Small retailers prepare wish list for Productivity Commission inquiry into sector’s future
Monday, January 24, 2011/
Retail bodies are busy preparing wish list of requests for next month’s Productivity Commission’s inquiry into the sector, saying the want the inquiry to address red tape, leases and trading hours as well as the controversial issue of the GST exemption for goods bought overseas.
While the inquiry is likely to focus on whether the local retailers are losing out to overseas web competitors, retail sector leaders such as the Australian Retail Association boss Russell Zimmerman says there are a raft of issues that need to be addressed.
Russell says the inquiry is the first serious look at the state of Australia’s retail sector.
“It’s about time the broader retail sector got this type of government attention,” he says.
For example, Zimmerman says the issue of pay rates on public holidays is of particular importance as it applies to every business.
“If you are running a business in retail and you’ve got to pay your staff double and a half time on Australia Day for instance, it is a huge impost to business,” he says.
“How we get around that and how we work towards getting things on a more equitable playing field? I don’t know.”
Other issues Zimmerman wants to see addressed include:
“Our occupancy costs against the rest of the world – I believe we have the second highest rental [market] in the world.
The cost of doing business in shopping centres in particular [needs to be looked at]. We have a lack of competition in shopping centres. There are only a few landlords [but] there are many retailers.”
Harmonisation of lease legislation across all states.
“We would certainly be looking for the harmonisation of lease legislation so that you have identical terms and conditions; what is and is not included in rents, whether they are put on a register, etc. That should be [the same] across all states.”
The availability of cost of occupancy and retail leases.
“If leases were registered, we would then be able to find out what the occupancy costs are on those leases and be able to negotiate leases in a far more transparent way.”
Access to education regarding retail tenancy.
“There are a lot of retailers that come in, particularly new start-up companies, that don’t understand the actual problems associated with running a retail business and then find that they don’t understand how a retail lease is conducted.”
General retailers’ education.
“There is a need for retailers to be more understanding of the internet and web-based education.”
Consistency around trading hours.
“Retailers should be able to determine their extended trading hours beyond core trading hours.
“I’m not suggesting that retailers should not open [for] some of these extended trading hours but where maybe a [larger] retailer chooses to open for the 24 or 36 hours leading up to Christmas, there may be reasons why some smaller retailers just find that totally uneconomical and lose money over it.”
Zimmerman says the issues of payroll tax, loss prevention and theft, and compliance costs and red tape also need to be addressed.
“I’m not sure that all of those are going to be able to be solved but I think we need to be aware of them and I think we need to discuss them,” he says.
Zimmerman says it is impossible to put a timeline in place, as to when any of these change should be made, as the right balance needs to be struck between investigation and action.
Myer chief executive Bernie Brookes has also cited the mining boom as a threat to the retail sector as workers are lured to WA by big pay packets, creating a skilled labour shortage.
“That’s going to require a review of anything from immigration policy to training, apprenticeships and education,” Brookes told The Australian.