While sipping on iced tea in Santa Monica it occurred to Nicola Woodward that removing GST from products that promoted sustainability would help them overcome their “too expensive” consumer image

by Nicola Woodward

Thirty six hours in a city is long enough only to form first impressions. My over-arching first impressions of Santa Monica culminated in the words of the self proclaimed greenie Californian Governor Arnold Schwarzenegger “I’ll be back”.

Santa Monica is more or less like Melbourne; more beach and more lifeguards but less surf, more haze but less industrial views, more amusements on the pier but surprisingly less rubbish. There are rubbish and recycling bins every few yards along the beach between the hoards of people under umbrellas and the beach volleyball courts. This is to be expected from the state that prides itself with being at the forefront of everything green.

I tried to scratch the surface and see what the average person thought about the subject of sustainability. I quickly realized there was no such thing as an average person. I happened upon a shop called “The Green Life”. Scott O’Brien, the friendly owner (everyone was In Santa Monica is friendly), has had a tough time with his green store in the height of the economic downturn. He opened the shop a month before the credit crunch hit. The shop has survived, but the plans for expansion have been put on hold, as have those for a refit of the interior.

The shop is a treasure trove of green and sustainable products; the book, Cradle to Cradle sits alongside bottles of chemical free detergents and non-PVC laundry balls. Scott is glad to still be in business. The suburb he lives in has almost half the retail space vacant. The high end stores in Santa Monica have also suffered as there is a flight to cheaper alternatives. He has noticed that people are purchasing goods on upfront cost, not long term value for money. This has stunted his store’s growth. There had been a hope at the beginning of the credit crunch that LA and the surrounds would be cushioned from the worst, but they have been hit hard nonetheless.

Scott remains optimistic. He has survived the hardest of times with products that are unfashionable in a time of false economy. Necessity has been the mother of invention in his business. Reduced cash flow has forced Scott to make savings in ways that he wouldn’t normally have considered. For example, the lack of capital for a fit out has resulted in a minimalist décor underscoring the green premise.

I asked Scott whether he had any help from any level of government for any sustainable practices and the answer was disappointing. Government programs target energy producers, manufacturers of green goods and businesses that expend capital on solar heating and suchlike. He would like to see some support for businesses like his which occupy space in a sustainable way and promote sustainable practices through their products and services.

While sipping on my iced tea on the beach later that day, it occurred to me that there are opportunities to do just that in Australia. How about temporarily removing GST from the purchase of sustainable products? The current argument against choosing green products is that they are more expensive than their non-sustainable counterparts, reducing the GST impost would counteract that to an extent. It would require an Australian Standard to define sustainable products, which if set up correctly could promote local products, create local jobs and ultimately reduce the cost of producing the goods.

It is clear that encouraging sustainable business practices within the retail sector would help property owners by removing some of the risk associated with the ‘pile them high sell them cheap’ retailing as well as fulfilling their own corporate responsibilities.

Nicola Woodward is director, Apex Property Consulting Pty Ltd

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