Harvey won't stop at GST: Kogan

Aussie electronics entrepreneur Ruslan Kogan has warned that billionaire retailer Gerry Harvey won't stop at getting his way over GST and duty regulations for offshore retailers, but could ask for additional tariffs or subsidies.

Ruslan Kogan (Ruslan Kogan image by KoganTech, CC 2.0)

Kogan told ZDNet Australia that Gerry Harvey's campaign is missing a crucial point: Australian income tax.

"Does Mr Harvey realise that offshore retailers don't pay Australian income tax either?" Kogan asked.

"Forget about the 10 per cent GST issue, income tax is a 30 per cent charge. This means that a Hong Kong retailer may only pay 10 per cent or 15 per cent tax on his profits, when Harvey Norman pays 30 per cent," Kogan explained.

"Don't be surprised if you hear Gerry asking for subsidies, tariffs or quotas to protect him from international retailers operating in lighter tax jurisdictions," he warned.

Retailers including Myer, David Jones, Harvey Norman and Target have all signed onto a campaign, lobbying the Federal Government to impose the goods and services tax on all goods obtained over the internet.

The bloc of retailers claimed in major newspaper advertisements that failure to act would lead to "a reduction in hours and shifts for casual and part-time workers, and ultimately cost Australians jobs in retail, manufacturing, logistics and related services".

The Productivity Commission has launched an inquiry into the issue.

"The government is taking it seriously by conducting an inquiry. The problem is that Gerry Harvey is used to getting his way, so when the government says that they need to do some research before changing policy, Gerry throws a fit," Kogan said.

"Unfortunately, it appears that he's more interested in lobbying the government than running his own business," he added.

Gerry Harvey told News.com.au today that while Australian shoppers may pay more for their purchases onshore, it was the right thing to do in order to protect local jobs.

"Yes, you might have to pay more, but it's the right thing to do. You'll pay a lot more if we lose jobs and retailers close down," he said.