MENU

Wesfarmers & Woolworths: No problems with GST-free threshold after all

While previous reports had suggested that Coles, owned by Wesfarmers (ASX: WES), and Woolworths (ASX: WOW) were backing a campaign by the Australian National Retailers Association (ANRA) to persuade the government to lower the GST-free threshold on imported goods from $1,000 to $20, according to a report in The Australian Financial Review, the supermarket giants have done an about face and now say bring on the competition!

The change in thinking has certainly left the supermarkets’ discretionary retailing peers, including Harvey Norman (ASX: HVN) and Super Retail Group (ASX: SUL), as well as the ANRA, on the back foot. It’s probably a clever publicity move by the supermarkets, as a much smaller percentage of their sales face direct foreign competition. In comparison, electronics retailers have borne the brunt of online overseas competition and their push to drive up prices for consumers won’t be winning them any friends amongst customers.

Foolish takeaway

Investors shouldn’t expect the dynamic to change all that significantly for retailers if they manage to successfully lobby a lower GST-free threshold. Retailers face much bigger structural issues and challenges and would most likely be better off spending their time focussed on these.

The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!