The misconception that retailers create jobs

The Australian National Retailers Association (ANRA) argues in its advertisements that:

"We agree with our customers that online retailing is a wonderful convenience that is here to stay....We also agree that fair competition is good for our customers and we want to be able to offer them the same Australian tax exemptions that offshore retailers enjoy".

If this is the case they should squarely ask for a tax reduction, not an increase.

There other argument is:

"These businesses don't pay our taxes, employ our people, train our young people or contribute to our economy...".

The reality is that they also don't use Australian services. Local customers do not have access to the protections of the local companies, so any attempt to levy a tax upon foreign enterprises is an attempt not to increase competition, but to diminish it. Retailers know that if the foreign enterprises were subject to the same taxes, the locals would be able to claw back more sales, or retain higher profit margins.

Some of these companies like Myer have intimated that they "could set up a Chinese distribution centre for online purchases".

I fully encourage them to do that. If that is their business model, they ought to investing in downstream supply channels....they ought to have done it 10 years ago. The reason why they repudiated it is because they did not make good commercial decisions. It ought to have been obvious where the market was going. Instead they thought they could rely on unsustainable government policy. It shows you how unthinking these executives are. They now need to resort to extortion and government favours in order to extract profits from the market...in order to add value to their company options.

The basis of this threat is that Australia will lose jobs by not engaging in this type of tax protectionism. The reality is that we are fed this dirty lie that we need to protect 'low value' retail jobs in order to generate jobs. It is a nonsense. There is no employment crisis in Australia. If there was, the reason would be minimum wages, not a tax on goods and services, or an unlevel playing field. We ought to be allowing the Chinese to be doing what they do best....which is distributing cheap goods and services. The same can be said of call centre jobs. They ought to be outsourced to the Philippines, because that is what they are good at.

The reality is that too many people are not market savvy. They ought to recognise market realities. It is particularly worrisome when retail executives cannot grasp the market realities. I think they have deluded themselves into thinking their profit model was sustainable...perhaps because the value of their land was rising, they thought their profits were real. But they were not seeing the future, where their physical 'show rooms' would become a thing of the past. They ought to be asking 'what is their future value proposition'.

The misconception is that retailers create jobs. The reality is that they create opportunity costs. They enable people to delude themselves into thinking that they have a future in retailing. They don't for the most part; least not mass retailing. The small niche boutique store has a 'market', but it will be very competitive too I suspect. The reality is that the market is compelling us to redefine ourselves; to look for higher value job opportunities. It is actually compelling us to take responsibility for offering the market something of greater value, and to be more successful than if we would otherwise rely on government protection.

"The ads warn that without action, the nation "will see a reduction in hours and shifts for casual and part-time workers, and ultimately cost Australians jobs in retail, manufacturing, logistics and related services".

This appeal to drastic implications is just one of the normal adjustments that industries make. We ought not be retailers....we are worth more than that. Retailers ought to be setting up online businesses, etc. After all, the Chinese are very poor at online marketing. They can make the products, but they do not have the social skills to market them. That is one value-add proposition. The lesson is to find more. So lost jobs is a positive. It will encourage new jobs. Ultimately, our currency is strong for a reason. Our economy is fundamentally strong, and it is also demanding that Australia require more of itself....it would be a pity to sabotage ourselves by shooting ourselves in the foot...with a new tax.