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strateg1c8

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19/06/17

15:24

Post #: 25359555
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Originally posted by JayWin ↑

Amazon may come in on equal business footing, but still slaughter the competition with their low prices and "your margin is my opportunity" style thinking.

You're making 15% on fruits and tomatoes? I'll make 0% and undercut you.
You're making 10% on fresh vegetables? I'll make 0% and undercut you.
You're making 7% on non-perishable / long shelf life goods? I'll make 0% and undercut you.

So, they slay the giants like WOW and WES (power tools at Bunnings, groceries at Coles, office supplies at Officeworks), and make Zero Profit, so they pay Zero Taxes.

This reduces the net tax received from the ATO. Previously, WOW and WES were making billions, and paying 30% of that to the ATO. Amazon comes, takes marketshare, pays nothing because they're making nothing. WOW and WES are no longer profitable, so they pay a lot less too, or maybe zero as well. ATO collects nothing, and then raises Income Tax from individuals to make up for the shortfall.

Consumers may think Amazon coming in is a good thing, there will be heaps of choice, yada yada. But if you think at the big, macro picture, I think it's a Lose-Lose for everyone.

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First time poster...

I found this enjoyable to read and informative. However, if this hypothetical was to happen, by how much do you think the Government would raise income taxes? Would households still be better off in the long run with higher income taxes because their disposable income has fundamentally increased due to a lower cost of goods? It all comes down to what policies the Government implements, and if we could all see the future and know this ahead of time we'd all be rich people...

WOW Price at posting: $25.23 Sentiment: Hold Disclosure: Held
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0 Great analysis

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