What does the Productivity Commission mean for the future of retail?

By Keri Algar

SYDNEY, NSW: A month ago, the Federal Government announced an inquiry into the future of Australian retail by the Productivity Commission to research online shopping in Australia and a potential “campaign to crack down on people or businesses rorting the $1,000 low-value threshold”.

The Future of Australian Retail is one of nine inquiries currently being undertaken by the Productivity Commission and though it was reported to initiate in early 2011, Current.com.au understands that the process has not yet begun. However, while it was expected to start in March/April this may be brought forward to the end of February. According to sources, this fastracking has not been caused by the Retail Coalition's very public campaign.

The public inquiry will investigate the implications of globalisation on the retail sector, in other words, how online sales are and will increasingly impact bricks and mortar retail.

“The Commission will also consider the broader issues posed by an increase in online purchasing by Australian consumers and the role online purchasing plays in providing consumers with greater choice, access and convenience,” explains the inquiry’s website.

In a press release last year, Assistant Treasurer, Bill Shorten, said that the Government recognised the importance of the retail sector to Australia’s future and would continue to support consumers whether online or on high street, suggesting that the inquiry will not be inclined to favour one method over the other.

"This Government supports consumers to shop in whatever manner they choose, including online. The case for lowering the threshold has significant opposition, including the cost of collection and consumer objections. However, we are taking the concerns of retailers seriously, which is why I have asked the Productivity Commission to look into these issues," Shorten said.

At the same time, the Minister for Home Affairs, Brendan O'Connor, announced the Government’s intention to launch a “compliance campaign” to ensure that GST for imports with a value of $1,000 or less were not being exploited. The campaign was set to start from the early 2011.

"It's important people follow the rules and not try to rort the system. Customs will work closely with the retail sector to identify particular areas of risk for non-compliance," O'Connor said.

Meanwhile, the Retail Coalition led by Harvey Norman and Solomon Slew, last week reiterated its determination to lobby the Government to change GST laws, despite continued criticism from consumers and industry bodies such as the Fair Imports Alliance.

Retailers who would like to keep tabs on the Productivity Commission’s progress, can click here to register their interest.

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