The Australian Government is considering reforming retail leasing policy to make the rules consistent across the country, with industry bodies applauding the move.
The government has launched a consultation process today, calling on stakeholders and other interested parties to share feedback on the plan, with submissions due by October 12.
Currently, states and territories regulate retail leasing. While their rules often have similar goals, the government claims they do not always operate in the same way.
“Different rules and processes can create extra costs and complexity, particularly for businesses and landlords that operate in more than one state or territory,” the consultation page shared, which adds that greater consistency could reduce compliance costs, improve transparency, make leasing requirements easier to understand and help businesses and landlords operate across jurisdictions.
The Shopping Centre Council of Australia (SCCA) welcomed this focus, noting that well-designed reform could deliver meaningful productivity benefits for retailers, landlords and small businesses.
“Retail lease legislation is an area where greater harmonisation could reduce unnecessary cost, complexity and delays, and therefore enhance productivity,” Nardi said. “We’ve already had early discussions with the Government about this proposed reform and appreciate their early engagement with us.
“The retail industry has also already come together and discussed where harmonisation could deliver the greatest practical benefit, including drawing on lessons learned from previous attempts at national consistency and what is working well across Australia today.”
The SCCA believes the most achievable opportunities are likely to be practical and procedural, rather than changes to issues that relate to the commercial terms or mediation and dispute resolution.
Potential areas for greater consistency include harmonised disclosure statements and streamlined processes for multi-tenancy transactions.
Nardi said successful reform would depend on close engagement with those directly affected by retail leasing legislation.
“We are the only group that consistently engages on retail lease legislation across all jurisdictions, and we also oversee the only current ‘harmonised’ retail tenancy instrument, being the SCCA Casual Mall Licensing Code of Conduct, which is authorised by the Australian Competition and Consumer Commission (ACCC), and applies to short-term ‘pop-up’ retail premises,” he said.
“The Code, which has been in place since 2007, demonstrates that national consistency in this area is achievable, and we believe it offers a useful platform for the work ahead.
“We also know deeply what doesn’t work, including the retail rent relief code during COVID-19 where ourselves and the retail industry developed an agreed national code, but it ended up being an amended federal code, and then a quagmire of state regulations.
“The industry’s 14-page code, comprising 11 sections and 2,624 words, ended up being regulated differently across Australia’s jurisdictions, blowing out into 217 sections and 50,840 words.
“As a partner throughout, there is a real opportunity to remove unnecessary red tape and deliver sensible harmonisation.”