20/10/2014 - 16:54

Report critical of retail restrictions

20/10/2014 - 16:54

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The state government has further incentive to loosen retail trading restrictions after a Productivity Commission report found current regulations are of no benefit to business, but impose a major cost on consumers.

Report critical of retail restrictions

The state government has further incentive to loosen retail trading restrictions after a Productivity Commission report found current regulations are of no benefit to business, but impose a major cost on consumers.

The report, ‘Relative costs of doing business in Australia: retail trade’, followed the recently released draft Harper Review of competition policy, which was highly critical of the lack of progress on trading hour reform.

The Productivity Commission said the current restrictions in Western Australia imposed a significant compliance burden on businesses, with an alarming variety of constraints having no apparent rationale.

Restrictions in WA are based on location, product lines, time and shop size, and are largely based on archaic practices and piecemeal reform, according to the report.

In contrast to the prominent argument that deregulation would damage small business, the report found no evidence to suggest it would affect the structure of the retail sector or the viability of small retailers.

Further analysis found that purchasing patterns in WA were significantly distorted compared with less-regulated states, with more activity on Thursday evenings and on Saturdays.

Victoria, which is lightly regulated, had considerably smoother trading patterns with hardly any discernible differences between days.

The commission said the result of this distortion was inconvenience to customers and increased congestion at shopping centres in busy periods.

A key example highlighted in the report was of Masters Home Improvement, where tradespeople had been forced to queue outside prior to store openings, sometimes with up to 50 people waiting for service.

The commission also found that the introduction of Sunday trading in WA had created at least 1,000 jobs in large grocery retailers alone.

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