Consumers lose under "internet tax"

[pedleyr]

My experience suggests that people other than retailers or manufacturers really have no idea about what wholesalers or distributors bring in terms of value (well wholesalers probably also know) and so really are forming opinions with incomplete information at best.

All people see is a mark up in the supply chain - they don't see the trading terms, inventory control and as punkin said, the co-ordination of multiple suppliers/manufacturers with retailers. They allow retailers to retail and manufacturers to manufacture without each needing to deal with a multitude of manufacturers and retailers respectively.

In terms of GST, I'm ambivalent about this particular issue. Collection costs may exceed revenue generated and if so it's just a subsidy. But on the other hand we're all aware that we have to pay GST, so for the consumer the source of goods shouldn't change that.

I think the real point is that retailers are kidding themselves if they think it's the GST component alone that is driving demand for products sourced overseas. The price difference very often exceeds the GST component, sometimes significantly. Retailers are in a tough environment and it's only going to get tougher, then the ones that are going to survive and thrive will be the ones that adapt to the changed world and offer a better value proposition to people. I'm glad I'm not a retailer because I've got no idea what that consists of.

 

[pedleyr]

Sorry I should add that strictly speaking consumers don't pay GST, suppliers do, but we're all aware that GST is built into the price of the products we buy.

 

[punkin]

Sorry I should add that strictly speaking consumers don't pay GST, suppliers do, but we're all aware that GST is built into the price of the products we buy.

That's not true. All GST paid is claimed as credit by a retailer and then charged to the consumer. No matter how far down the line it has to go, eventually it's paid by the consumer.

Just makes our prices look artificially inflated as retailers we have to advertise including gst where wholesalers add it at the end.

 

[Donske]

My experience suggests that people other than retailers or manufacturers really have no idea about what wholesalers or distributors bring in terms of value (well wholesalers probably also know) and so really are forming opinions with incomplete information at best.

All people see is a mark up in the supply chain - they don't see the trading terms, inventory control and as punkin said, the co-ordination of multiple suppliers/manufacturers with retailers. They allow retailers to retail and manufacturers to manufacture without each needing to deal with a multitude of manufacturers and retailers respectively.

The other thing I think that people don't realise is that it is a perceived mark up in the supply chain, generally not a real one, a good wholesaler has significant buying power and retailers who use good wholesalers can very often get much cheaper pricing than going direct to the manufacturer even with the wholesaler adding their percentage.

 

[pedleyr]

That's not true. All GST paid is claimed as credit by a retailer and then charged to the consumer. No matter how far down the line it has to go, eventually it's paid by the consumer.

Just makes our prices look artificially inflated as retailers we have to advertise including gst where wholesalers add it at the end.

I only just saw this. It is true. Suppliers pay the tax. Consumers do not get a GST assessment.

Consumers ultimately have the cost passed on to them like all other supplier expenses, which is what you are saying. My comment was just a clarification lest a pedant come along to use a minor point to invalidate the broader one I was making.