A retail group has accused the government of failing to stand up for Australian retailers, after deciding to refer the recommendations of a Productivity Commission report to another taskforce.
The Productivity Commission’s final report on the state of the retail sector features a raft of recommendations, including no changes to the $1,000 GST-free threshold for goods bought online from overseas.
The Commission justified this recommendation by saying that even dropping the threshold to $20 would not be cost-effective because “over 30 million mail parcels would then need to be processed for GST and duty, compared to the level of 20,000 parcels in 2009-10”.
“The cost of the processing, using the current system, would escalate to over $2 billion – more than three times the additional revenue collected,” the report said.
The government has responded to the report by establishing a retail taskforce, which will examine how the recommendations should be dealt with.
But the National Retail Association has criticised the move, saying the establishment of another taskforce is a “political delay tactic”, which will ultimately cost more retail jobs.
“It is imperative that the government not allow itself to be bogged down or side-tracked by administrative issues,” NRA executive director Gary Black says.
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Black also expressed concern over the Commission’s recommendation to make no changes to the GST-free threshold, labeling it an “unfair loophole” that must be addressed immediately.
“The current tax discrimination, or two tax system, is identified by many retailers as the single greatest impediment to business growth,” Black says.
“Any unnecessary delay in changing the system will inevitably weaken the performance of the retail sector and contribute to store closures and job losses.”
Other recommendations from the Productivity Commission include:
- Retail trading hours should be fully deregulated in all states, including on public holidays.
- State, territory and local governments should broaden business zoning and significantly reduce prescriptive planning requirements to allow the location of all retail formats in existing business zones to ensure competition is not restricted.
- The Australian Bureau of Statistics should monitor and report online expenditure both domestically and overseas by Australian consumers.
- The government should request the Australian Law Reform Commission to examine whether the costs to the community outweigh the benefits in relation to the parallel import restrictions in the Copyright Act 1968, which prevent retailers from importing and selling clothing or other goods that embody decorative graphic images sold with the copyright owner’s permission in another market.
Meanwhile, Assistant Treasurer Bill Shorten is taking a tough-love approach, saying retailers shouldn’t regard the internet as a “big brown snake” that will imperil the future of retail.
“Consumers are shopping online for a whole host of reasons from being value-conscious, to taking benefit from the high dollar, to looking for range, to frustration from some-bricks-and mortar [stores],” Shorten told a press conference.
Shorten said the government will not “take the low road” and advocate an end to penalty rates or lower wages in the retail sector.
“The reality is retail wages are not high… Surely we are smarter in this country than just cutting people’s wages,” he said.
“The government is most mindful of the concerns of small business… and we think there are collective solutions to the future of retail.”