The Australian government has launched an inquiry into online shopping as Australia's big retailers claim they are losing billions of dollars to international websites. Retailers say they are suffering as shoppers spend their Christmas dollars online ordering cheaper goods directly from overseas which avoid sales tax and customs duty.
Online shopping has grown as the Australian dollar has soared to near parity with the US dollar. A report by think tank Access Econmics found up to 24 billion dollars a year is now spent buying goods online from overseas.
The chief executive of the giant Myers department store, Bernie Brookes, said the government was losing 2 billion dollars a year in sales taxes as goods bought online from overseas for under 1,000 dollars are tax free.
"That's unfair to Australian retailers, that's unfair to online Australian sellers and it's not a level playing field," Brookes told Australian Broadcasting Corporation radio.
Australian Retailers' Association executive director Russell Zimmerman said 2010 had been tough. "I have been in the industry for 30 years and I honestly can never remember it being so bad," Mr Zimmerman said.
Consumers are holding back as living costs soar and the economic future seems uncertain. Official figures show retail sales fell 1.1 per cent in October.
Christmas shopping is so slow many stores have started their traditional Boxing Day sales a week early slashing prices by up to 40 per cent.
After a concerted campaign by the big retailers, the government ordered the Productivity Commission to examine the online tax-free arrangement as well as the economic impact of online shopping.
Assistant Treasurer Bill Shorten said there were no plans to drop the tax-free threshold, but there needed to be an analysis of the future of the entire 242-billion-dollar retail industry in Australia.
Consumers advocate Nick Stace of Choice said online shopping was providing real competition to the big retailers and it was up to them to provide cheaper prices and better services to win back shoppers.