One of Australia’s most prolific importers of Chinese made clothing and toys, Solomon Lew is now demanding the Commonwealth government reduce the Goods and Services Tax by half and a further reduction in the fuel excise.
The proposal would plunge the Commonwealth into a massive deficit, blowing a $30 billion hole in the government’s finances.
The move is designed to arrest the collapse in consumer confidence that has seen retail sales fall to low levels.
Lew’s acquisition of Just Group, the large apparel retailer, prior to the retail bust has so far cost him hundreds of millions of dollars. Even worse, the shareholders in Just Group who accepted Lew’s part scrip part cash offer have taken a hiding if they’ve held onto stock in Lew’s company.
Lew’s company Premier Investments at the start of the year, mainly supported by the cash it had in the bank, was trading at $8.66 a share. It’s now trading at $3.36, almost certainly the biggest financial wipe-out ever faced by Lew, with around $700 million of shareholders’ money shredded.
Unleashing a gushing torrent of $30 billion worth of taxpayers’ money in his general direction so that consumers are able to spend money on the high-margin imported goods he sells. Lew argues that that cuts on retail taxes would be much better than infrastructure projects which he belittled:
“It’s very nice that they’re building a lot of swimming pools and talking about new parks.
Not every big importer agrees, with Gerry Harvey saying while he hates the GST that it’s “a very fair tax”.