Myer chief blasts 'unfairness' of GST-free threshold
Myer chief executive Bernie Brookes (left) and chairman Paul McClintock after the annual meeting. Photo: Jesse Marlow
RECENTLY appointed Myer chairman Paul McClintock has hit out at the ''incredible unfairness'' of the $1000 GST-free threshold enjoyed by overseas online retailers, labelling it a loophole that must be closed, but remains confident the federal government will finally tackle the vexing tax issue next year.
Addressing shareholders at the department store's annual meeting on Friday, Mr McClintock took a wider shot at the government on policy issues such as industrial relations and the carbon tax for hobbling the corporate sector in Australia.
He also moved to head off any shareholder unrest about changes to the remuneration scheme for senior Myer executives in which their base pay, in many instances, will increase from next year and includes a shift in the hurdles to win bonuses. He assured investors the newly designed structure would better align shareholder interests, improve staff retention and was more suited to the new macro-economic environment.
The shareholder meeting came as Myer readies for its key Christmas trading period where more than 30 per cent of its earnings can be generated, with Mr McClintock arguing the taxes and charges levied on businesses combined with weak consumer confidence was making its job harder.
''Additional taxes and charges such as the carbon tax and the flood levy on the consumer certainly impact the discretionary retail sector, and current industrial relations settings have significantly increased our costs,'' he said.
Mr McClintock, who succeeded Howard McDonald as chairman of Myer in October, then took specific aim at the GST-free threshold extended to overseas online retailers.
''As a company, we are still frustrated by the duty and GST loophole that exists that provides overseas online retailers with an advantage over local retailers. The internet has broken down traditional trade barriers and it is critical that reforms keep pace to ensure our local businesses are competitive,'' he said.
This week retail mogul and chairman of Premier Investments, Solomon Lew, also lambasted the federal government for failing to slash or throw out the $1000 GST-free threshold, arguing it would cost as many as 30,000 jobs in the retail sector and send many business to the wall.
''It is very hard to compete when your own government is on the side of foreign competitors,'' Mr Lew said this week at the AGM for Premier, which owns retail chains such as Just Jeans, Peter Alexander and Smiggle.
Mr McClintock was more diplomatic in his condemnation of the GST issue, saying he was comforted by the fact that state governments, which receive the bulk of GST revenue, have now also acknowledged something must be done about the online tax issue.
''It's tremendously important for state governments as well as our industry that the [federal] government moves effectively and quickly to close the loophole, it really is incredibly unfair to have a situation where people can do exactly the same transaction in different ways and have different tax consequences.''
Mr McClintock doubted suggestions 30,000 jobs could disappear because of the GST-free threshold, because he believed the problem would soon be resolved in the favour of domestic retailers.
''Well, my prediction is that it will be fixed, so we won't lose the jobs.''
Turning to Christmas trading, chief executive Bernie Brookes said he was still expecting a flat Christmas as consumer sentiment remained low.
''Christmas looks good. We have been predicting consistently a flat Christmas but we are ready if Christmas does fire a bit better than that. We have stock availability and casual staff we can bring in.''
Sales of cosmetic gift packs were going well, especially online, and Christmas trees and wrapping were also above last year, he said.