SHOP TRADING REFORM
Second Reading Speech on the Shop Trading (Reform) Bill
by Hon. Mark Birrell M.P.
Minister for Industry, Science & Technology
Hansard Extract -
16th October 1996
Legislative Council
Victorian Parliament
The Shop Trading Reform Bill introduces comprehensive changes to the laws that control the retail trading environment in Victoria. It has become increasingly obvious to this government and the people of Victoria that the current shop trading laws are not serving the community in the way it wants to be served. The Government has therefore acted, as promised, to review Victoria‘s shop trading arrangements to bring them into line with community needs and expectations.
This bill is essentially about freedom. It is about the freedom to trade; it is about the freedom to shop; it is about the freedom to work; and it is about the freedom of local communities to determine their own retail commercial environment. Those freedoms constitute the principles which underlie the purpose of this legislation.
The purpose of this bill is to substantially liberalise shop trading arrangements so that consumers, retailers and communities will be able to decide for themselves when they want shops to open. The bill is a result of the government’s recent review of shop trading laws under a commitment given to the community prior to the last election.
The fundamental freedoms of the bill are clearly not evident in the current arrangements for shop trading, save for the essential deregulation which occurred in the capital city from December 1992. At present in the balance of the metropolitan area non-exempt shops must close at 5.00 p.m. on Saturday and remain closed through Sunday. In non-metropolitan areas the arrangements are even more restrictive. A bewildering array of exemptions and special orders has built up over time to overcome the major inconvenience that these arrangements present to the community.
Under the new arrangements there will be unrestricted trading for all shops on most days throughout Victoria. This will mean that those shops that are currently restricted in their trading hours on Saturdays and Sundays will now be allowed to open. The only exception to this will be that most shops will have to close on Christmas Day, Good Friday and before 1.00 pm on Anzac Day. Those limited number of shops that are currently allowed to trade on those days will still be allowed to do so. These specified closing days recognise the special significance these days hold for members of the community.
However, the government recognises that there may be retailers who do not wish to open at a particular time or communities that do not want Sunday trading in their areas, particularly in the rural communities. To acknowledge the special circumstances of our rural areas and to protect the interests of the community at large, the government has included two special safeguards in the new arrangements.
Firstly, no lease will be allowed to contain a provision requiring any metropolitan shop to open between 5.00 p.m. and midnight on Saturday or at any time on a Sunday, or any non-metropolitan shop to open between 1.00p.m. and midnight on a Saturday or at any time on a Sunday. To give tenants extra protection, the new arrangements will give tenants access to the remedies of the Retail Tenancies Act 1986, including the remedy for injunctive relief. This access will be particularly important if tenants are faced with intimidatory pressures from a landlord. Further, this avenue of redress for tenants will be less expensive and less protracted than traditional forms of legal proceedings.
Secondly, if 10 per cent of a municipality’s electors present a petition to the local council requesting a change to local Sunday shop trading arrangements, the council will be required to hold a poll on the issue and abide by its results by instituting changes in local laws. Polls will not be able to discriminate between different types of shops and exempt shops will not be affected by a poll.
To ensure that any local arrangements keep pace with changes in community attitudes, any local laws made in this way will lapse after three years. At that time, if the community wishes to reinstate any restrictions on Sunday trading, a new poll will have to be held and new local laws put in place. With the new right for community decision making and the freedom for determining local retail commercial arrangements will come new community responsibilities. Via their councils, communities will have to bear all of the costs of any polls and any subsequent local laws put in place to control Sunday trading. These will include the costs of the polls, the costs of putting any new arrangements into place and the costs of monitoring and enforcing the new arrangements.
Who will benefit
Consumers will benefit directly from these shop trading arrangements because they will have the opportunity to shop at the times most suitable to themselves, rather than when the government tells them they are allowed to. Victorian society has changed greatly in recent years. Almost 50 per cent of Victorian couples with dependants are two-income families, about 10 per cent of Victorians live alone and in about 51 per cent of single-parent families the parent works. Not only have families changed but the way people work has changed. Many more people now work shiftwork, part-time or casual work.
Restrictive shop trading arrangements just do not work for people in those circumstances. For all of those people standard shop trading hours can be inconvenient or difficult. It is time these people were freed from the shackles of regulated trading hours.
Shopkeepers will also benefit. The new rules will allow traders to choose trading times which best suit them while retaining safeguards stopping landlords from forcing them to open when they do not want to. The community as a whole will benefit. The retail trade sector is a major part of the Victorian economy with links throughout all other sectors, directly employing around 380 000 people in 1995 and responsible for $2.2 billion worth of turnover in June 1996 alone.
The retail sector is a dynamic and healthy part of the Victorian economy which should be encouraged and nurtured rather than stifled by placing artificial restrictions on how people may run their businesses and generate jobs and wealth for all Victorians.
This bill will present opportunities for growth in the retail sector and in employment for Victorians. Community support for the changes is also high. A recent poll showed that around 70 per cent of Victorian support Sunday trading.
Why change is needed
It has become increasingly obvious that the present shop trading rules are not working. Detection of breaches of the rules has become ever more difficult and costly, prosecution of offenders is less effective, the processes of seeking exemptions are difficult and costly for all parties and the entire system of rules and exemptions has become so complex and confusing that it is rapidly becoming unmanageable.
The current system directly conflicts with a number of this government’s policies which received strong endorsement at the last election. The coalition mission statement promised to increase jobs, business and educational opportunities for all Victorians; this bill will do that. The coalition small business policy promised to further reduce unnecessary red tape and regulatory controls; this bill will deliver on that. The coalition industry policy statement promised to keep out of the way and let business get on with the task of creating wealth; this bill does that.
It is definitely time for change. A system based on principles of freedom, which this bill introduces, will better serve the current and future needs of Victorian society.
Statement under section 85 of the Constitution Act 1975
I wish to make a statement under section 85 of the Constitution Act 1975 of the reasons for altering or varying that section by this bill. Proposed clause 10 of the bill provides that it is the intention of that clause to alter or vary section 85 of the Constitution Act 1975.
The reasons for limiting the jurisdiction of the Supreme Court are as follows. The intention is to apply provisions of the Retail Tenancies Act 1986 allowing tenants to seek the remedies provided for determining disputes under that act, including immediate injunctive relief from oppressive landlords. In this case, tenants would be able to notify a dispute under the Retail Tenancies Act 1986 where landlords attempt to force upon tenants leases containing requirements that they open when they do not wish to. This measure is introduced to avoid costly and time-consuming litigation in a matter which is readily amendable to non-judicial determination. In the commercial arena such cost and time savings are of great importance.
Conclusion
This bill signifies this government’s commitment to the right of freedom of Victorians to trade, shop, work and determine their own environment. This bill meets community wishes for a more liberal shop trading system while introducing new safeguards to protect community interests. It gives local communities a say in the governance of local arrangements while ensuring that they appreciate the costs of their decisions. It anticipates future changes in community requirements by containing automatic provisions to ensure that any local arrangements keep pace with community wishes. The principles of freedom in the legislation constitute a better deal for Victorian retailers, consumers, workers and local communities.
I commend the bill to the house.
RETAIL TRADING LAW
Speech by Hon. Mark Birrell MP
Member for East Yarra Province on the
Labour and Industry (Shop Trading) Bill
Hansard Extract
Legislative Council
20th October 1983
(Earlier [1983] speech on the need to reform the State's discredited shop trading law)
As a Liberal who believes in individual liberty and the pursuit of enterprise, I cannot support the Bill. The Bill, if passed, will place massive and unwarranted restrictions on commercial activities in the State at a time when Victorians are already finding it difficult to cope with the heavy-handed, high-taxing approach of the current Government.
Under this Draconian measure, the retail trade will be all but abolished at week-ends. Numerous stores that are currently trading within the law, such as small, medium and large supermarkets, will have to close down. They will no longer be able to provide a service to consumers who have greatly appreciated the fact that they can shop at week-ends. The Labor Party will see that those outlets will not be able to open.
The Liberal Party opposes the Bill because it will limit economic activity and growth and therefore have a negative impact upon the already poor employment position in Victoria. Far from protecting small business, it will stifle initiative, discriminate against many successful business enterprises and radically restrict the operation of our competitive market economy.
If ever there were an issue that faithfully portrayed the difference between the Liberal and Labor philosophies, this is it. Liberals believe, as a matter of principle, that people should be free to determine their own destiny. The role of the Government and the bureaucracy should be supportive, not dictatorial.
By contrast, the Labor Party subscribes to the view that the State is "all wise". It is therefore no surprise to witness the Government instinctively introducing a Bill that further restricts the rights and freedoms of consumers and retailers. The Liberal Party is not alone in its view that the direction of the Australian Labor Party policy in this important area is thoroughly wrong. As the Age newspaper said in an editorial on 15 October 1983:
"the State really has no business to tell people where and when they may or may not shop, work or trade, and still less to enforce its arbitrary decrees with draconian penalties. These are choices best left to individuals and enterprises who are the best judges of their own interests and convenience. It is quite
improper for a Government to favor one section of the business community, and one section of the workforce, against others. It is also strange that a Labor Government should discriminate against bigger shops with more employees and lower prices in favor of some small shops with few employees and higher prices. The legitimate interest of shop assistants can be protected by industrial tribunals without restricting trading hours, and the interests of consumers are best served by free choice and healthy competition. Retailers should be free to open or close when they wish."
Such views are not restricted to the Age. The Herald in an editorial on 13 October 1983 stated:
Draconian steps to tell us where and when we can shop present a bleak future for retail trading in our State.
The magazine, Australian Business, in an article by John Gilmour on 21 September 1983, savaged the Government's Bill, stating that it would quite simply "stop consumers from spending money" and concluded that, in substance, it:
...will do nothing more than build resentment and disrespect for laws which cannot survive in the long run.
The Bill certainly will not survive in the long run; the tragedy is that the Government seeks to impose it on us in the short run.
Restricted retail trading hours are not popular with the public. Empirical evidence in the form of national and State opinion polls indicates that most people support extended and deregulated trading.
I cite as an example the Morgan Gallup poll published in December 1982. It graphically illustrates the broad support for the Liberal Party policy on retail trading hours. It also reveals how most Victorians, and an overwhelming number of young people, oppose the policy of the Labor Party on retail trading hours. The poll indicated that 55 per cent of people living in Melbourne wanted extended shopping hours and, of those aged between 20 and 29 years of age, a further 67 per cent supported the right to shop at week-ends. It is also interesting to note that a majority of Labor Party voters also supported extended trading hours.
This poll was reinforced by the results of a further Morgan Gallup poll in July 1983, and it proves beyond doubt that the Government is out of touch with the views of the community at large. The Labor Party wants to turn back the tide of public opinion, but it will come to realize that it is both politically and economically unproductive to attempt to turn back the clock. Victorians, and especially young Victorians, will not accept such a move.
It is time for the Government to accept that we live in a rapidly changing society. Attitudes, employment patterns, priorities and modes of behaviour have all altered considerably over the past 40 years, but the Labour and Industry Act has failed to mirror these movements. Let honourable members not overlook for example, that the percentage of women in the work force has grown from 25 per cent in 1947 to 37 per cent today.
In addition, a higher proportion of young working people are living apart from their parents. All of those factors have led to a change in traditional consumption habits. Single people and women now constitute over 50 per cent of the work force. Those people do not find existing retail trading hours adequate for their needs.
International trends in this area are identical to our own, but the response of Governments in other countries has been to deregulate trading hours, not to control them further as in Australia. As Geoff Hogbin, the Associate Director of the Centre of Policy Studies at Monash University has said in his excellent book, Free to Shop:
There must be widespread awareness that trading hours are more liberal in other countries and that there has been a tendency towards liberalization rather than restriction.
The Government has, through its Bill, ignored overseas developments. Worse still, it has closed its eyes to progressive steps that have been taken interstate.
In New South Wales only a week ago, Mr. Justice Macken of the Industrial Commission of New South Wales, brought down a major report that recommended extended retail trading hours. The report, which was commissioned by the Wran Government, suggested that shops be able to open all day Saturday and on a further night each week. He said that this would benefit customers and lead to the creation of 20 000 permanent new jobs. Therefore, a neighbouring State is going to adopt a policy, which the Victorian Labor Government says is not in the interests of consumers, workers and retail traders.
Why is the Victorian Australian Labor Party so conservative on this issue? Because it has given in to the lobbying of two vested interest groups: The Shop, Distributive and Allied Employees Association and the small traders lobby. As Claude Forell, writing in the Age on 14 September 1983 put it:
The Government is simply giving in to pressures from those who believe they would benefit from the suppression of free competition.
The Australian Labor party has promised that "There will be no extension of shop trading hours in the life of this Parliament". It is, therefore, locked into defending yesterday's laws based on yesterday's thinking.
So what impact will the Bill have? Unquestionably this initiative is anti-growth, anti-jobs and anti-consumer. A particularly insidious effect of the proposed legislation is that it will penalize small businesses that through enterprise and zeal, grow into larger operations. Shops that employ twenty or more people will be shut at weekends. What worse discrimination could one have?
Does the Government forget that some of Australia's greatest companies were once just small stores? I quote G.J.Coles & Co. Ltd. as an example. In 1914, the company opened a single-fronted variety store in Collingwood, selling products at threepence, sixpence and one shilling. In 1924, Coles opened a large city store and, through good management and fair competition, the company has grown to a situation where it now employs 70,000 people. It is an Australian-owned enterprise and, in every sense, an Australian success story.
What are we to tell small businessmen who share the aspirations of Coles for growth and success? The Labor Party is telling them, "If you compete and employ more than twenty people, do not bother trying to trade in Victoria". It is no wonder that business entrepreneurs are avoiding this State like the plague. They understand that, unlike other parts of the world and other States in Australia where week-end trading is encouraged, in Victoria one will suffer a massive penalty if one tries to meet the demands of consumers on Saturdays and Sundays.
I turn now to examine the penalties imposed by the Bill, which include a massive $50 000 fine for those who breach the law. This proposed penalty is out of all proportion to the social gravity of the supposed offence. The fine Parliament has set for being drunk and disorderly is $100; it is $500 for soliciting for immoral sexual purposes and it is $2000 for attempting to influence or obscure electoral commissioners, but a person who dares to sell socks on a Saturday afternoon is fined $50 000! What an outrage!
The immediate result of the Bill being passed is that consumers will find their local supermarket closed this week-end. The estimated 250 000 people who have happily availed themselves of week-end shopping will be told that it is now against the law.
Approximately 2000 people, many of them young Victorians who would otherwise have no work, will find that they have been stood down. Coles, for instance, will cut its paid work hours by 4228 hours a week, equal to over 100 full-time jobs - all gone as a result of the Labor Government.
What is one left with under this piece of proposed legislation? One is left with the current uncertain and discredited Act, which is made even worse by these new regulations. So there is extra confusion, more control and greater inconsistency, because some shops will be allowed to trade on week-ends but others will not. The ruling line between them will always be unclear. Indeed, the Bill, if passed, will leave the final
decision on who can trade up to the Minister of Labour and Industry, and nothing could be more unclear than that.
I turn now to some of the exemptions that are already granted under the Labour and Industry Act. The Act is a hotch-potch of rules, sub-rules and exemptions, which no trader can fully understand and which inevitably lead to confusion when someone tries to trade within the law, as Coles, Safeway and Myers have tried to do.
I shall cite some of the exemptions to provide an example of what a mess the Act is. The following bodies are exempt from the operation of the Act: Holiday resorts; work camps; tourist resorts; the City of St. Kilda, market sites; festivals and tourist precincts.
The areas which therefore already have a whole-year retail trading exemption under the Act are as follows: City of Castlemaine; Shire of Chiltern; Shire of Dimboola; Shire of Flinders; Shire of McIvor; City of Mildura; Shire of Mornington; Shire of Phillip Island; Town of Portland; Shire of Rosedale; Shire of Stawell; City of Swan Hill; Shire of Tambo; and the Borough of Wonthaggi and one can add to the list places such as Collins Place in the City of Melbourne. All of these areas are exempt, but I ask honourable members to find a logical thread that ties all of the areas together. There is not one.
The Liberal Party suggests that the law be completely changed; the Labor Party's approach is to confuse it even further. The exemption should be total. Shoppers should be free to shop when they wish and traders to trade when they wish.
It has been argued by some Labor Party members that there is no demand for longer shopping hours. Mr. Landeryou even suggested in this debate that supermarkets had concocted a demand to support the policy. That is nonsense. As Mr. Hogbin said in his book, Free to Shop:
If a retailer believed that consumers did not want additional shopping time, he would not be concerned about relaxation of restrictions because he would have no reason to fear loss of trade and profit to stores which chose to open on week-ends. Likewise, he would not need to adjust his pattern of work, because consumers would not change the times or places at which they shopped.
Indeed, if consumers did not want to shop at week-ends, small traders would not be concerned about allowing them to do so. Many Victorians - especially working women and young people - wish to shop on Saturday afternoons and Sundays. Why should the Government forbid them from doing so? There is overwhelming support for the extension of trading hours, but the Bill moves in the opposite direction.
The Bill is a cynical and misguided attempt to restrict trade and to pay a favour to two minority groups. I believe such a situation is untenable and I will therefore vote against the Bill. I conclude my remarks by quoting from the Liberal Party's document entitled "A New Liberal Policy on Retail Trading Hours", which was issued in March 1983. It states:
The Victorian Liberal Party believes that the time has come for a reformist approach to shop trading hours legislation. The Liberal Party believes that there must be greater opportunities for people to shop where they want, when they want. At the same time, the Liberal Party recognises the understandable concerns of retail employees and small businesses about the implications of extended trading hours. The Liberal Party believes that by combining de-regulation of retail trading hours with the abolition of week-end penalty rates, thousands of new jobs will be created in the retail industry.
The Bill moves against the public interest and deserves to be defeated.