Productivity Commissions says online retail impact is "not yet clear"

The Productivity Commission's Issues Paper on the state of the Australian retail industry says the impact of overseas online retailers on local trade is "not yet clear". 

The Fair Imports Alliance, the "coalition of retail and wholesale associations providing a united voice on issues around the low value threshold of imported goods into Australia," has welcomed the Productivity Commission's release of an Issues Paper on the "Economic Structure and Performance of the Australian Retail Industry."

The Alliance's spokesperson Brad Kitschke said ""E-tail isn't the enemy and we want to get that message across. We want more Australian retailers to be engaging in the online space and we are encouraging them to do so."

"But if you look at it simply, if you compared a Hong Kong based online retailer of clothing to an Australian online retailer of clothing, the Hong Kong business has a 20 percent advantage (10 percent GST and 10 percent custom duties) because of the threshold.

"How can an Australian e-tailer compete when overseas counterparts have this kind of head start due to a form of reverse protectionism that punishes Australian businesses operating in a global market?" Kitschke said.

The Issues Paper makes for pretty interesting reading, as it does not lay the blame for retailers' struggles at the feet of offshore online retailers.

Instead, the paper says

"Households' greater preference for saving, a high Australian dollar, the deflation of prices in many sectors, along with other demands for the consumer's dollar, appear to have adversely affected the Australian retail sector. In addition, it is likely that the growth of orders placed with offshore online retailers has had some impact,although the extent of this is not yet clear."

There are plenty more insights in the report and we are sure that it will generate plenty of debate.

The good news is that you're invited to become part of it. Submissions are open to the public and are welcome until May 20th.

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