Australia should loosen restrictions on trading hours and relax planning and zoning regulation to give local retailers a fighting chance in a globally competitive market, according to the Productivity Commission.
The Commission on Thursday published a draft report into the structure and performance of the struggling Australian retail industry.
As well as the zoning and hours changes, the report suggests the government review any constraints on improved productivity that may be imposed by workforce relations regulations.
Commissioner Philip Weickhardt said Australia's retail sector has lower levels of productivity and higher costs when compared internationally.
Despite the high-profile campaign by the Retail Coalition against the exemption on GST and duty for imports below $1,000, the report states that this is only a minor contributing factor to the rapid increase in online purchases.
The Commission does recommend that the level of the low value threshold should be reduced – but only “once this can be done cost-effectively,” Weickhardt said.
Using existing parcel processing systems, the cost to process the extra parcels would far exceed any additional revenue raised, he said. But the Commission has recommended that lower-cost approaches to processing be investigated.