Solomon Lew has made a lot of money from selling cheap stuff from China at very high prices in shopping centres. But the billionaire still isn’t happy and wants internet shopping slugged with a new tax that would cost more to collect than it would raise and would cause tremendous delivery delays for shoppers.
The sight of Jurassic Park era Solomon Lew dinosaur retailer moaning like a stegosaurus about internet retailer making him slightly filthy rich is indeed one of the more amusing aspects of public life.
Lew – a billionaire who has principally made his fortune from importing cheap items from China and selling them at a mark-up higher than one of his white-line fever enfants at a Fashion Festival after-party – took the opportunity to renew his vows at his public company AGM to make life more expensive and less convenient for internet shoppers.
This is in the context of his company’s market cap rising to nearly $1 billion, up hundreds of millions from July this year. It’s not enough, reckons Lew, who is apparently obsessed with websites destroying his greedy business model.
He doesn’t like the internet, principally because it has destroyed his business model of buying – usually exclusively – items from overseas and flogging them to big retailers (preferably to big retailers he controlled with a big shareholding so he could get good deals and get paid first). Now anyone with access to alibaba.com can get in on that caper and many have. The internet is also presenting huge challenges for traditional retail operations.
Government sources tell VEXNEWS that they are well aware of the policy and political folly of proposals to lower the GST threshold on imported items from $1000 to nearly nothing. It would cause massive delays on deliveries as Customs would be required to stop and value many more items, in addition to imposing a new tax on a large number of small purchases, usually made by value-conscious shopper, often mums.
The responsible minister David Bradbury said:
Mr Bradbury said that lowering the threshold to $500 would require 1.23 million parcels to be processed every year, up from 20,000 now. Without reform of parcel processing there could be ”chaos at our borders” if the threshold were suddenly dropped, he said.
And we already have enough trouble at our borders.
In Cabinet discussions, VEXNEWS understands that Lew chum Simon Crean has repeatedly push hard for lowering the threshold. His brother is on the board of Lew’s company Premier Investments although surely such venal concerns wouldn’t trouble him.
Crean recently caused puzzlement in the Jewish community (where Lew professes to have Crean in his pocket) by advocating at Cabinet level UN rewards and benefits for the Palestinian Authority, shortly after they had been showering Israeli civilians with terrorising rockets.
There is a clear trade-off between convenience and value in that situation because the delays that already exist in importing items usually mean at least a couple of weeks before paying for the item and receiving it. Some very savvy European retailers are much faster than that but they are the exception, not the rule.
While the Labor side of politics has been careful to avoid implementing the demands of greedy billionaire retailers like Lew and Gerry Harvey, Lew is reportedly hopeful that a Coalition government – should one be elected late next year – might carry out his wishes.
We doubt they’d be so stupid.
Lew has said jobs are at risk if the government doesn’t give him what he wants.
Of course, the nature of retailing is changing already. There are self-serve scanners rather than check-out chicks in many supermarkets across the country. Many people who like to minimise their human interactions prefer that way. Some don’t.
Dinosaur retailers like Lew are having to deal with the serious problem (which no amount of GST imposing will change) of people visiting stores that are expensive to fit-out and operate to touch and feel products they purchase online. Showrooming, they call it.
The fact is that Lew is clearly unprepared for that problem. And most of his serious competition is actually domestic and is already paying GST on every item sold, just like every other business.
Services like “I want it now” offer delivery times as fast as a few hours after purchase. That’s right, a few hours after purchase.
That’s what Lew is up against.
Making life more difficult and more expensive for internet shoppers is part of his desperate plan. It won’t work but would hurt bargain-concious shoppers and any government that dared slug them with a new tax and many weeks of extra delay on the delivery of their items.