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Myer CEO Bernie Brookes has stirred up a social media storm saying the new Medicare levy would result in less spending at its stores. According to Brookes, making Aussies spend an extra dollar a day on the levy will result in them spending less at Myer.
While it’s uncertain whether the levy would have caused people to spend less at Myer, Brookes’ comments may have done the job for him, with Myer trending all over Twitter, the hashtag #BoycottMyer being created, and all kinds of hell being raised on the Myer Facebook page.
What happened?
On Wednesday, Prime Minister Julia Gillard announced a plan to raise the Medicare levy by 0.5% to 2% from July 2014, as a way of funding the National Disability Insurance Scheme. Later that day, Brookes told a Macquarie Investment seminar that the average $350 extra people would have to pay for the levy “is something they would have spent with us”.
Just a few little words – that caused a very big backlash.
The Reaction
The media reacted to Brookes’ comments, and the news swept across social media. The #BoycottMyer hashtag was created, and social media commentators started flexing their muscles.
Comedian and disability advocate Stella Young tweeted, “Oh come ON! Seriously?… DISABLED PEOPLE ARE YOUR CUSTOMERS TOO! #BoycottMyer #NDIS”
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Clik here to view.Deirdre Rose tweeted, “#BernieBrookes concerns will become a self fulfilling prophesy. I wont shop at #Myer again. And its entirely his own fault. #boycottmyer”
The Myer Facebook page also saw its fair share of action from angry consumers.
What Myer said next
In the face this consumer backlash, Myer apologised “to those who may have been offended or hurt”, but refused to back down on its argument that the levy would be bad for business.
On Thursday morning, Brookes said in an emailed statement, “I want to make it clear that Myer supports the introduction of an NDIS.”
“As a business, we are sensitive to imposts on the consumer by the government as this adds to negative consumer sentiment and that adversely impacts sales, profit and jobs. Ideally, we would like any government initiative to be funded within the revenue stream it has, rather than through a new or additional tax take.”
But that didn’t help
It seemed Brookes’ apologies were not enough to calm the fires. Indeed, it seemed to enrage some social media users even more.
Posting a response on the Myer Facebook page, Rachelle Cooke said, “I don’t think it is appropriate or professional for your company to be making political statements. I don’t feel it will be good for your consumer sentiment. Disappointing Myer.”
Critics also pointed out that Brookes was awarded a salary increase to $1.8 million in 2011, and therefore knew nothing about the financial suffering of those who were in need of the NDIS.
Was Myer right?
Other retailers have agreed with Myer, saying that the levy would limit consumers’ discretionary spending and decrease confidence – although none seem to have been as vocal as Myer.
Chief executive of the Australian Retailers Association Russell Zimmerman also agreed the levy would impact retailers.
“It’s our view that once there is a levy or an increased tax put on people, this removes more of their discretionary spending funds,” he said. “For people making $50,000 a year, the Medicare levy would cost them around $300. This impact on consumers will have an impact on retailers.” At this point in the story, Quid began to wonder how much the existing Medicare might be impacting retailers. Scrapping it altogether would surely release more money for people to spend in stores.
Not off the hook
Whether or not Myer was right about the impact on retailers, most people would agree Brookes probably shouldn’t have mentioned it. By putting its profits before social reform, Myer may have chased away more profits than the levy itself ever would have.
Charlie Pickering: “Australians supported by #NDIS will be able to engage in the workforce and the economy. I just doubt they’ll shop at @Myer_MyStore”.
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