Retail bodies pledge to unite to attack retail rents, penalty rates and payroll tax

Retail bodies have pledged to work together to address troubles afflicting the sector, with retail rents, online purchase taxes, penalty rates and payroll tax in their sights.

But with the Shopping Centre Council rejecting the Franchise Council’s plans for a voluntary retail tenancy code of conduct and the Government unenthused at the prospect of slapping the goods and services tax (GST) on small online purchases, the retailers have a battle on their hands.

At a retail forum held in Sydney this week convened by the Franchise Council of Australia and attended by the Australian Retailers Association, the Pharmacy Guild of Australia and the Restaurant and Catering Association, agreement was reached to:

• Establish a cross-industry working group to finalise a proposed retail leasing code of conduct;
• Lobby the Government to “substantially” reduce penalty rates for workers;
• Call for the neutralisation of ‘bracket creep’ on payroll tax;
• Try to get GST and import duty applied on all foreign e-commerce transactions above $50; and
• Lobby for the introduction of a small business assistance program modeled on US examples.

The FCA says the forum “endorsed the view that Australian small business retailers are competing on an increasingly uneven playing field that features an unnecessarily high cost environment and unfair competition that is exacerbated by factors such as reduced access to opportunity and finance.”

“The forum called for prompt action by industry stakeholders and Government to avert a retail disaster, enhance competition and continue to provide outstanding quality and service to Australian consumers.”

Australian Retailers Association executive director Russell Zimmerman says while the retail body supports the forum’s ideas, it wants to go further and abolish payroll tax altogether.

Of particular interest to the ARA is retail rents.

“Currently if a retailer has a lease with a shopping centre, it’s CPI plus 2%. But with retail growing at between 2-3% annually, we just can’t sustain those levels,” Zimmerman says.

“We look forward to working alongside other industry groups.”

The forum comes as official figures show retail sales lifted 0.3% in January, in line with market forecasts, or 2.7% for the year.

Westpac said although the figures “confirm reports from retailers that suggested there was some improvement in conditions post-Christmas”, it was cautious about the result, noting sharp lifts in Queensland and the cafes and restaurants sector.

“February data will be crucial to confirming that rate cuts, an associated firming in consumer sentiment and a migration-led pick up in population growth are seeing a modest lift in spending,” the bank said.

“Even with this, lingering concerns about job security and a patchy labour market will remain significant headwinds to demand.”