Productivity Commission Performance Benchmarking of Australian Business: Planning, Zoning and Development Assessment A submission by the Shopping Centre Council of Australia August 2010 TABLE OF CONTENTS Topic Page Executive Summary ....................................................................................................................................3 a a i i l l 1.0 Introduction..........................................................................................................................................5 a a r r 2.0 The Myth of a Restriction on Retail Space .......................................................................................7 t t 2.1 Is there a Shortage of Retail Space in Australia?...........................................................................7 s s 2.2 Have Planning and Zoning Systems Limited Growth of Retail Space?..................................... 13 u u A A 3.0 The Myth of ‘Anti-Competitive’ Activity Centres Policies ............................................................ 15 f 3.1 Why Activity Centres?...................................................................................................................... 15 f 3.2 A Shortage of Activity Centres? ..................................................................................................... 16 o o 3.3 A shortage of Land in Activity Centres? ........................................................................................ 17 l l i i 3.4 Protection from Competition? ......................................................................................................... 18 c c 4.0 The Myth of ‘New and Innovative Competitors’........................................................................... 19 n n 4.1 Inherent Planning Policy Flexibility ................................................................................................ 19 u u o o 5.0 Issues Raised by the Productivity Commission............................................................................ 21 C C 6.0 Conclusions and Recommendations............................................................................................... 31 e e r r t t Appendix 1................................................................................................................................................. 33 n n About the Shopping Centre Council and Contact Details ................................................................... 38 e e C C g g n n i i p p p p o o h h S S SCCA Submission: Productivity Commission Report – Planning, Zoning and Development Assessment Page 2 of 38 EXECUTIVE SUMMARY This submission focuses on only one particular aspect of the terms of reference of the Productivity Commission’s study, which is the impact of the planning system on competition. The Productivity Commission’s Issues Paper recognises that some impacts on competition are a a almost inevitable in a regulatory environment which is intended to impact on the operation of the i i market place in order to achieve optimal societal benefits. l l a a Accordingly, we agree with the Productivity Commission’s approach that what is at issue is whether competition is restricted by more than that which is necessary to achieve r r optimal community allocations and uses. t t s s It is the Shopping Centre Council’s view that there are aspects of planning systems across Australia that are unnecessarily restrictive; but not to the extent that fundamental planning policy u u approaches (such as activity centres policy) should be abandoned or diluted. A A We believe that the challenge of this review is to explore how greater competition can be achieved without compromising the multiple benefits of the planning system. In understanding f f what opportunities do exist to optimise competition within a regulatory environment, it is important to ‘interrogate’ and challenge some common misconceptions that are peddled by o o certain interest groups. These misconceptions include: l l i The myth that there is a shortage of retail floor space in Australia that in itself is a barrier to i • increased competition; c c • That ‘activity centre policies’ which promote and encourage retail development to be located n n within, or adjacent to, nominated activity centres are inherently anti-competitive; u u • That ‘new and innovative competitors’ are prevented from entering the market; o o This submission seeks to assist the Productivity Commission by: C C • Providing evidence and examples of the performance of the planning system in respect to the provision of retail services in Australia; e e • Providing an understanding of the important role of ‘activity centre’ policies in order to r r optimise social, economic and environmental outcomes; t t • Identifying the areas of the planning systems where improvements can be made to ensure n n that competition is optimised. e e • Seeking to answer the specific questions posed in the Issues Paper. We have identified a number of ‘best practice’ approaches and recommendations for Retail C C Centres Planning which we consider to be highly relevant to the Productivity Commission’s review. These are listed as follows: g g • Activity centres policies that promote commercial and retail developments to co-locate within n n identified activity centres (such as regional, town and village centres) should remain the i i cornerstone of orderly and proper planning and must be maintained. p p • Continually support the growth of existing activity centres, by proactively ‘upzoning’ those centres, so that more businesses can enter that particular market and existing business can p p more readily expand. o o • The need for improved processes to achieve the timely, orderly and proper creation of new activity centres, which are most likely to occur in areas of significant population growth. h h • Provide clear policy positions in respect to how ‘out of centre’ retail development proposals S S should be evaluated. To this extent, we support the ‘sequential test’ approach that is proposed to be adopted in NSW, although the need for the application of this test will be reduced if there is more effective planning within and around existing activity centres. • Planning regulations should avoid the imposition of retail floor space caps on development within existing or proposed activity centres. SCCA Submission: Productivity Commission Report – Planning, Zoning and Development Assessment Page 3 of 38 SShhooppppiinngg CCeennttrree CCoouunncciill ooff AAuussttrraalliiaa details appear attheendofthis submission. We would welcome theopportunity todiscuss this submission withtheCommission. Ourcontact • • • • SCCA Submission: Productivity Commission Report – Planning, Zoning and Development Assessment Assessment and Development –Planning, Zoning Report Commission Productivity Submission: SCCA Government’s Draft Competition SEPP). Government’s DraftCompetition relevance ofcompetition in theassessmentofdevelopment proposalsNSW (suchasthe the to respect in guidelines or policies transparent produce should authorities Planning the Trade Practices Act andoverseenby theACCC. There is nonecessity fora‘competition test’in theplanning asthisisregulated system under centres such as retail in development bulky goodszonesorenterprise corridors. There is tocontinuecontrol restrictions forplanning arole retail usesoutside activity provided. being of capable services retail specific the ActivityCentre typologies should avoidbeing pr escriptive regarding thesize and/ornature of Page 4 of 38 SShhooppppiinngg CCeennttrree CCoouunncciill ooff AAuussttrraalliiaa competitive manner (particularly regarding retail development). We argue in this submission that, that, submission this in argue We development). retail regarding (particularly manner competitive most commonly singled outforcriticism on the grounds that activity centresoperate in an anti- centres, such as regional,village townand centre activity identified within co-locate to developments retail and commercial require generally policies centres Activity short-handed. commonly are they as policies’ ‘centres or policies, In this submission addressthe wealso particularplanning as ‘activity policies centres’ known Commission’s study,beingCommission’s theimpact oftheplanning systemoncompetition This submission focusesononeparticular aspect systems andland development assessments. 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