Urbis Think Tank
Productivity Commission reports that Australian retail has low productivity – partly due to planning and zoning
Today the Productivity Commission released their Draft Report into the Economic Structure and Performance of the Australian Retail Industry.
Among the key points, the Commission found:
- While current trading conditions are challenging, over the last three decades, retail sales growth has trended down;
with consumers spending more of their rising incomes on a range of non-retail services including financial, property, travel and entertainment.
- The Australian Retail industry, as a whole, does not compare favourably in terms of productivity with many
overseas countries. And the productivity gap appears to be widening.
- Retailers operate under several regulatory regimes that reduce their competitiveness. Major restrictions which require improvements are:
- Planning and zoning regulations which are complex, excessively prescriptive and often exclusionary
- Trading hours regulations which interfere with the industry’s ability to adapt and compete in a more globalised market
- Constraints on workplace flexibility such as obstacles to the greater use of enterprise bargaining and the adoption of best practice productivity measures.
- The current level of the low value threshold (LVT) for exemption from GST and duty on imports is $1000. The exemption is judged to be a minor part of the competition story, but GST is a broad-based consumption tax, and the LVT in principle should be reduced to a low level to ensure tax neutrality. However, the Commission does not recommend any immediate lowering of the LVT as the costs of collection would exceed tax revenue at this stage.
The full report can be accessed here