Retailers call for urgent productivity reform, lower costs and safer workplaces in Federal Budget
Costly and complex government policies are choking productivity at the worst possible time for retailers and households. Red tape continues to pile up, illegal tobacco and escalating retail crime are undermining business viability and worker safety, and ultra-cheap offshore platforms are allowed to sidestep Australian laws altogether. These failures are distorting competition, driving up costs and demand urgent action in the Federal Budget.
The newly formed Australian Retail Council (ARC) has lodged its first major submission, outlining seven targeted reforms to strengthen retail productivity, support investment and ease cost of living pressures for Australian households and businesses as part of the pre-Budget process.
With RBA interest rate uncertainty underscoring the importance and urgency of economic reform, ARC warns that fragmented regulation, rising compliance costs and unchecked illicit activity are undermining productivity and confidence.
ARC is calling for seven priority Budget reforms:
- Deliver productivity growth through national harmonisation
Fund nationally coordinated reform to remove duplication acrossjurisdictions, lower compliance costs, make it easier for businesses — particularly small retailers — to operate across state borders, and unlock productivity growth. - Modernisetax settings to lift investment and competitiveness
Establish a Tax and Federation Reform Commission to simplify settings, align company tax at 25 per cent, reject new parallel taxes, and prioritise practical reforms that boost competitiveness and investment.
- Reduce regulatory impacts that disproportionately affect small retailers
Target high-friction compliance and reporting requirements to deliver measurable burden reduction, improve small businessviability and ensure regulatory impact analysis genuinely considers business cost and complexity. - Improve worker safety by tacklingorganisedretail crime and illicit tobacco
Strengthen coordinated action to disrupt organised retail crime and illicit tobacco trade, which drive up prices, insurance costs and place retail workers and customers at risk. - Enforce compliance against ultra-low-cost offshore retailers
Take stronger action to enforce compliance with Australian Consumer Law,privacy and other regulatory obligations, ensuring offshore retailers compete on a fair and level playing field. - Moderniseworkplace relations and invest in retail skills and training
Invest in practical workplace relations guidance and flexible, industry-led training that supports compliance, skills development and progression into frontline and supervisory roles, while reducing unnecessary disputes. - Deliver nationally consistent packaging reform through Federal leadership
Provide Federal leadership and investment to implement nationally consistent, enforceable packaging reform that reduces duplication, supports a circulareconomy and avoids unnecessary costs being passed on to businesses and consumers.
ARC CEO Chris Rodwell said retail performance is a bellwether for the broader economy.
“Retailers, like households, are under pressure from rising costs. They’re also dealing with escalating regulatory complexity and increasing safety risks. To add to this, they’re navigating rapid structural change, shifting consumer trends, seismic technological change, heightened geopolitical risk and a deteriorating fiscal and monetary policy environment,” Mr Rodwell said. “These challenges underline the need for ambitious economic reform that delivers for retailers and households. Sustainable cost of living relief depends on policy reform that reduces unnecessary cost and complexity across the economy.”
Mr Rodwell said the 2026–27 Budget is an opportunity to deliver nationally coordinated reforms that strengthen one of Australia’s most economically and socially significant sectors.
“Retail employs 1.4 million Australians and in making up almost one fifth of our gross domestic product, it sits at the centre of the economy. Productivity is being dragged down by regulatory fragmentation, rising compliance costs and growing safety risks in stores,” Mr Rodwell said. “At the same time, it’s critical ultra-low-cost offshore retailers are held to the same Australian consumer, privacy and safety laws as local Australian retailers. We’re seeing other economies take action to ensure confidence in the system is not undermined, and competition is not distorted. The Federal Government and its agencies need to follow suit.”
Mr Rodwell said the best way to help households is to lift productivity and stop unnecessary costs being baked into prices.
“A lift in productivity is also critical to underpin real wage growth, rather than fall into the trap of the artificial and unaffordable ‘above inflation’ wage claims promoted by the union movement. History tells us that there is always a deeply uncomfortable reckoning when any economy lives beyond its means for too long. Genuine reform is the antidote to Australia’s economic underperformance,” he said.
“Retailers are asking for practical reform that removes duplication, improves safety and allows them to invest, grow and compete. It’s time to back the retailers that back Australia.”
E media@retail.org.au P 0434 381 670
About us: Australian Retail Council (ARC) represents a $444 billion sector that employs 1.4 million Australians across metropolitan, regional, and remote communities – making retail the largest private sector employer in the country and a significant contributor to the Australian economy. Our membership spans the full spectrum of Australian retail, from family-owned small and independent retailers that make up 95% of our membership, through to our largest national and international retailers that employ thousands of Australians and support both metropolitan and regional communities every day.