Professor Allan Fels has called on the NSW Government to act on recommendations by a report revealing how a restrictive and out of date planning system is holding back major retail developments in NSW.
The report, Investment + Competition = Jobs, prepared by JBA and Deep End Services, outlines a number of key findings and recommendations that would deliver more choice and encourage greater competition in the retail sector.
“I want to see the economic benefits of the large format retail sector realised. To achieve this, the NSW planning system needs to recognise and cater for the unique physical and operational requirements of the sector,” said Fels, former chair of the Australian Competition and Consumer Commission, who has endorsed the report.
The report provides evidence supporting major planning changes, in line with recommendations of previous reviews, including by the Productivity Commission, and the Draft Harper Competition Report.
Current planning laws place restrictions on new large format retail (LFR) stores, resulting in high prices for consumers and restricting choice. According to the report, the under supply of stores is equivalent to three to four new homemaker centres and 2500 jobs.
Traditional shopping centres accommodate customers who buy products that can easily fit in a shopping trolley, however, large format retailers need bigger sites and vehicle access for large goods, such as hardware, electrical, white goods, furniture, and car parts.
In comparison to Melbourne and Brisbane there are much fewer LFR stores within a reasonable drive of Sydney.
Philippa Kelly, CEO of the Large Format Retail Association (LFRA), backed the report findings, saying there is considerable uncertainty and inflexibility in planning and zoning laws.
The LFR sector accounts for 22 per cent of total retail sales generated by the retail industry.
The Productivity Commission noted that Victoria is ahead of other jurisdictions in implementing leading practices for planning and zoning outcomes, while NSW requires further improvement.
The report says the NSW Government could take immediate action to replace the Draft Activity and Centres Policies with a revised Retail Policy more in line with new Victorian planning laws.
“A review of current zones is vital as almost half of Sydney’s councils do not have a zone that specifically permits LFR uses. This includes Penrith, Blacktown, Camden, Campbelltown and Liverpool, which are all prime locations for large format retail stores,” said Kelly.
Such changes would increase the supply of available land for LFR developments and enable a greater level of flexibility within the planning system and help stimulate economic activity, promote investment, deliver employment growth, and provide choice to local communities.
Addressing the LFRA 2015 NSW Forum, the Parliamentary Secretary to the NSW Premier, David Elliott, MP, said he is conscious of the challenges facing the LFR sector.
“The Government is aware of the report being tabled and of the varying definitions between NSW and Victoria, and that conditions are more attractive in Victoria,” Elliott said.
This story first appeared in Inside Retail PREMIUM issue 2035. To subscribe, click here.