The Australian Retail Council (ARC) has listed several recommendations ahead of the 2026-27 Federal Budget, including enforcing compliance against ultra-low-cost offshore retailers.
This comes three months before the Australian Government is expected to hand down its Federal Budget for 2026-27.
Across its several recommendations, the ARC is essentially calling for urgent productivity reform, lower costs and safer workplaces. It also marks its first major submission since forming last week.
Regarding cheap offshore platforms, Rodwell said these entities need to be held to the same Australian consumer, privacy and safety laws as local businesses. “We’re seeing other economies take action to ensure confidence in the system is not undermined, and competition is not distorted. The Federal Government and its agencies need to follow suit,” Rodwell said.
Sales for Shein and Temu have surged rapidly over the last few years since they both entered the market. Total Australian sales for Shein have risen by around 20 per cent to $1.22 billion for the year ending December 31, 2024, compared to 2023. This is according to new filings tabled to ASIC from the locally established arm of the global entity, Shein Distribution Australia Pty Ltd. Shein first entered the Australian market in 2022.
Both Shein and Temu are believed to have a combined $4 billion market share in Australia, and are expected to continue growing.
As well as targeting ultra-low-cost offshore platforms, the ARC also wants to see modernised tax settings that can lift investment and competitiveness, a reduction in regulatory impacts that disproportionately affect small retailers and new policies to tackle retail crime.
ARC CEO Chris Rodwell said retail performance is a bellwether for the broader economy.
“Retailers, like households, are under pressure from rising costs,” Rodwell said. “They’re also dealing with escalating regulatory complexity and increasing safety risks. To add to this, they’re navigating rapid structural change, shifting consumer trends, seismic technological change, heightened geopolitical risk and a deteriorating fiscal and monetary policy environment.
“These challenges underline the need for ambitious economic reform that delivers for retailers and households. Sustainable cost of living relief depends on policy reform that reduces unnecessary cost and complexity across the economy.”
Retail employs 1.4 million Australians and makes up almost one-fifth of Australia’s gross domestic product.
Outside of offshore platforms, the ARC’s key focus in its submission is productivity. Rodwell said the best way to help households is by lifting productivity and stopping unnecessary costs from being baked into prices.
“A lift in productivity is also critical to underpin real wage growth, rather than fall into the trap of the artificial and unaffordable ‘above inflation’ wage claims promoted by the union movement,” he said. “History tells us that there is always a deeply uncomfortable reckoning when any economy lives beyond its means for too long. Genuine reform is the antidote to Australia’s economic underperformance.”