Part 1: Introduction
Good morning to everyone here today. It’s a genuine privilege to be speaking at the Retail Leaders Forum again this year, with so many passionate and dedicated professionals representing Australia’s retail sector.
Some of you may know that my connection to retail runs deep—it’s a career I was essentially born into. From the age of 11, my siblings and I spent every school and uni holiday working in our Mums business – family retail business Carla Zampatti. I spent most of my time in stores – merchandising, running stock between stores – being there for the great excitement that was the Boxing Day sales.
Mum told us that it was when she became a retailer, not just a wholesale business that she really started to succeed – because she could listen directly to the customer, build their loyalty, and understand what mattered to them.
I ran that business for 9 years – including during the GFC. I was a director of the business during the pandemic, when I remember sitting with the family, contemplating closing every store we had – a situation I never thought we would face. And I am very proud that our family still owns that business, and that it celebrates its 60th birthday this year. As I start to send my young kids into the business during the school holidays, I am hoping for another 60 years. But I know that won’t be enough and we’ll need to make our own luck.
Retail is where many of us first learn valuable life skills. Around 50% of teenagers aged 15 to 19 hold a part-time job, and nearly 25% of those jobs are in retail—making it the second-largest employer for this age group, behind hospitality. When I get asked for career advice from students, I always say get a job, get a retail, customer facing job – whether you want to be a scientist, a lawyer, an entrepreneur, face-to-face contact with the customer will teach you skills that will set you up for life.
But retail is much more than a stepping stone for young people—it’s a fulfilling, creative career for many.
And it is important, and matters to the country. Retail is
- 18% of GDP,
- 4 million employees and
- Thousands of small-to-medium businesses.
Part 2: The struggle
There is no doubt, however, that retail recently has been extraordinarily challenging. I talked about my own experience, but whether you’re an employer or an employee, recent years have tested us in ways many other industries have not experienced. Where other businesses could more easily adapt to work-from-home models or ride out the fluctuations of the business cycle, retail has been on the front line.
During the COVID-19 pandemic retail experienced the worst of both worlds. For some businesses, lockdowns meant that customers evaporated overnight, leaving doors shuttered with no knowing when it would end. Many adapted by moving online, but not every business could pivot so swiftly or successfully.
For others, you were the only ones with the doors open – our frontline essential workers dealing with petty fights over toilet paper, navigating staffing shortages, and disrupted supply chains.
And just when we thought that was all over, inflation skyrocketed, and interest rates rose 13 times in response. Three years later and inflation is finally subsiding, but the cost of living is still a real concern to all Australians with the average basket of goods now 20% higher than it was in 2020.
Not only has this smashed consumer demand, it has led to horrific increase in shoplifting and rates of retail abuse. A recent survey found 87% of retail workers had experienced verbal abuse and 12.5% had experienced physical abuse in the past year. And the cost of retail crime is up 40% over the past two years. That’s not okay.
Part 3: There’s light but we need leadership
A rate cut last week was no doubt welcome news to retailers as well as households last week.
But the operating conditions for the retail industry have fundamentally changed.
As policy makers, we must do more than just wait for the economic indicators to turn around. Australia needs to start making its own luck by backing our businesses.
We need real policy leadership on the things that will make a fundamental difference to our businesses and our customers – instead of populist policies, like divestiture powers, that give only the appearance of action.
Part 4: a better place to run a business
So for me, I’m focussed on making it easier to start and run a successful business and my priorities are:
- Award simplification and flexibility;
- Reducing regulatory and compliance complexity; and
- Greater support for small and growing businesses.
Part 4A: Award simplification
The Australian Retail Association is right to focus on Award simplification and flexibility for worker and employers alike. The complexity of the award is a headache for employers and employees alike, without necessarily adding to worker protections or conditions.
A couple of years ago, I sat down with my niece to try and work out if she was being paid correctly for her first part time job. Even as someone who had run a retail business and employed countless staff, I spent nearly an hour poring over layers of documents, and still came away more frustrated than certain. It’s unnecessarily complex.
And it’s not just workers who struggle with this. Since 2009, 40% of businesses audited by Fair Work Australia were non-compliant in regard to wages – 40%! While there are some high-profile cases involving intentional underpayment, it is clear to any person in the industry that a significant proportion of non-compliance is related to complexity. The overwhelming majority are trying to do the right thing, and simplification is a win-win for employers and employees.
Certainly when I speak to significant retail businesses, many tell me they won’t contemplate an EBA because the award is so complex they worry they will somehow make a mistake and end up on the front page of the papers. Others outsource their HR functions just to manage the risk of the complexity.
For industries like retail that rely more heavily on awards, the Productivity Commission noted that inflexibility of awards was holding back businesses and employees, noting that most awards simply roll over with little understanding or consideration from either party about what’s best for them. The PC recommended the Fair Work Act be amended to simplify and adapt awards where feasible.
But this is easier said than done because industrial relations has become a political football. Instead of a policy setting to be carefully calibrated, it’s one of the defining ideological battlegrounds of political debate. It’s imperative that we break away from this zero-sum framing of employment contracts and negotiations and look at it as an opportunity for more win-win situations.
Part 4B: Regulatory and compliance complexity
Beyond awards, retail businesses must navigate a labyrinth of regulations and standards covering everything from product safety, labelling, advertising, environmental impact, workplace safety, and – of course – employment.
I recently visited a supermarket in my electorate that employs a full-time dedicated compliance person just to make sure that they fall on the right side of it all.
We have fallen into the trap of turning best practice into bureaucracy.
Again, this isn’t retail specific – I see and hear this everywhere whether its from builders, childcare workers, or medical researchers.
The Institute of Public Affairs estimates that the cumulative burden of red tape equates to $176 Billion a year, equivalent to 9.2% of GDP.
Right-sizing regulation for business must be a priority for the next Government with accountability and performance targets for streamlining or removing regulatory burden.
State Governments can assist simply by attempting to streamline and standardise processes, procedures and transitions as best as they can.
Payroll tax is one of the usual suspects. But even just trying to navigate something like the phase out of plastics that has left us with a raft of different regulations.
This is the role for national leadership, rather than waiting for state by state to navigate.
Part 4C: Small business
Lastly, we need greater supports for small businesses to start, grow and operate their businesses.
Small business represents 33% of the economy, 98% of all businesses and 42% of employment in the private workforce.
It is from little things that big things grow.
It is these businesses that have struggled the most, and it is these businesses that feel the burden of regulation most acutely because it is often done after hours.
As one small business owner said to me recently, “this just isn’t fun anymore”.
That’s why I – and 7 other members of the crossbench – have called for an increase in the small business threshold in the Fair Work Act from 15 to 25. This simple shift would lift some 46,000 small businesses out the regulatory framework designed for large businesses with the size and scale to manage the additional administrative burden.
It’s why I’ve also been calling for the Finance Minister to only procure from companies that pay small businesses within 30 days – as they do in the United Kingdom – to remove the long-tail of late payers that contribute to the financing issues for small businesses. And I’m working on how we can unlock more capital for start ups from our superfunds and other institutional investment.
And we must be making sure we have technology available to small businesses so that they can compete on scale with bigger, more established businesses.
Generally, on this front, small business has performed exceptionally well by being early adopters of technology. Social media, for example, has allowed small businesses to reach new markets and customers in targeted and cost-effective way.
But it also expands the availability of large, offshore competitors that compete on cost and convenience only available at scale.
Democratising emerging technology to introduce greater efficiency and productivity, and allow small local business to effectively compete in an increasingly digital world.
I, and the other members of the cross bench, have been consistently supportive of a higher, and permanent instant asset write off for small business supports this objective.
Conclusion
We are coming to an election – you might have noticed? And there is a lot of discussion about the cross bench. I wanted to say to this group, you have many firm friends in the independents. Many independents successfully fought for a scale back of the worst of the governments IR laws – in relation to casuals, in relation to small business thresholds – because myself and others come from the real world – come from running businesses big and small and we listen every day to the challenges that businesses in our electorate face. It’s not about ideology or politics – this is about practically, how can we help grow our businesses – because we know the prosperity of our country rests on the success of our businesses. My door is always open – especially to retailers – and my focus, and what I have seen from my cross-bench colleagues – is on pragmatic solutions that move things forward.
Australia is a lucky country – but we have to invest in our luck. The pendulum politics of successive governments making laws and the next lot promising just to unpick them – can be so destructive, particularly to businesses who just want certainty so they can invest. When I was in business, I never watched QT or followed what happened in the senate – I was too busy just trying to run my business – look after my customers. My focus will be on trying to make it easier for businesses to ignore Canberra, and just get on with the job, whatever shape the next parliament will take.
I know 1 rate cut doesn’t suddenly mean better conditions. But you are nothing if not a resilient bunch and this event represents an important gathering of retail leaders who can help steer that ship in.
Learn from each other – continue to serve with excellence, innovate and create. Know that you have friends in parliament who recognise the enormous contribution you make to our country.
Thank you.
