Import imbroglio

Australian shoppers spent $23 billion online in 2008 – The catch is, 43 per cent of this spend went overseas, with UK and US e-tailers reaping the benefits. And when you crunch the numbers, it’s little wonder why...

I’ve discussed this before, but now the protest about consumers being allowed to import up to $1000 worth of goods duty and GST free is gathering strength.

We can thank or blame the internet – depending on which seat in the market you occupy. The goods can come from anywhere and can be supplied from a retailer, wholesaler or factory. Higher-priced goods are likely to attract more customers than lower-cost goods.

There’s no point importing a five dollar t-shirt when you can buy one locally for nine. Designer garments, along with goods such as cosmetics really represent a significant saving.

Soon to lobby against the continuation of duty and GST-free imports under $1000 is the Australian Retailers Association. Executive director Russell Zimmerman says he’s been aware of the problem for some time but only recently have a number of his members actually voiced their opposition to the law.

They especially object to consumers doing their sighting and sizing and trying on in Australian shops to make sure heir subsequent online purchase is correct. If the goods turn out to be unsatisfactory, many consumers will try to return them to local retailers or search out the Australian distributor and throw a tantrum there.

The importer of upmarket jeans brand True Religion suffers considerably at the hands of the lower-priced import equivalent. The jeans are tried on, say, at David Jones, and then bought from a low-margin retailer overseas. Some of these retailers even throw in freight to sweeten the deal. This importer estimates that he, and his retail customers, lose sales of well over 5000 pairs of True Religion jeans a year because of internet-driven private imports.

The Retailers Association is likely to tackle the problem from two angles. One would be a campaign to warn consumers of the risk of  importing if the goods turned out to be unsatisfactory. The other would be to lobby the Federal Government to restrict the duty and GST-free imports to genuine samples (also under $1000) or returning travellers who have bought goods as tourists.

I’d be surprised if the current protesters to the importation did not include David Jones and Myer, the homes of many expensive brands. If not, they should join the gang before they become the dumb assistant to helping their overseas competitors sell through the internet.

Another point: duty and GST on clothing is worth 20 per cent to the Government. Do we have so much money in the public purse that we don’t need the multi millions of dollars that closing this loophole would bring?

All aboard the defence bandwagon

How many people can you fit on to a bandwagon about defence uniform fabric?  When the news broke that Australian soldiers would have to go to war in uniforms made from Chinese fabric there was a stampede to clamber aboard. Australian Defence Association executive director Neil James was quoted as saying: “Do we seriously expect our soldiers to fight a war dressed in a uniform made in China? There’s a simple dignity issue and also crucial national security concerns.”

Imagine a soldier throwing a wobbly because he’s wearing Chinese fabric when probably every other garment in he and his family’s wardrobe is totally made in China.

Next up the ladder was Sophie Mirabella, the Opposition industry spokesperson, (her electorate includes Bruck Mills) who said the decision was outrageous. “It’s dangerous, unpatriotic and tawdry for the Government to save a few dollars and buy the fabric overseas,” she said.

The few dollars are more than a few, let me tell you Sophie. While the fabric costs are considerably higher if made in Wangaratta by Bruck Mills, the cost to the Government of keeping Bruck’s doors open to weave the fabric is even higher. No wonder Bruck CEO Alan Williamson remained schtum. There’s a can of worms under his desk that he doesn’t want opened.

Greg Combet then climbed aboard, grabbed the megaphone and announced that, oops, there’d been a rethink and Bruck had been given back its contract. He blamed the Chinese for not being able to impart the correct secret qualities to the fabric, and for running seven months late.

More people climbed up. Those who’d lost relatives in Afghanistan made emotional speeches about the fabric. Some said it was an insult to wear Chinese fabric. The RSL got a few minutes with the megaphone. Then Jennifer Ward, whose son Benjamin Ranaudo was killed in Afghanistan last year, said the cost-cutting strategy was going too far and that soldiers would be annoyed if their uniforms started falling apart. Whoa!

Inherent in these protests is total ignorance about the quality of Chinese fabric and garments. They don’t fall apart. They represent the best quality/value equation in the world.