Who will cop the blame for Amazon’s refusal to send to Australia?

Amazon Australia GST retail
Australians spend around A$5 billion a year on overseas online retail purchases.

If there is one thing that Australians love, it is a bit of online shopping.

Indeed we spend around A$25 billion a year on online retail, with offshore retailers accounting for about 20 per cent of that total.

So the news that Amazon will refuse to allow Australians to ship products from its US and UK online stores after July 1 has really got a lot of people fired up – particularly those accustomed to buying items that are either impossible or very expensive to source locally.

The question that hasn’t been answered so far is who will cop the blame for this very annoying development – the Federal Government or Amazon?

While the decision to block Australians and refer them to Amazon’s (so far) grossly inferior and more costly Australian online store was entirely made by Amazon, the genesis for that decision was the Federal Government’s controversial decision to apply the GST to online purchases under A$1,000 after July 1.

Amazon – which campaigned very hard against that decision – has decided the administrative burden of collecting the GST from Australian customers and then paying it to the Australian tax office is too difficult.

Complicating the picture further, Australian retailers – most notably Gerry Harvey of Harvey Norman fame – campaigned strongly in favour of forcing the GST to apply to online retailers for small purchases to produce what he called a level playing field.

So those who feel that Australian retailers are too expensive and don’t have a good enough range or online presence will want a scapegoat, which may well come in the form of Liberal and National Party candidates at the forthcoming five “super Saturday” by-elections to be held on July 28.

Which is why Treasurer Scott Morrison has been so upfront and vocal in trying to put all of the blame at the feet of Amazon, using the line that he wants companies to pay their tax.

“The second biggest company in the world, run by the richest man in the world (Jeff Bezos) shouldn’t get a leave pass from paying tax in Australia,” Mr Morrison said.

“If multinationals aren’t forced to pay their fair share of tax, they will have a competitive advantage over retailers here in Australia,” he said.

All of which is more than a bit misleading because with GST it is the customer who pays the tax – the business is merely stuck with the administrative job of collecting and remitting it.

The Amazon change is quite a big one too with Citi analysts estimating that Australians spend between $500 million and $700 million on Amazon annually.

While that is a drop in the international bucket for Amazon, it represents a significant number of potentially angry voters in the five electorates – not all of which have Liberal and National Party candidates – particularly as by-elections are often seen as a chance to lodge a protest vote.

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