode. Picture: Joel Kelly

THE We Can’t Wait campaign has launched, with local businesses showing “dodgy invoices” they say are losing the Federal Government millions of dollars in revenue.

The campaign, organised by the Swan Chamber of Commerce, local business owner Eddie Peters and developer Gerry Hanssen, is seeking the immediate scrapping of the GST-free threshold of $1000 for goods bought overseas.

Morley business owner Brian Simpson, who sells model helicopters and planes, said invoices on items bought from a supplier overseas had been marked down by up to 140 per cent to avoid the supplier paying GST.

“I didn’t ask the suppliers to write down the lower cost of the goods and I don’t get them every day but I am certainly seeing these every three days or so,” he said.

Mr Peters agreed that in his business, “invoices on imports were also written down by suppliers” to make costs cheaper.

“The down side of this is the GST is not paid to the government until we sell the item and then charge GST on it,” he said.

“The GST should be paid on the imports as well.”

Mr Peters said he had been contacted by Australian retail industry groups who had told him, “we are bleeding”.

“Business has never been this bad,” he said.

On the matter of the collection of the GST, the campaign organisers had a suggestion for the Federal Government.

Swan Chamber member and financial broker David Goode said it could be implemented just as the old financial institutions duty (FID) and bank account debits (BAD) taxes were, before the GST was introduced.

“Banks only need to implement a new three-digit code for the collection of the GST and people can pay on purchase as California does in the United States,” Mr Goode said.

“It can even be done on a smartphone because the process is a simple transaction and we would prefer to see the banks collect this than the offer of Australia Post doing so on incoming parcels.”

Mr Goodes said the formulae was badly broken for the GST and needed to be fixed.

He said bureaucracy was the biggest stumbling block to the immediate scrapping of the GST-free threshold.

“Treasury has to move quickly on this and implement the new collection system much sooner than July 2017,” he said.

Campaign organisers said they were concerned that 44 Australian businesses were closing every day in the present climate.

Midland business owner Graeme Harris said he did not know who would employ his grown children and their children in future generations.

“I’ve been in business 30-odd years and it is no longer viable,” he told the Chamber. “What concerns me is the future where there will be no more small business anymore.

“We will be run by overseas major nationals.”

Supporters of the Swan Chamber campaign include the Australian Sporting Goods Association, which sent a letter of support to the Chamber saying they “supported any moves to bring the date of implementation forward” on the GST-free threshold.

Wesfarmers chief executive Richard Goyder has also been vocal, saying if “we have to pay GST, everyone should have to pay GST, it’s as simple as that”.

Blogger and columnist Dennis Price said the retail landscape was currently littered with failures, from outright bankruptcy to strategic retreats, listing Treehouse Children’s Decor, Crazy Clark’s, Sam’s Warehouse, Pie Face, Ksubi, Man2Man, Clive Peeters, Kleenmaid, Perfume Empire, Payless Shoes, Darrell Lea, Starbucks, Krispy Kreme and Video Ezy.

Australian Retailers Association executivedirector Russell Zimmerman said he was totally behind the Swan Chamber Campaign.

“Please add the ARA’s support to this campaign,” he wrote from the UK.