ARA Executive Director’s wrap up

It has been an incredibly busy and productive couple of months for the Australian Retailers Association and I am pleased to report that we have seen a number of wins that have been unqualified successes.

These include:

Card Payment Reforms

The ARA is the only retail association to have worked with the Reserve Bank of Australia (RBA), supported by numerous submissions to the Financial Services Inquiry on card payment reforms.

As a result, earlier this month, the RBA released its proposed new standards for the Australian card payments systems. Provided that these proposed standards are accepted and implemented in May 2016 this should see a reduction in the cost of doing business for merchants.

The new draft framework will see American Express companion cards brought under the same regulations as that of Visa and MasterCard, as well as reducing the weighted average benchmarks for debit cards reduced from 12 cents to eight cents, which should see a drop in the cost of their acceptance.

An 80 basis points maximum proposed for interchange rates should also result in lower costs for merchants when accepting premium style cards. In the past merchants have disclosed to the ARA they are being charged as high as 1.4 percent to accept some premium cards.

The ARA believes merchants should have the ability to surcharge in particular as leverage to seek reduced costs from a merchants acquiring bank. We are supportive of the RBA’s stance on surcharging and will be pleased to see greater clarity around what can be surcharged and what cannot be surcharged by retailers should these proposals be enacted.

Modern Award Review

The ARA has lead the retail industry in the Award review process, being very ably assisted by The Master Grocers Association. An application has been made to the Fair Work Commission (FWC) to reduce the applicable Sunday penalty rate in the General Retail industry Award 2010.

There are good prospects the commission will grant the application to reduce penalty rates from the current 200 percent to 150 percent. The Commission appears to want to do so, and it is, in essence, hinting that it will if the employer parties present coordinate submissions and evidence to allow the Commission to overcome the case put by the Shop Distributive and Allied Union.

The evidential case by the employer parties has to date been better than any put previously (by order of magnitude), and we look forward to hearing the outcome of this crucial issue in the second quarter of 2016.

The ARA values the support that our members have provided thus far in assistance with funding of the case thus far, if you would like to support the association in further funding, or would like further detail on the Award Review please contact me directly at Russell.Zimmerman@retail.org.ag or phone 0418 796 805.

Russell Zimmerman
ARA Executive Director

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