Government pours millions into online retail study

The Federal Government has committed $2.1 million to studying Australians' online retail spending habits, and how online sales might be affecting bricks and mortar stores.

The funding will be provided over four years to the Australian Bureau of Statistics (ABS) to study spending data from both local and overseas online retailers as well as bricks and mortar outlets with online operations.

Assistant Treasurer David Bradbury said the research would help provide accurate online sales data. 

“The retail sector is a major employer and contributor to the Australian economy,” Bradbury said in a statement.

“While it faces a number of significant challenges, online retailing presents enormous opportunities for traditional bricks and mortar retailers to expand and innovate.”

“It also provides Australian consumers with access to greater choice and competitive pricing.”

According to Australia's Productivity Commission, online retail remains a relatively small market locally, accounting for about six percent of retail spending.

The Productivity Commission expects online retail to grow further in popularity over the coming years. The first results of the ABS study will be reported in November 2013, with a preliminary paper to be released early next year.

Death of traditional retail?

The "competitive pricing" aspect of online retail noted by Bradbury has previously raised the ire of traditional retailers, sparking a vocal campaign by the likes of Harvey Norman owner Gerry Harvey, proclaiming online as the death of traditional retail.

Harvey has held a long-running battle against international online retailers and their ability to bypass the local goods and services tax. 

Last January, Harvey and a group of retailers lobbied the Government to lower the GST-free threshold on goods and services purchased online from overseas, claiming Australian bricks and mortar stores were being driven out of business by customer going online in search of lower prices.

Harvey today called the Government initiative a waste of time and money.

"They’re taking us all for a ride," he told CRN. "If it was me, I’d want to know quickly how many parcels are coming into Australia, how many dollars, and what people are buying."

"If you put a crack team of people on that you can come up with an approximate answer within four weeks. Even if they were 10 percent out, either way it doesn’t matter because you’d have the big picture.

"As soon as you’ve got that, you would then look at that and decide whether there should be policy around it - that’s urgent. This is not urgent."

The announcement comes just days after the Government made public submissions to its inquiry on IT pricing in Australia.

The inquiry was formed to establish whether price discrepancies exist with hardware and software products sold locally compared to overseas. 

The GST debate featured strongly in the 72 submissions, made by both consumer and retailers alike.