Brought down to earth by the great leveller

Because of my profile, I then get all these threats and people hone in on me. It becomes me, Gerry Harvey, and Solomon Lew – billionaires, greedy, ugly, old, out-of-date c—s, and the people writing this seem to think we have been ripping them off for years and that we deserve this.

HE’S never been one to mince words, has Gerry Harvey. His campaign alongside Myer and Solly Lew against online shopping has resoundingly backfired, buried in an avalanche of angry tweets.

Here, at smh.com.au, the feedback was also fast and infuriated, and mostly anti ”big retail”. All a political freebie for the ambitious Bill Shorten who, as Assistant Treasurer, was able to bat off the big boys and pose as consumer hero.

It’s a fair bet though, given comparative tax regimes overseas, that things will change (there is now no tax on online purchases under $1000). What a contrast to the mining tax debacle where the big miners managed to oust a prime minister with a $7 million ad spend, keep up the lobbying against the revised deal and still look like the good guys. Yes, they are big employers – but not nearly as big as the retailers. Further, they don’t own the minerals but are simply licensed by the taxpayer to dig them out.

What a fine line there is between being a billion-dollar whinger, a la Harvey, and a people’s champion, a la Andrew Forrest.

In part this can be put down to a general understanding that the resources boom underwrites our prosperity as a nation. Further, retail margins in this country have been bloated for too long.

Thanks in large part to Australia’s faraway island status and its population of just

20 million, we are a nation of duopolies. Woolworths/Coles, Lion Nathan/Foster’s, News/Fairfax, Qantas/Virgin, Amcor/Visy.

The consumer often pays over the odds even where there is no duopoly: in banking for one. And while retail has not quite had the spectacular leg-up from government the banks enjoyed, it has had its cash splash.

Like the newspaper industry – whose ad revenues are being shredded by the internet – retailers will have to adjust to the web, the great leveller. There are still cinemas about, despite the advent of the video store. There are still video stores, despite the PC, pay-TV, the internet, the data-phone and the iPad.

Very few people are making a killing online. It is becoming evident that the great leveller is streamlining business and leading to a renaissance of cottage industry: localised transaction sites and special interest websites.

The answer for retailers, just as with any business in any changing environment, is to adapt. There will be more players in the market – this is the upshot of the online revolution, and it is a fine thing for consumers.

Sadly, this is not the case for newspapers, which now struggle to fund long-term investigations, quality journalism, as advertising revenues shrink.

The ad dollar is now spread among myriad online sites rather than concentrated in a few large media companies. That the big retailers, also big advertisers, are under further pressure from online shopping, does not help traditional media, whose costs have come down radically over the past decade already in response to the incursion of the internet.

And where there is demand there will also be supply.

Talking investigative journalism, the feedback flooded in this week in the wake of this newspaper’s expose´ of the tie-ups between the nasal spray erection promoter Advanced Medical Institute and Trio Capital.

Although AMI had forked out tens of millions in advertising and marketing over the years, it dropped itself neatly into administration thanks to $500,000 it owed Fairfax Media in legal costs. AMI had been injuncting the Herald to stop it publishing. OK, media did win the giant’s share of AMI’s ad-spend over the years but where else but newspapers could you find people prepared to spend $500,000 on lawyers in the public interest, and for no apparent commercial return?

We had a call from a bloke who gave his credit card number over the phone. He was told AMI’s treatment would cost ”twenty four ninety five”. It turned up on the bank statement as $2495.

Tip of the iceberg. Apart from the financial chipmonkery by the corporate and legal players behind AMI, a system where salesmen are on 10 per cent commission for dealing with deep human insecurities is one bound to be abused.

The Tax Office was at the creditors’ meeting for AMI this week, as it is with most failed corporate ventures of any meaningful size. Many are the spivs who go bust and, as we have reported with all too alarming regularity, this is done just to wipe out a tax bill and another pesky creditor or two, before emerging phoenix-like from the ashes to start afresh with a new structure.

And if the Tax Office is not yet onto it it might like to check out the failure of a former AMI entity, Whygo, to invoice clients for GST. AMI incidentally built up the successful little teleconferencing business Whygo, while advising clients on matters erectile. It sold the 50 per cent it owned on May 4, 2008. The Herald has seen a number of invoices where – gaining a competitive advantage similar to online shopping sites though not quite as kosher – the company failed to charge GST.