The push by some Australian retailers for the government to apply GST on overseas retail purchases continues in earnest, despite the cost of the proposals. While the Productivity Commission found that imposing a GST on overseas goods would cost Australians more than $1.5 billion (raising $550 million but costing more than $2 billion to collect), that isn’t stopping some of Australia’s richest people from attempting to coax the government to ensure their fat retail margins remain protected.

Given the cost of collecting the tax is greater than the revenue generated, imposing the GST would appear to be a direct transfer of wealth from taxpayers to wealthy retailers.

Recently, Graham Turning, the founder of Flight Centre, added to the calls of fellow Rich List members Solly Lew and Gerry Harvey, to remove the $1000 tax-free threshold for overseas purchases. Turner claimed that the threshold “is going destroy our retail industry … you can see it happening before our eyes”.

Turner wasn’t referring to Flight Centre, which is not affected by the GST rules, but rather, its wholly owned subsidiary 99 Bikes. Turner pointed to British retailer Wiggle, which generates sales from Australia, and was recently sold to private equity investors for $281 million.

Turner’s arguments do not make a huge amount of sense. For a start, a large proportion of revenue generated from bike sales by Wiggle cost more than $1000 anyway, so GST would be applied anyway. A quick look at 99 Bikes’ “Road” selection indicates that all bikes available cost more than $1000, with many above $6000.

Comparing the prices of the two sites was slightly difficult as they stock different items. One line that both stores stocked was a Mongoose BMX bike, but even then a valid price comparison was not possible as Wiggle stocked 2012 lines, whereas 99 Designs was still selling last year’s model.

Turner told The Australian Financial Review: “If … our Customs service are so incompetent that every other country in the world can collect this tax and we can’t, I think it is some kind of whitewash.” While not casting judgment on the efficacy of Australia’s Customs service, it seems that they are not to blame here. As this column observed last year, the cost differential for items available from Australian retailers is often far more than the 10% GST applied. Often, the price of items in Australia is double that available from overseas vendors.

Instead of focusing attention on the relatively minor GST argument, the views of Premier Brands boss Mark McInnes appear closer to the mark. McInnes, who last year was appointed by Lew to run his retail business including Just Jeans, Jay Jays and Peter Alexander, blamed Australia’s high retail rents (and Australia’s relatively high wage levels) for the profitability woes of retailers. McInnes noted in September that “it’s not in our shareholders’ interest to run a loss-making store where the only person making profit out of our sales is the landlord … we don’t come to work every day just to make money for the landlord, we are trying to find a balance in the relationship with landlords where our shareholders make money and they get a return on their equity”.

In time, Australia’s high rentals will self-adjust. As the loss of Borders, Colorado, Angus & Robertson, Bettina Liano and more will show, landlords will be forced to reduce rents, or face vacancies. The market will ensure efficiently run retailers will survive. No longer will retailers be able to enjoy gross margins of 50% or more, when nimble overseas-based competitors with lower overheads and more efficient models can sell the same item for 30% less.

Unless businessmen such as Turner start focusing on their own flawed business models, a 10% GST will be the least of their concerns.