Reduce GST threshold to $100, retailers urge

Australian retailers are calling for the GST threshold to be slashed from $1,000 to $100, as well as demanding the right to dictate their own opening hours, in submissions to a Productivity Commission inquiry.

Retailers were invited to make submissions to the Productivity Inquiry into the Economic Structure and Performance of the Australian Retail Industry.

The Australian National Retailers Association – whose members include Harvey Norman, David Jones, Bunnings, Coles and Woolworths – said in its submission that members are struggling to compete in the marketplace because they are hit with duties and taxes their online rivals don’t face.

It has called for measures to “level the playing field”, including slicing the GST threshold on low value imports and accelerating the timetable to reduce tariffs on clothing.

ANRA also argues retailers should be able to set their own operating hours to compete with 24-hour online shopping, and highlights the fragility of the retail sector.

The submission states: “The wrong policy settings could result in the globalisation of the retail sector, seriously threatening the viability of Australian retailers and the jobs of many Australians.”

Small business lobbyist Peter Strong has hit out at ANRA over its submission, stating: “It is breathtaking to hear the representatives of these big retailers ask for what small retailers have been denied for years; a level playing field.”  

“There is more than likely a more sinister reason for their request for longer opening hours… They probably believe that if they can open 24/7 then small retailers will finally be forced from the marketplace and they can then do whatever they want.”

“If anything good comes out of the internet ‘webolution’ it is the fact that these big dinosaurs will become extinct and the more interesting smaller retailers will thrive.”  

Meanwhile, the Australian Retailers Association has called for tenancy reform in its submission, highlighting the power imbalance between landlords and retailers.

ARA executive director Russell Zimmerman says retail tenancy agreements and the “oligopolistic” nature of major shopping centre ownership is driving many retailers into the ground.

“While retail trade is flat, rents for bricks-and-mortar stores continue to increase, driving up prices for consumers and ensuring a sustained retail exodus from the market,” Zimmerman says.

“The oligopolistic nature of shopping centre ownership, and a retail tenancy regime which is skewed in favour of these large-scale landlords, presents an inherent disadvantage to Australian domestic bricks-and mortar-retailers in terms of equitable competition.”

The ARA has recommended retail tenancy reforms to the Productivity Commission, including:

1. Third party reporting of turnovers to avoid instances of predatory negotiations by landlords based on specified knowledge of business activity through an abuse of the “Turnover Rent” provisions.
2. First and last right of refusal for existing tenants in shopping centres to re-lease the premises prior to the landlord executing a lease to another tenant for the site.
3. An existing tenant should be able to seek an independent market rental valuation of their tenancy as a condition of entering into a new lease, particularly as there is not currently a market rate for commercial tenancies.
4. National registration of retail leases. The ARA says it believes a similar model to that of NSW should be adopted, whereby a registration of retail leases is recorded with an appropriate regulator.

   Ideally, such a matter would be given appropriate powers to police non-compliance and would be harmonised across jurisdictions.