A major drag on Aussie retailers

Retail execs asking new government to eliminate the GST-free threshold on online purchases.

a woman

Blame the government. Premier Investments (ASX: PMV) Chairman and former Reserve Bank board member Solomon Lew told the Sydney Morning Herald that the Gillard-Rudd governments are at fault for Australia’s recent boom-bust cycle.

While mining successes over the past years have expanded Oz’s economy exponentially, the retail sector has been left in the dust. With national unemployment rates at a post-recession high of 5.8%, Lew is lamenting the former government’s “complete disregard” for average Aussie companies and jobs.

Current Premier CEO and former David Jones (ASX: DJS) CEO Mark McInnes couldn’t agree more: “80,000 Australians have lost their job in the last five years as a direct result of poor government policy.” Behind any runaway economy is an increasingly valuable currency. For local retailers like Premier, David Jones, and Myer Holdings (ASX: MYR), that meant (and means) consumers’ dollars are worth more abroad than they are in Oz.

That equates to the two scariest words Australian retailers have ever heard: online shopping.

Lew and McInnes are asking the new Abbott government to directly address this consumer shortcut by eliminating the $1,000 GST-free threshold on online purchases. While a $500 shopping spree on Amazon.com might not carry the same magnitude as corporate tax loopholes or secret Swiss bank accounts, Australia is the only developed country to keep international Internet purchases tax-free.

Foolish takeaway

There might be more wrong with retail than tax evasion, but Lew and McInnes have a point. Smart consumers are snagging similar items at cheaper overall costs, and there’s nothing retailers can do. It’s no game changer, but if Abbott is amenable to the revision, retailers will at least find themselves on more level footing from which to compete.

Retailers may be in a hard place, but other Aussie companies are still snagging sustainable sales. 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 Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »