Australia’s retail industry is the second biggest employer after the healthcare sector.
It has been shedding tens of thousands of jobs over the past year, and retailers are now trying to get themselves in shape for the arrival of Amazon, which can be expected to steal market share from domestic companies and further pressure margins in an environment where retail turnover has been sluggish because household budgets are under pressure.
On our latest episode of our economics podcast Devils and Details, we asked federal treasurer Scott Morrison for his views on the arrival of the American behemoth and the threat it posed to local companies.
Morrison pointed out that disruption from foreign retail entrants was an issue for advanced economies around the world and said that while the government would continue to work on effective tax policies for multinationals to ensure federal revenues were protected, he would welcome the benefits for shoppers.
“Let’s sort of go back to first principles,” Morrison said. “The first issue is that the consumer always comes first.”
He said the government had already introduced some legislative protection for local retailers through GST threshold adjustments, but “at the end of the day, it’s not the government’s job to effectively remove competition from the retail sector,” he said.
“In the same way we’ve acted on things like multinational tax, and we have some of the toughest, if not the toughest, multinational tax avoidance laws anywhere in the world today. Our diverted profits tax came into being on the first of July this year… Our multinational anti-avoidance laws were the product not just of our own work, but working with other countries because, across the G20 in particular, we understand the pressures on all of these countries’ tax bases.
“Whether digitization of the economy or the disruption we’re seeing from large players, you need a coordinated and concerted effort across economies to get a clear set of rules, which says to these guys, ‘Well, you exist, but don’t think you get to just work around everybody’s tax systems and regulatory systems because you’re big enough and ugly enough to do that’.”
Ultimately, he said, “I always assess competition policy by what’s best for the customer. Look, if they win, then that’s good for your economy.”
You can find the show on iTunes or your preferred podcast platform — or listen in below.
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