MIL OSI – Source: Property Council New Zealand – What’s happening in Australia?
With Australia’s east coast states of Queensland, New South Wales and Victoria all having recently gone to elections, the inevitable slowing of the policy process as new and returning Governments and Ministers find their feet has resulted in federal issues dominating the Shopping Centre Council of Australia’s (SCCA) attention for the first half of 2015.
A swathe of reviews, inquiries and reports has reached critical points in recent months, many of which have the potential to significantly impact – both positively and negatively – the Australian shopping centre sector.
Competition Policy Review
With the groundwork of consultation having been laid throughout 2014, the Government’s Competition Policy Review Panel – tasked with undertaking a ‘root and branch’ review of Australia’s competition laws and policy – delivered its final report to the Government in March.
The Panel has nominated a number of ‘priority areas for reform’, including shop trading hours liberalisation, planning and zoning laws, and pharmacy location and ownership rules. The Panel has also recommended significant changes to Australia’s competition laws, including on the misuse of market power, price signalling, third line forcing and exemptions for joint ventures.
There could be considerable upside for the shopping centre sector if the Government accepted the Review Panel’s recommendations and worked with the states to drive reform. This is particularly true of the potential to liberalise retail trading hours across the country.
The Minister for Small Business, Bruce Billson, has signalled that the Government will consult on the recommendations prior to responding and outlining a reform agenda.
Senate Committee Inquiry
In February, the SCCA appeared as a witness at a Senate inquiry into the need for a national approach to retail leasing (an interesting proposition considering that retail leasing across Australia is currently regulated through state and territory legislation).
With a Terms of Reference which contained various anti-landlord propositions, including first rights of lease renewal for tenants, the report tabled by the Committee ended up being very balanced.
The Committee made three broad recommendations: (1) The Australian Government should give due recognition to, and support, the work of Small Business Commissioners across the country, and encourage their establishment in remaining jurisdictions, (2) The National Retail Tenancy Working Group be re-established to develop a national disclosure statement, and (3) The Commonwealth should take a leadership role through Council of Australian Governments (COAG) to encourage the states and territories to move toward a harmonised approach to retail leasing.
The Government has a number of months to consider and provide its response to the Committee report. The SCCA does not oppose these recommendations but does not consider them ‘game-changers’ either.
A major headline in Australia at the moment deals with tax reform, fuelled by the release of a Tax Discussion Paper by the Australian Treasurer, Joe Hockey in March. This is the first step towards to the preparation of a Green Paper, due later this year, and, ultimately, a White Paper which will form the basis of the Government’s tax policy leading into the next Federal election (anticipated in 2016).
The Government is not ‘ruling anything in or out’ (except, apparently, changes to negative gearing arrangements on investments) and is welcoming feedback on all aspects of the tax system and ideas for change.
Of particular interest to the shopping centre sector is the potential reform to the Goods and Services Tax (GST) (with New Zealand’s approach often referenced as a case study) and the future of state and territory-based conveyance duties and land taxes. We are also interested in seeing this process close the Low Value Threshold (LVT) GST exemption on imported goods under $1,000, which is well above New Zealand’s.
The tax review process will be long and laborious, but it is a discussion worth having and the SCCA anticipates ensuring our sector’s view is heard.
While reform debates at the national level will keep the SCCA occupied over the coming months, policy momentum will inevitably begin to gather across the states and territories.
Already the South Australian Government is progressing a comprehensive tax review process (independent of the Federal Review) and a review of its retail lease legislation, while Queensland has a planning reform agenda which needs to be revived by the recently elected Labor Government.
The returned Liberals/Nationals Government in NSW is being urged by a number of stakeholders, including the SCCA, to progress a Retail Investment Policy and, in Victoria, attention will continue to be focussed on a review established by the new Labor Government into the former Government’s decision to provide exemptions for licensing requirements for real estate agents which are involved in the management or sale of large commercial property portfolios, including shopping centres.