Retail online tax campaign: dumb or just misunderstood?

Competition which brings down prices for consumers is a good thing, right? Not according to some of Australia’s richest retail billionaires.

The tycoons’ campaign against cheaper online imports must be one of the most misconceived – or misunderstood – issue management campaigns in recent history. Overseas online purchases under $1,000 don’t attract 10% GST, which has meant a bonanza for Australia consumers, especially with the Australian dollar at a 28-year high. But some of Australia’s richest retailers decided to launch a high profile issue campaign to scrap the exemption, arguing for a “level playing field” for local companies. Full page issue advertisements carried the headline “Australian retailers fight for a fair go,” but of course they meant a fair go for retailers, not a fair go for consumers. The backlash from the public, news media, industry experts and the blogosphere was loud, angry and often intemperate. And above all, it was utterly predictable.

Every successful issue campaign needs a realistic objective and a strategy aimed at the self-interest of a substantial constituency.  In this case the Federal Government had already made it clear that it had no intention whatever of increasing taxes, declaring that compliance costs would exceed the revenue raised. And the consuming public saw their self-interest in doing the exact opposite to what was proposed.

Campaign spokesperson Gerry Harvey, who built the giant Harvey Norman retail chain on discounted household goods, valiantly tried to persuade the public that “cheap imports” would have a “catastrophic effect” on the future of high street retailing. But within days Harvey was reeling in the face of a “vicious and hateful” personal attack and declared the mission “suicidal.”

While some of his fellow billionaires said the campaign would be sustained and even increased, Harvey conceded that it was badly timed and badly communicated, and that he would step back from his high profile participation.  He even argued that his own retail chain was not much affected by online imports and that the campaign was really being waged on behalf of small businesses.

Federal MP Nick Xenophon jeered that it was ‘like watching Goliath pretending he’s David” and even the powerful Retail Association distanced itself from the campaign. It is still unclear where this issue will go, but the question must be asked: How could some of Australia’s most successful businessmen get it so wrong? 

Perhaps they were panicked by falling Christmas season sales figures.  Perhaps they were trying to soften up investors for disappointing financial results. Perhaps they really believed that consumers would forego tangible savings to prop up some of the country’s largest businesses. Or maybe it really was just a misconceived, mistimed, and mismanaged fiasco.


About managingoutcomes

Issue and crisis management expert
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