ASGA calls for urgency in regulatory reforms for retail

The Australian Sporting Goods Association (ASGA) has backed the The Productivity Commission's call for regulatory reforms for the Australian retail industry but fears that the two year timeline for any change will be "another two year talkfest."

The draft report - Economic Structure and Performance of the Australian Retail Industry - examines the implications of globalisation for the retail industry and the appropriateness of current policy settings.

The Productivity Commission (PC) is proposing that state and local governments reform regulations that hamper the ability of retailers to respond to changing consumer preferences, including planning and zoning regulation and retail trading hours' restrictions. The Australian Government also needs to review any constraints imposed by workplace relations regulations which may impede retailers in improving their productivity and lifting customer service levels.

The current exemption from GST and duty for imports valued below $1,000 (the low value threshold) is judged by the Commission to be only a minor contributing factor to online offshore purchases by consumers, which have grown rapidly but are still a small share of retail sales.

However, Commissioner Philip Weickhardt believes "for reasons of tax neutrality, the level of the low value threshold should be reduced, but only once this can be done cost-effectively."

In response, an ASGA statement read "the release of the draft report of the Productivity Commission backs up claims by retailers that the low value import threshold should be reduced. The Productivity Commission has identified that there is an in-principle need to reduce the low value import threshold. This is a very important finding. "

ASGA spokesperson Brad Kitschke added "the recommendation by the PC that the threshold should be lowered is great news for retail. It backs up what we have been saying all along. We are not surprised that Customs has come under fire for its inefficiency, we have been extremely critical of Customs throughout this review and the PC has validated those concerns."

However, ASGA, who led the fight against the threshold since 2005 and was a founding member of the industry coalition the Fair Imports Alliance, has slammed the two year timeline for reform with

Kitschke stating "we were assured by the Government that they had an open mind to the PC Inquiry outcomes. Now we have a recommendation that the threshold should be lowered, but that cannot occur because the bureaucrats in Customs cannot run an efficient agency.

"Whether the PC said that the threshold was a minor or major negative contributor to the current state of retail is irrelevant. The PC has said that the best thing for the economy as a whole is for the threshold to be reduced.

"So it's up the Government to make that happen in a cost effective way without delay.

"The answer isn't another two year talkfest. I completely reject the notion that the best way to proceed is to have a taskforce made up of the express carriers and Australia Post to look at making their own processes more efficient to enable the threshold to be lowered. These are the same groups whose submission to the PC opposed the threshold being lowered. They won't do anything to assist this process because they don't agree that there should be a lower threshold. We need action and leadership on this issue.

"The retail industry needs action now (and) it's up the Government to take that action. There is only one course of action that is appropriate here. The Customs Minister should instruct his agency to immediately implement sweeping changes to the parcel handling processes to ensure a greater efficiency so the threshold can be lowered.

"This Government must decide who is running the agenda, Ministers or bureaucrats in customs.

"Retailers are doing it tough and they are changing and embracing the new market and on the whole are doing so very well. It is time to stop the negative commentary about retailers and recognize their importance in the economy and provide them with some relief and assistance not just criticism.

ASGA has re-stated its call for a Ministerial Advisory body to be established for the retail industry to advise Government about the sector and play a role in implementing the recommendations.

"What we need is a central point of policy advice from the retail industry to government. We don't need talk fests and roundtables but we need a focal point for real policy advice and action. This Government needs to reach out to the retail sector, not establish taskforces and talkfests with open ended timelines with interested parties who don't want change."

Nigel Benton’s Blog on the changing nature of sports retailing can be read at http://ausleisure.blogspot.com/2011/08/challenging-times-for-sports-retailers.html