More flexibility in workplace rules and trading hours and changes to planning and zoning regulations are required, according to an eagerly anticipated retail report revealed today.
In the Government commissioned review on the Economic Structure and Performance of the Australian Retail Industry, the Productivity Commission supported many reforms for the industry - which has faced a plethora of challenges in recent times.
The Commission proposes that retail trading hours should be fully deregulated in all states, and said there is scope to improve the retail tenancy market by removing 'unnecessary' restrictions on competition and constraints on the supply and location of retail space.
“Retailers operate under several regulatory regimes that restrict their competitiveness and ability to innovate and there are major restrictions which need to be addressed,” the report stated. “These are the planning and zoning regulations which are complex, excessively prescriptive, and often anticompetitive, and the trading hours regulations which restrict the industry’s ability to adapt and compete with online competitors and provide the convenience that consumers want.”
Many submissions to the inquiry suggested that the level of the low value threshold (LVT), for application of GST and duty to imports, is undermining the competitive position of Australian retailers in comparison to overseas online retailers.
However, the Commission said this was judged to be a 'minor' part of the competitive disadvantage faced by retailers.
“But there are strong in principle grounds for the LVT to be lowered significantly, to promote tax neutrality with domestic sales. However, the Government should not proceed to lower the LVT until it is cost effective to do so,” the report stated.
The Commission also advised the Government to establish a task force charged with investigating new approaches to the processing of low value imported parcels, particularly those in the international mail stream.
Despite there being almost 140,000 retail businesses in Australia, the Commission said consumers are responding to the generally lower prices, greater product range and convenience offered by online shopping from overseas compared to that offered by many bricks and mortar stores in Australia.
The report said that while Australia appears to 'lag' a number of comparable countries in its development of online retailing, there are wider problems.
The Government has now set up the Retail Council of Australia with members including ANRA, which represents the larger end of the retail sector, the Australian Retailers Association (ARA), representing small and medium retailers and several other industry bodies.
ARA's executive director Russell Zimmerman said the forming of the council is 'crucial' as it now gives the Government one point of contact for dealing with retail issues.
“The ARA intends to work as part of the Retail Council of Australia to balance the power between retailers and their landlords through addressing planning and zoning restrictions, as well as working to harmonise and nationalise leasing legislation as quickly as possible,” Zimmerman said.