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THRESHOLD MOMENT: Billionaires and Bob Brown caught in tax trap as Gillard Government sides with consumers

Gerry Harvey and Sol Lew’s ad campaign demanding the abolition of the GST threshold on imported items has probably been the single most effective advertisement for the benefits of shopping online in Australian history.

Their campaign has been a powerful reminder of the cost-savings available to Australians by shopping around online through sites like eBay and trawling through Google for the best deal.

Their expensive campaign has been an incredible own-goal.

Of course, their demand that the Commonwealth scrap the $1000 GST threshold would hurt value-conscious Aussie mums looking for online bargains and cause massive delays as Customs and the ATO would be forced to open, inspect and assess the value of every single parcel entering the country. It would probably cost the taxpayers much more than the revenue it would raise aside from the damage to the economy caused by massive delays. But of course, that’s why Big Retail wants the GST imposed, it’s not to make the public purse bulge bigger, it’s to shut down a competitor.

The two ageing billionaires Lew and Harvey have made their fortune out of importing goods themselves and are very grumpy individual Australians are cutting them out, depriving them of their ticket-clipping middle-man fortune.

Both Lew and Harvey’s life-work has been to expertly import things they thought would sell. We’re not opposed to that in principle obviously but for them to paint themselves as defenders of the Australian economic interest is laughable.

Our retailers – coupled with peddling easy-to-obtain and extremely expensive in-store credit – have done more than any other group in this country to encourage our occasionally mammoth trade deficits.

Neither of these retailers actually produce much at all themselves, they import stuff, usually from China. They pile it high and sell it for as much as the market can bear. We have seen many examples in recent days – cited by many of the newspapers the billionaires are advertising in – where they charge far too much by comparison to online or overseas retailers who have the same labour and premises costs as they do.

Inspired by the brilliant success of the miners’ direct appeal to the public on the mining tax, Big Retailers have waded in to what have turned out to be some very choppy waters indeed.

They barely got out of the public debate with the responsible government minister and outraged consumer groups alive yesterday.

Herald Sun print edition

It was comedy gold seeing such amateurish nuff-nuffs go up against the government’s most articulate and politically astute minister Bill Shorten.

Harvey and Shorten’s on-air debate exposed just how unreasonable and foolish the billionaire retailers are.

The world is changing and it’s clear Harvey wants the government to do what it could never do politically and makes no sense in terms of efficiently gathering revenue and that is put a GST barrier between online shoppers and the goods they want.

The Big Retailers are in the business of making a profit and a bit of government protection is what most big business types crave and hire government relations folk to obtain.

In Lew’s case, his consigliere (to use the appropriate mafia term) is Michael McLeod, a former adviser to Simon Crean, a minister in the Gillard government. So cosy are the connections that Simon’s brother David Crean is a director of Lew’s company Premier Investments.

McLeod fancies himself as a good spin-doctor and influence-peddler but has as much in common with mums shopping around for online bargains as Her Royal Highness Queen Elizabeth.

The effete consigiliere refuses to go outdoors when it rains in case it spoils the pricey Spanish suede he invariably dons on weekends. He has taken metro-sexuality to heights so prodigious that he should surely merit his own float at this year’s Mardi Gras.

And so it is that his high-priced advice has been so hopelessly wrong.

He has led his boss Sol Lew into an ambush, where he is surrounded by consumer groups, small business, master opportunist Nick Xenophon (who has the ability to sniff out political opportunity like one of those French pigs that can sniff out truffles from miles away) and the government’s most impressive minister.

It wasn’t pretty.

But the best part was that they found a friend.

A friend in the form of retirement-age Greens leader Senator Bob Brown. Yesterday he endorsed the billionaires push for abolishing the GST threshold.

If the reaction on Twitter, Facebook and online comments on news sites was any guide, it was probably his biggest mistake since advocating a death tax.

You rise and fall in politics on the judgements you make every day. There’s rarely a threshold moment.

But perhaps this was Bob Brown’s.

The Greens ideology is very confused but one of its anti-development tenets is ‘localism’. They don’t like globalisation and the imports it brings. They don’t much like exports either, demonstrating consistency if nothing else.

And that seems to have led the strange old man to a very strange old place on the online GST issue.

It’s a rolled-gold opportunity for Labor in the inner-city. Those people they annoyed with an internet filter that was annoying “in principle” they can win back with a really practical issue that will capture the imagination of most high-internet-use voters.

It’s almost refreshing to see the federal government on the popular side of an issue, for once. It’s so unusual to see them standing up defiantly against powerful interests. It’s so exciting to see them firing up for a battle without a focus group, without shilly-shallying.

Their minister has ordered a review – not into whether there ought be a new online tax – into the retail industry as a whole and all of the issues confronting it including issues like shop-trading hours and the introduction by Big Retail of customer-operated scanners that will do much to strip workers out of supermarkets.

So far it’s Bill 1 Billionaires 0 with Bob Brown being sent-off for failing to understand the game.

When the ambitious Greens party hack Senator Sarah Hanson-Young takes aim at Brown’s chosen leadership successor Christine Milne, she will no doubt use this incident as central to her argument for generational change in the extreme-left party that draws on much of its support from young people but has a party leadership old enough to qualify for service on the Chinese Politburo.


Comments are disallowed for this post.

  1. At least I can order Xenical on-line.

    Posted by Looter Lew | January 5, 2011, 12:57
  2. *sigh*

    Beautiful, just beautiful.

    Posted by Da Bitch | January 5, 2011, 13:39
  3. For years big business has espoused the benefits of globalism. Shipping the jobs to cheap sources of labor has done wonders for the shareholders, all was great.
    Now that the flip side has emerged there’s a cry of foul play !!!?
    Isn’t it sweet that for once it’s the average punter that benefits.

    Posted by JustThink4Once | January 5, 2011, 14:02
  4. These guys are billionaire asswipes. You really think Lew, Harvery & Co care about the Government losing GST ?????

    NO!!! It’s about them losing profits !!!

    Bunch of con-men the lot of them.

    Posted by Fcuk you Lew | January 5, 2011, 14:57
  5. Lew has Chinese factories make his rags as cheap as possible, screwing every last cent out of the workers who are banned from forming unions.

    They even sleep on sheets of cardboard in the factory to help cut costs so Lew can buy the rags even cheaper.

    Then Lew imports them into Australia and sells them for as much as he can make.

    Lew doesn’t like competition, so he thinks its unfair people should challenge his sordid empire.

    You are really something Solomon Lew, really something.

    Posted by Chinese Sweatshops-R-Us | January 5, 2011, 15:17
  6. Dear Bill Shorten,

    If you want to be PM, stick it to these billionaires by RAISING the GST threshold to $2,000.

    Be a hero of the little guy – you know them, they are – the VOTERS.

    sincerely, A Citizen.

    Posted by Bill Shorten - Wanna be PM? Do THIS | January 5, 2011, 15:24
  7. Great work Andy.

    These guys just don’t realise that technology has surpassed them – even though they (at least Lew and HN) sell the very items that permit online purchasing!

    Posted by Rampant | January 5, 2011, 16:20
  8. Interesting article! I just now got Coupons of my Favorite Brands for free from “Printapons” you should search for them online

    Posted by gloriasmills | January 5, 2011, 16:42
  9. LeftRightOut says of Bill Shorten, “He sounds like a caracature (sic) of the union thug that he is” William Shorten says, “Bill is considered a joke in the broader community”. If you mean Bill Shorten is a union thug because he stood by the Beaconsfield miners and their families until they were rescued, yes he’s a union thug. If Bill Shorten is considered a joke in the broader community, could you please give a link to the statistics that say this is so. If not, it is only your opinion and an uneducated one at that.

    Posted by Marian Rumens | January 5, 2011, 17:06
  10. Will Lew, Harvey and the other ripoff merchants give back the Economic Stimulus largesse they got courtesy of taxpayers.

    A level playing field? Hang these blokes out to dry and let the rest of us work out how level it needs to be.

    Posted by Quite Right | January 5, 2011, 17:11
  11. Let the free market thrive. Perhaps of some of those silly TV ads were cut they could save some money.

    When I buy electrical and white goods I buy them from my local South Melbourne Retravision store

    Posted by Adrian Jackson | January 5, 2011, 18:14
  12. This all just gives me the sh!ts!

    Posted by Xenical Lew | January 5, 2011, 19:09
  13. Oh dam I’ve shat myself again! Can someone spare new a Depends please?

    Posted by Solly Phew | January 5, 2011, 19:18
  14. At 4:00 pm yesterday, I bought some more stuff on the Internet. It shipped last night from the USA while I slept. I can track it online to see where it is. I paid in $A on my credit card. When it arrives, probably on Monday or Tuesday next week, I will have saved the grand total of $13.46 of GST on my delivered price of $A 134.60. However, what I saved was the hassle of trying to get the same item in Australia which involves waiting four weeks for them to get it in from overseas. Their price $278 including GST plus 1.5% credit card surcharge. Taking the GST off ($25.27), their selling price was $252.73. Now assuming they buy it for the same price as I did and pay the same cost of freight (and they should be getting it cheaper if they buy volume), they marked it up by 88%. For this I have the benefit of warranty. Of course, they have no spare parts in Australia so I’d need to wait for the item to be replaced from overseas. Oh yes, the warranty on the item is 12 months and if it fails, you send it back and a new one is shipped out right away. The cost to me of returning it would be postage of about $15.00 but I’d do it right away.

    Summary: why wait to pay more? Or put in marketing and business lingo: what is the value add that justifies the shopfront store in Australia charging 88% more than the online store in the United States?

    Posted by Giuseppe De Simone | January 5, 2011, 20:38
  15. Gerry Harvey is nothing more than big mouthed self admiring tosser, the sooner he becomes ‘deceased’ the world will become a nicer place.

    Posted by anon | January 5, 2011, 21:47
  16. Joe De Simone is spot on. The costs motive is not the saving of 10% but more like 88%. Like Joe I find that I can source more items free on line.

    Harvey Norman is a hypocrite. I recall that he tried to blackball Compaq Computers because they were setting up a direct sales route to compete with the likes of De3ll. Harvey Norman responded by threatening to withdraw all stock from the shelves. Retail outlets as we know it will soon come to an end with most people opting to purchase direct from the warehouse. The main loser will be the Shopping malls which will be replaced by display barns.

    Posted by Spot on | January 5, 2011, 22:12
  17. Don’t pick on my friend Solly. he hosted a $10000 per head fundraising dinner at his home. Gosh my jaw was sore after all that head I had to give but it raised a lot for my campaign. Please don’t tell my wife Carolyn that I am gay for pay….or that I’ll do it for free if you ask nicely.

    Posted by The Pynester | January 5, 2011, 22:15
  18. So funny, so true. I’m spending tonight trolling around looking for some bargains I only very recently heard are out there – online!

    Posted by WAlian | January 5, 2011, 23:18
  19. Thanks to the Fed govt, the change to digital TV is going to cost us all hundreds of dollars. A new TV or set top box, a new digital recorder and maybe a new antenna. Gerry Harvey should be celebrating. He will make an effing fortune. Greedy prick!

    Posted by Out of pocket taxpayer | January 5, 2011, 23:27
  20. Billionaires:

    1. Screw over suppliers;

    2. Engage in anti-competitive practices to maintain market share;

    3. Charge prices as high as possible due to lack of competition (just ask Bunnings, Coles, Woolworths about that);

    4. Engage in shady employee agreements to force staff to work for a pittance and give up leave etc;

    5. Live in $10M+ homes and have a few dozen more plus private jets, yachts etc.


    Posted by Fcuk you Lew | January 6, 2011, 0:32
  21. I was about to write that Harvey Norman, Myer, Bunnings et al will never see another dollar of mine, but I suddenly realised how long it has been since they had the last.

    I buy online, sure, but more often I buy from smaller Australian retailers who give advice (SERVICE!) from experienced sales people (SERVICE!) and who have clear pricing policies that allow me to make an informed choice.

    F*ck you,
    Harvey Lew,
    You shafted us,
    now it’s OUR turn to screw.

    Posted by Syphologist | January 6, 2011, 0:43
  22. I buy all my electronics from a fantastic online shop in Queensland (hope they aren’t flooded!).

    Pay today and arrives within 48 hours.

    Cheaper by about 25-50% to anything the big retailers sell, dont have to pay shopping centre carpark fees either !!!!

    PLUS this online seller is prepared to sit on the phone with me or exchange emails with technology unsavvy me until I get the things set-up.

    AUSSIE (check), CHEAPER (check), SERVICE (check), HELP SMALL BUSINESS (check)- yep, check those 4 boxes.

    My business goes to a small Aussie battler rather than a billionaires bulging bank account.

    Posted by My 2 cents | January 6, 2011, 1:13
  23. How many accountants/lawyers do Mssrs Lew and Harvey have to keep their taxes down to absolute bare minimum?

    Now they complain struggling mums and dads try to save a couple of dollars and suddenly they want everyone to pay every last cent in tax? Come on fellas, really.

    Posted by Anonymous | January 6, 2011, 1:20
  24. Do they sell flags online so red Ted can practice swimming between them? It’s all Helen Kroger’s fault.If she hadn’t goaded Ted into preferencing Labor he would have lost.Kroger, Howard, Andrews and McNamara.Thanks a lot you lot.

    Posted by robertaa | January 6, 2011, 9:31
  25. Is it true that Ted was not between the flags because he was with the new member for South Barwon who kept trying to get out of the water and the beachgoing public kept wetting him down and pushing him out to sea?

    Posted by Sea Shepherd | January 6, 2011, 10:41
  26. Where the hell is the SDA and it’s leader on this issue?
    If retail jobs are under threat then the shoppies should be all over this story.
    In fact where are the unions at ALL?

    Posted by Missing in action? | January 6, 2011, 11:49
  27. Hey Solly — we haven’t forgotten about the Yannon affair. And what about that high-powered team of accountants and lawyers you employ to ensure you pay the bare minimum legal tax? Nothing like a nice bit of legal tax avoidance is there? But only for you – not the little man.

    Posted by Walter Plinge | January 6, 2011, 14:04
  28. you just keep up your wonderful editorials. I am 69 and absolutely love them.

    Posted by bert wrout | January 6, 2011, 16:00
  29. “Billionaires…Screw over suppliers;…Engage in anti-competitive practices to maintain market share” [FyL], greatly facilitated by our Banana Republic competition “laws”and “enforcement” [yeah, sure]-and the ACCC controller is appointed with the connivance of our premiers. What an alround shambles.

    Posted by Gerard Flood | January 6, 2011, 17:50
  30. I just priced new digital TV’s for my business at Retravision, South Melbourne. Good price $400 to $450 each and some with a DVD player built in with a 22 inch (diagonal)screen. I bet the others can not beat that.

    Posted by Adrian Jackson | January 6, 2011, 18:56
  31. Tell us about Yannon Mr Lew. Why werent you prosecuted???

    Posted by Yannon | January 6, 2011, 19:12
  32. Don’t be soooo mean to my friend, Looter Lew.

    Posted by Mickster McLeod | January 6, 2011, 19:21
  33. Overseas Online shopping is here to stay and with No GST! Simple as that!

    Posted by HARRODS | January 6, 2011, 21:05
  34. I hate Harvey Norman, Clive Peters, Car City, the plant people in the too too, and all the crappy adds for Persian carpets. I also hate the female parrot voiced ads where the “girlie’ screeches at you – you know; whats in the women’s trash mag this week or at the girlie dress shop. They all need to be rounded up, put onto railway wagon and sent to a camp.

    Posted by Adrian Jackson | January 6, 2011, 21:35
  35. the push by the retailers is as absurd as it is obscene: online shopping will fall as the AU$falls – even now it represents 3-4% of sales and as far as we know savings are in jected back into the local market:
    why dont we focus more on the way local retailers in the rag trade exploit outworkers and flog stuff at massive margins

    Posted by kym durance | January 6, 2011, 23:25
  36. In the future there will be display barns similar to Building display rooms where people can come and inspect goods. Limited stock will be on hand and if they want to pay a premium they can but direct from the display barn. Manufactures will pay for display space and people will order on line direct from the warehouse. Places like Harvey Norman will become more and more redundant unless they become the display barn outlet.

    Posted by Display Barns - Best buy direct | January 6, 2011, 23:33
  37. check out the Dear Gerry Harvey group on Facebook…..

    Posted by Zoran Kidney | January 7, 2011, 0:32
  38. Display Barns sound creepy and boring, and require manufacturers to buy space. Why would I go somewhere where dummy newbies are trying to stiff the big boys? Sounds as if we all get screwed wherever we turn.

    Posted by Another layer of middlemen | January 7, 2011, 0:33
  39. Hey Adrian,

    You forgot the crooks from Motor Finance Wizard who deliberately sell overpriced cars to those who can’t possibly afford them. They reposess the cars and pocket the loot the bankrupts couldn’t afford.

    Posted by GFC in the used car business | January 7, 2011, 0:39
  40. So, the Lewtoor’s mate Geriatric Harvey has backed down, poor poor billionaire, life must be soooo tough.

    Posted by Yannon | January 7, 2011, 2:07
  41. Thank you very much for that marvelous article

    Posted by hyip monitoring | January 7, 2011, 4:49
  42. People buy online to save $ after high rent and mortgage payments eat up most income. When will billionares take on the real villians who destroy consumer spending power ? – e.g. the four big banks.

    Posted by Who nicked my buying power? | January 7, 2011, 8:29
  43. Actually display barns are not middle men. They are just display centers.

    Posted by display barns | January 7, 2011, 19:23
  44. I bring in items worth about $25.00AU per time. The GST would be $2.50au. How much time would it take for a customs officer to collect this amount?

    Posted by treehugger | January 7, 2011, 21:36
  45. Gerry may be charging more GST than he could. By providing no payments for months means that interest is included in the price. Interest by itself is GST exempt but not if it is included in the product sale amount. Is Gerry asking the customer to pay extra GST?

    Posted by treehugger | January 7, 2011, 21:39
  46. Dear Display Barns,

    What part of the word ‘middlemen’ don’t you get?

    The Display Barns, in your own words, display products made by others which you will sell as MIDDLEMEN!

    I am mindful you are trying to get free publicity here for an idea that will probably send you and your partners broke. However, that is your business, not mine.

    Posted by Another layer of middlemen | January 7, 2011, 23:46
  47. Gerry Harvey nearly choked on the huge slice of humble pie he had to eat today.

    At least he had the gumption to make a quick exit after realising he had also just lost a big slice of market share. Shoppers are spewing. This will really hurt his business, perhaps terminally.

    Posted by Bollocks | January 7, 2011, 23:56
  48. IAN NORMAN, the reclusive co-founder of the Harvey Norman retail chain with Gerry Harvey, paid himself nearly $15 million in dividends from his private company Dimbulu last year. [SMH]

    I bet Ian is one of a growing crowd of greedy shonks that wish Gerry Harvey would just ‘shut up’ and go away!

    Harvey and Norman, and all the corporate cowboys, live in a mad little separate world of their own with million dollar salaries, dividends and payouts. They are disgusting white-collar crooks.

    Their employees exist on pitances.

    Posted by Another layer of middlemen | January 8, 2011, 0:15
  49. I buy all my doggie snacks for Baci online.

    Posted by Alex Hork | January 8, 2011, 0:44
  50. It is you that is confused. A display centre is not a “middleman”. It is the manufacture displaying their products in a showroom. No different then a trade show except it is a permanent venue. Have you ever been to a trade show? Its just a venue that the manufacture hires space to show off their products and allow users to see, touch and feel their products. You can only buy so much on line without having seen the product. What some of the complaints by retailers is that buyers are going in to their stores, checking out the products and then searching on line for the best price. Fair enough. But so0me where, somehow the manufacture needs to show case their products. A display Barn/Centre is the means/place where they can do it. They do not hold much stock just display products. A common display venue where the manufacture rents space.

    Posted by Display Barns | January 8, 2011, 9:30
  51. Boycott Sol Lew

    Boycott Coles Myer

    Boycott Harvey Norman

    Boycott Target

    What hypocrites these businesses are. How many small businesses have gone to the wall from their predatory pricing? Australian manufacturing is dead thanks to these clowns.

    Now they want to stop us buying on line. Terry McCrann sums up their attitude well in today’s Herald Sun. They belong to the protectionist era of the 1900s, not the 2010s.

    Posted by anon | January 8, 2011, 20:20
  52. Lew ran off to China shipping Aussie jobs to Chinese factories.

    Now he says buy at his stores to keep Aussie workers in a job.


    Posted by Fcuk you Lew | January 8, 2011, 22:01
  53. Hey be fair Vex patriots.

    It is not Looter Lew that imports junk from China – that is son Stevie through Playcorp.

    Posted by All in the family - Playcorp | January 8, 2011, 23:20
  54. Display Barns,


    You say a display centre is not a “middleman”. 999,999 people out of a million would say it was! You are one in a million!

    If I let you display your car for sale in my driveway, according to your logic, I wouldn’t be acting as a middleman. I don’t want to argue with you anymore. My head is getting extremely sore.

    I didn’t want to mention it earlier, but you spell manufacturer as manifacture which kinda throws me every time.

    Good luck with your new middleman venture!

    Posted by Another layer of middlemen | January 8, 2011, 23:23
  55. Something tells me dimwit “Display Barns” won’t go away anytime soon. Myers and Harvey Norman are display barns too since they don’t manufacture the products they sell.

    Aussies have shown in the past week how much they hate the greedy middlemen who have taken us to the cleaners for more than a century. Aussies shopping in California, TV news said tonight, can buy Australian products cheaper over there.

    Australians, given the opportunity, would vent their disgust with tsunamis of loud TV advertising. I was watching a movie on channel Nine just now which was interrupted every few minutes with noisy ads that went on way too long.

    Posted by Bollocks | January 8, 2011, 23:39
  56. The boss of Myer was sooo upset on TV the other night that people were going into Myer, trying out their products and then going online to buy it cheaper.

    Well boo-hoo-hoo to you fool. A person is under an obligation to buy from you are they? Try it on so you have to buy it? Please, you rich pricks really are the scum of the earth.

    Posted by Anonymous | January 9, 2011, 1:27
  57. I love the way all you losers who couldn’t run a chicken raffle moan and complain about people who have built empires out of nothing. Typical Liberal hypocrisy. You want free enterprise and unfetted trade and now you all whine about those who have – through skill, brains and hard work – made a lot of money.

    Go back to attacking the Greens – but then again, you’re envious of their donations!! What a collective of nancy boys you all are. Hypocrites and sooks without talent.

    Posted by Tandy Saggert | January 9, 2011, 10:59
  58. Splendid article . Will definitely copy it to my blog.Thanks.

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  59. I’m not sure that “display barns” would work, but that concept is not the same as a middle-man.

    There is a place in Dandenong Road, Clayton – can’t think of the name – which is a display center for building materials and home renovation products. They don’t *sell* anything there, but provide a location where manufacturers and distributors can showcase their products.

    A middle-man operation would take money on sales. A middle-man is someone who takes money on transactions between the manufacturer and the retailer. An agent is a middle man. A distributor is a middle man. A wholesaler is a middle man. A display center is not, unless sales are being transacted at the point of display.

    Seems like a good idea to me. I’d be able to go somewhere to inspect and compare goods, then order them online from the supplier of my choice.

    Then again, there probably isn’t much need. I’ve got no intention of ever buying from Harvey Norman, Myer, Target, et al again, but I’m perfectly happy to use the b*stards as a display center, then go elsewhere to buy.

    Posted by Syphologist | January 9, 2011, 16:13
  60. Anon 20.20: “How many small businesses have gone to the wall from their predatory pricing? Australian manufacturing is dead thanks to these clowns.” : May I respectfully suggest that you are partly mistaken. The blame for these disasters belongs to our legislators, our political masters, and to us, the electors, for facilitating them; and for our failing to defend the community and the common good. The blame does not primarily belong to business sharks myoptically obeying their function, ie. mostly greed.

    Posted by Gerard Flood | January 9, 2011, 20:37
  61. let’s see how big retail works, they buy off shore, import and sell to the public

    let’s see how online selling works, the public buy direct off shore

    it’s time the public had choice.

    Posted by smell the roses | January 10, 2011, 6:42
  62. Where’s the Broadmeadows pre-selection update Vex, trumped by the Age, twice!

    Posted by Anonymous | January 10, 2011, 10:41
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  64. I don’t know why anyone would ever consider hassling these billionaires over their corporate responsibility to their shareholders. I really don’t understand why any government or citizen would entertain listening to them when it came to public policy either, they are hardly going to be cutting their own throats for an issue of on fair trade now are they?

    Posted by Simon | January 13, 2011, 21:20
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