By Claire Reilly

The Federal Government has issued its response to an inquiry conducted by the Productivity Commission (PC) into the Economic Structure and Performance of the Australian Retail Industry. The document addresses the concerns raised by the PC, including the efficacy of the Low Value Threshold on imports and the deregulation of trading hours across Australia.

In its original inquiry into the retail industry, the PC found that there were “strong in-principle grounds for the low value threshold (LVT) exemption for GST and duty on imported goods to be lowered significantly, to promote tax neutrality with domestic sales”.

However, it also noted that “the Government should not proceed to lower the LVT unless it can be demonstrated that it is cost-effective to do so”. In addition, the PC recommended the establishment of a taskforce to improve efficiency in the handling of low value imported parcels, before reassessing the LVT.

In its response, the Federal Government agreed to establish a “Low Value Parcel Processing Taskforce to investigate new approaches to the processing of low value parcels, particularly in the international mail stream. 

“The Taskforce’s report will provide a comprehensive blueprint for reform of the low value import processing system, with costed alternatives, for the consideration of the Government.”

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In addition, the Government announced the establishment of the Retail Council of Australia to “provide a specific forum for the industry to collectively raise their concerns with the Government and facilitate the consultation needed to inform the Governments’ consideration of policy matters relevant to the retail sector, including planning and zoning and retail tenancy leases”.

The Council will be chaired by the Assistant Treasurer, and will consist of “key industry stakeholders, including business, industry and union representatives”.

Among the other issues addressed, the Government conceded that the Australian Bureau of Statistics would need to review its surveys to ensure adequate data was collected about Australian consumers’ online spending habits.

The report also noted a recommendation from the PC calling for the deregulation of retail trading hours across all states, including on public holidays.

“As part of the National Competition Policy, the Commonwealth implemented measures to encourage all State and Territory governments to deregulate retail trading hours,” the report read. “While noting that various restrictions on trading hours have been retained in some States, a majority of States and Territories have undertaken some reform in relation to retail trading hours.”