SOUTH AUSTRALIAN INDEPENDENT RETAILERS POLICY STATEMENT PAPER – FEBRUARY 2019 South Australian Independent Retailers (SAIR) is a not-for-profit industry association, advocating the interests of South Australian owned and operated independent supermarkets, which are very competitive with Woolworths, Coles and international supermarket chains (e.g. Aldi, Kaufland). Independently owned supermarkets in South Australia have a market share of circa 29%, compared with circa 11% elsewhere in Australia. The largest market share of any State or Territory in the nation. This policy paper sets out SAIR’s policy positions on key economic issues affecting independent supermarket retailers and the whole economy. The objective of this paper is to inform policy makers and politicians of all political persuasions re SAIR’s views, enabling constructive dialogue, engagement and consultation with SA independent supermarket owners. POLICY ISSUE/RATIONALE 1. DEREGULATION – PUBLIC HOLIDAYS SA Independent Retailers are opposed to further Deregulation of shop trading hours invariably favours big business deregulation of shop trading hours, including Public at the expense of small business, with consumers ultimately losing Holidays. out, through reduced competition and higher prices. The question of whether there should be further There is clear evidence around the nation that deregulation of shop trading hours has had severe, adverse impacts on small and deregulation of shop trading hours (including Public medium size businesses, including business closures and job losses, Holidays) is a matter for each State jurisdiction. with local growers, farmers, wholesalers and local supply chains having lost significant market share to the multi-national and The Federal Government should not use its power or international retail chains. leverage to seek to encourage or influence the States & Territories to further deregulate shop trading hours. SA Independent Retailers strongly disagree with the 2015 Harper Review of Competition Policy, which was in favour of further deregulation of shop trading hours. 2. POPULATION GROWTH While there is significant anxiety in Sydney and Melbourne about SA Independent Retailers believes continued population growth, South Australia has the opposite that a targeted approach to growing the nation’s problem: it needs to increase its population, to increase demand population is good for the nation’s overall economy. for goods and services. SA Independent Retailers encourages the Federal Increased population, especially through targeted, skilled migration Government to develop and implement a policy to programs, is essential to growth and prosperity in South Australia, stimulate population growth in South Australia. which has an ageing population, has lost industries such as car manufacturing and is transitioning its economy via substantial new investments in defence, renewable energy. P a g e 1 | 4 ‘advocating for the owners of Foodland, IGA & Friendly Grocer supermarkets across South Australia’ PO BOX 2176, KENT TOWN SA 5071 | M: 0413 282 641 | E: [email protected] | ABN: 82 804 971 951 The Federal Government is invited to consult with independent supermarkets, through SAIR, and other SMEs in South Australia before deciding any future national population growth strategies or policies affecting South Australia Developing and implementing a targeted population growth strategy across the nation requires a coordinated and conciliatory effort of all States & Territories to meet a range of varying local market & community supply and demand requirements. 3.AFFORDABLE & RELIABLE ENERGY In recent years, South Australia has experienced some of the SA Independent Retailers wants to see the development highest prices in retail energy at both commercial and residential and implementation of a national energy policy that: rates anywhere in the world – this problem persists makes electricity affordable and reliable provides small-to-medium enterprises (SMEs) Expensive electricity prices have meant not only a direct, massive with confidence increase in the cost of doing business, it has meant that consumers protects and guarantees competitive fairness have less disposable income, leading to reduced sales at the for all SMEs, including no long–term ‘buy-in’ or supermarket check-out, with the knock on effect damaging SMEs ‘lock-in’ contractual obligations and has ‘opting’ out conditions The Federal Government is invited to consult with SA Independent assists all States & Territories to reduce overall Retailers and other SMEs around the country to discuss and wholesale and retail prices develop an improved national energy policy SA independent Retailers believe that, given each jurisdiction around the country has different energy demands and supply issues, a ‘cookie-cutter’ approach to this matter is impractical and therefore a ‘local/regional’ approach is required, which must be fed into a national energy strategy that also has agility to accommodate various requirements 4.A LEVEL PLAYING FIELD: COMPETITION RULES REGARDING NEW Local businesses retain and invest their profits in the local ENTRANTS TO THE AUSTRALIAN RETAIL MARKET community. By contrast, international retail chains send and invest their profits overseas. SA Independent Retailers believe that new entrants to the Australian Retail Industry/Market, particularly from Despite this, governments across Australia often ease local overseas, must ‘play’ within the same rules as Australian planning law (and other regulatory) requirements to make it easy owned SMEs for overseas chains to establish themselves in Australia, on the false assumption that new entrants will “create more jobs”. This is exacerbated by favourable tax arrangements for international businesses operating in Australia, which sees local businesses paying more tax in Australia than their international competitors. Meanwhile, local businesses have had to operate in a more regulated, higher cost environment for years and continue to do so resulting in local businesses and international chains competing on a playing field that is not level – at the expense of local business. The Federal Government is invited to consult with SA Independent Retailers in relation to new entrants, particularly international retailers, to ensure there is a better understanding by government of the adverse impact that these unfair and short-sighted practices have on Australian SMEs - and ensure that all retailers operating in the Australian Retail Market have the same rules of engagement, including taxation laws P a g e 2 | 4 ‘advocating for the owners of Foodland, IGA & Friendly Grocer supermarkets across South Australia’ PO BOX 2176, KENT TOWN SA 5071 | M: 0413 282 641 | E: [email protected] | ABN: 82 804 971 951 5.COMPETITION POLICY – ‘LOW-COST TRIBUNAL’ FOR SME’S SA Independent Retailers believe that a ‘low-cost’ or ‘no- The new ‘Effects Test’ (s46), which came into law in August 2017, cost’ tribunal be established to assist SMEs to challenge has not been tested and was introduced with the intention to assist anti-competitive behaviour under Section 46 of the SMEs with minimising the cost and time impacts of challenging anti-competitive behaviour Consumer and Competition legislation, where conduct of competitors has the purpose, effect or likely effect of Given that a challenge under s 46 is likely to cost a small business at substantially lessening competition least $150k in legal costs, the Federal Government is invited to consult with SMEs to find a way to reduce this cost and ensure that SMEs have a realistic, cost-effective method of challenging anti- competitive behaviour 6.SMALL–TO-MEDIUM SIZED BUSINESSES – TAXATION RELIEF The Federal Government is invited to consult with SA Independent SA Independent Retailers support a lowering of the Retailers and other SMEs on the topic of lowering Company Tax Company Tax rates for SMEs and cutting ‘red tape’ on rates to incentivise and encourage re-investment of profits back administration of BAS & GST returns into local communities and boosting their economies. BAS & GST administrative requirements need to be further streamlined. 7.INDEPENDENT INDUSTRIAL RELATIONS FOR SME’S SA Independent Retailers support the Fair Work There should be no major changes by the Federal Government to the Fair Work system, that effect its independence and Commission as independent body and arbiter transparency. SA Independent Retailers believe that Penalty Rates SMEs make up a significant part of the total Australian Retail should not be increased for a period of five years, as this Industry, which is the largest private employer in the country. will provide a reasonable timeframe for SMEs to gain commercial confidence and certainty in the economy Penalty Rates are a significant cost to doing business. Any increase in this area means SMEs must cut costs in other areas of their businesses to maintain service levels. With the escalating cost of doing business such as energy, compliance, insurances and other red tape, independent retailers encourage the Federal Government to establish a hiatus that prevents any increase in Penalty Rates for the next 5 years, to stabilise the cost of doing business in the Australian retail sector 8.FEDERAL FUNDING FOR TRAINING SA Independent Retailers believe that the national The national Retail Industry (including wholesale) is the largest Vocational Education Training (VET) system should be private employer in Australia, employing around 1.26