Aldi's tax needs 'a good look'

22 Jun, 2015 02:43 PM
Aldi is facing criticism from rival Wesfarmers over how much tax it pays in Australia.
I think someone should go and have a good look at how much tax Aldi pays in this country
Aldi is facing criticism from rival Wesfarmers over how much tax it pays in Australia.

WESFARMERS boss Richard Goyder says foreign-owned supermarkets should pay the same amount of tax as local retailers and suggested that the low-cost German-owned retailer Aldi was not paying its fair share.

Speaking in Melbourne on Monday, the CEO and managing director said new entrants to the Australian market should be on the same "playing field" as Wesfarmers-owned Coles and its competitor Woolworths.

"They should be paying corporate tax in Australia and they should be very transparent," Mr Goyder said, during an address to the American Chamber of Commerce in Australia.

"I think someone should go and have a good look at how much tax Aldi pays in this country."

Mr Goyder also said that the government should not distinguish between small and big businesses on tax policies.

"I don't agree with policies that distinguish between large and small business and I don't agree that there should be a different tax regime for large and small businesses. There should be a lower tax rate for all businesses," Mr Goyder said.

"Why is a new employee in a Wesfamers business today any less valuable than a new employee in a small business? It just doesn't make sense."

Wesfarmers bought the Coles Group in 2007 for $20 billion. More than 70 per cent of Wesfarmers' earnings now come from its retail operations, led by Coles, Bunnings, Kmart and Officeworks.

Wesfarmers, Australia's biggest private-sector employer, last month unveiled plans to invest at least $2 billion into Coles and Bunnings over the next year in an attempt intensify pressure on its arch-rival Woolworths.

The conglomerate said it would use savings from supply-chain reforms and job cuts to reduce shelf prices, refurbish stores, and open about 20 new stores and 50 extra click-and-collect sites across Australia.

A third of Coles customers do not buy fresh food from the supermarket, and the group hopes refurbishments and getting produce from farms into stores more quickly will take business away from independent greengrocers, butchers and bakers.

The group has meanwhile moved investment away from slow-growth businesses in coal, chemicals, industrial services and Target.

Mr Goyder's comments come after a dismal week for Woolworths.

The retailer's CEO Grant O'Brien announced on Wednesday he would step down, just weeks into a three-year plan to increase sales and profits and regain market share lost to Aldi and Coles.

Woolworths last week also downgraded its profits for the second time in four months.

Pressure had mounted on Mr O'Brien, a 28-year Woolworths veteran, because of weakening sales in food and liquor, and growing losses at Masters, its home improvement chain and intended Bunnings competitor.

Mr Goyder became CEO and Managing Director in 2005 and is expected to step down in the next few years, but Wesfarmers chairman Michael Chaney has played down suggestions this could happen sooner rather than later.

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John Carpenter
23/06/2015 7:38:01 AM

I notice that Wesfarmers can't put up a single shred of evidence to support the accusation of tax cheating by Aldi.If you have "good look" at Aldi's tax where does it end?Is the ATO going to have a good look at the tax positions of every MNC operating in Australia?The multinationals are a lot smarter than the bureaucrats and will always find ways to reduce tax which they view as just another cost to be minimised.One easy solution would be to reduce the company tax rate to zero and charge a 30% withholding on all distributions to shareholders.
23/06/2015 8:10:44 AM

Coles has clearly run out of ideas for fighting fair.
23/06/2015 8:19:21 AM

You could be forgiven for thinking that Wesfarmers are on the back foot.............


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