Productivity Commission not biased but reform still required, Australian Retailers Association says

The Productivity Commission isn’t biased against retailers and wants to provide the best outcome it can for the industry, but businesses are hurting and reform is needed particularly in the area of weekend and overtime wages, the head of the Australian Retailers Association says.

The comments come after a Productivity Commission hearing yesterday, which reportedly became heated at times as retailers attempted to put their case forward for why the GST-free import threshold should be lowered. The Commission argues this is the least important issue out of many identified in its report.

ARA executive director Russell Zimmerman also says he rejects comments from unions that retailers are “wildly profitable”, pointing to several collapses within the industry that have occurred over the past six months.

“When you look over the last six months, and think about companies like Brown Sugar, Ed Harrys, Colorado and so on. And then you see what’s happened to David Jones and Myer, I think it flies in the face of all that to say we’re in a profitable sector.”

“I don’t think it’s really looking at the big picture.”

Zimmerman, who attended yesterday’s hearing, says the Commission is “trying to do the best it can”, and says the industry cannot expect for there to be a solution in the short-term.

“I think people are just expecting change to come immediately. Some groups out there expect that tomorrow morning we’ll wake up and the Government will have done something about all of this.”

“We had a very open discussion yesterday, we had a very good hearing, they gave us our allowed time. I think the Commission is looking for a way forward that solves a problem for the industry.”

The Commission yesterday was designed for retailers and industry groups to respond to its draft report. Many groups were frustrated that the draft downplayed the importance of lowering the value of the GST-free threshold, an issue which they believe to be critical to the conflict between bricks and mortar and the shift towards offshore, online retailing.

Commissioner Philip Weickhardt reportedly responded to retailers yesterday saying that price differences between online and offline products could not be accounted for by just lowering the GST threshold.

“I know in your world you might actually be delighted if the whole system froze up and there were no imports of low-value parcels,” he said, according to the Australian Financial Review, in response to comments from the National Retail Association.

“That protectionist sentiment comes through in terms of the words you use.”

Weickhardt also reportedly criticised an analysis by the NRA claiming that 80,000 jobs could be lost over the next three years, saying it was “so full of holes it wouldn’t be worth the paper it was written on”.

The NRA has reportedly claimed the Commission is biased, but Zimmerman says he believes the hearing was a good arena for discussion and that “we clearly stated our case”.

One area of concern cited by the ARA was the lack of flexibility within working arrangements, as employers are unable to employ people to work seven days a week.

“We’re hearing from our members that this is the case. That because we are heading to a system where we pay time and a half on Saturdays, and double time on Sundays, they can’t stay open.”

“We are consistently told by retailers that there are people out there who want to work weekends, that they have lifestyles that is suited to that. There needs to be some flexibility there.”

Zimmerman also says retail tenancy laws need to be overhauled, saying that retail rents should be set by the market, and not by landlords who take revenues into account.