Retail spans many different sectors of business, covering everything from hardware to clothing boutiques. This means some retailers will be directly affected by regulations which won’t be a consideration for others: pharmacies are likely to be interested in the long-term effects on Pharmac of National’s plan to conclude the TPP 11 negotiations, for example; but had the Greens achieved more of a majority, those in the grocery industry would have been watching its proposal to ban plastic bags closely.
Earlier this year, Retail NZ published a “wishlist” spelling out its priorities for the 2017 general election. Lower income taxes, greater controls on council rates, a review of GST
and more national consistency on regulation were at the top of the list, plus a call for the new Government to address the issue of foreign retailers selling goods online into New Zealand without paying GST.
Retail NZ also called for tax cuts through threshold adjustments, pointing out that more money in consumers’ pockets means an increase for retailers, too.
“Taxes and rates make up a significant proportion of household expenditure, and if government and councils take less from people’s pockets, consumers will be able to make their own spending decisions. This is likely to have a significant positive impact on the
Retail NZ’s full election statement also calls for a national approach on nationwide local government issues such as trading hours and the sale of alcohol; national regulation on plastic bags; increased transparency and oversight of merchant service fees; and the establishment of a police taskforce for retail crime, plus a complementary social change programme and an infringement-style ticket for small-scale theft.
What do The Register readers want from the next government?
NZ Retail’s election issues survey was launched on August 17 through our website The Register and ran through to early September. It was open to everyone in the retail industry, and aimed to cover a broad range of talked-about topics which could be influenced by politicians’ decisions over 20 questions.
As well as being asked straight questions, the anonymous respondents were given the opportunity to submit comments on each topic.
The least-controversial question was “Should there be a standard notice period ahead of regulatory changes which affect business?” Of those who answered, 94 percent voted “Yes”, with the remaining percentages split between “No” and “Unsure”.
Also clear-cut were the responses to “Should the government’s planned series of four 10-percent annual tax hikes on tobacco be abandoned?”, to which 91 percent of respondents answered “No”. In response to a question about whether the New Zealand branches of multinational corporations should pay more local tax, 91 percent of respondents voted “Yes”, and 88 percent felt offshore suppliers should pay GST on low-value goods sold into New Zealand.
Other queries with more than a 60 percent margin were:
- “Should regulations on casual and zero-hour contracts be tightened?” 66 percent ✓.
- “Should the minimum wage be raised again?” 61 percent ✓.
- “Do you support the introduction of gender quotas at boardroom level?” 70 percent X.
- “What about mandatory disclosure of boardroom gender ratios?” 64 percent X.
- “Are there enough police resources committed to tackling the spike in aggravated crime against retailers?” 79 percent X.
- “Should an infringement-style ticket for small-scale theft be introduced?” 67 percent ✓.
- “Should the consents process for developments be simplified at a local government level?” 91 percent ✓.
- “Should councils be encouraged to standardise their rules around domestic issues such as signage and parking?” 85 percent ✓.
- “Should the legislation governing the sale of liquor be relaxed?” 82 percent X.
- “Should plain packaging for tobacco products be introduced?” 64 percent ✓.
- “Should there be greater legislative oversight over credit and contactless debit card payments fees imposed by banks and card companies?” 85 percent ✓.
Tightly contested queries were:
- “Do you support the recent moves from New Zealand Immigration to restrict the Skilled Migrant Category and make it harder for those earning less than $41,538 per year to live and work in New Zealand?” 49 percent ✓, 46 percent X.
- “Should salary caps for chief executives be introduced?” 54 percent ✓, 44 percent X.
- “Should support policies for staff experiencing domestic violence be mandatory?” 52 percent ✓, 42 percent X.
- “What about support policies for transgender employees?” 46 percent each way.
- “Should harsher sentences be enacted against shoplifters and youth offenders?” 58 percent ✓, 30 percent X.
- “Should retailers be permitted to arm themselves with weapons to defend against robberies?” 47 percent X, 44 percent ✓.
- “Should more resources be committed to businesses affected by earthquakes in Wellington, Christchurch and Kaikoura?” 46 percent each way.
Robust conversations were had in the alternative answers for queries about a potential plastic bag ban, and whether begging in public should be criminalised. More than half of the respondents felt plastic bags should be banned at a national level, but besides the 64 percent who supported a ban, a further 12 percent had alternative ideas for how the plastic bag problem could be handled. Just 24 percent voted to retain the status quo.
In response to “Should begging in public be criminalized?”, 50 percent of respondents voted “Yes” and 34 percent “No”. Further suggestions included placing restrictions on where and how long beggars can occupy public spaces, and creating a licencing scheme like that applied to buskers in some cities.
“Should more government resources be committed to tackling homelessness?” also generated comment, although it had a firm “Yes” majority of 64 percent. Other responses included “Depends on the situation the person is in,” a request to get affordable social housing up as quickly as possible, and a comment calling for greater control over the property market.
Large retailers weigh in
As well as The Register’s readers, we also extended an invitation to 17 large or medium-sized retail companies to comment on their hopes for the next government’s priorities. In the lead-up to the election, there seemed to be a reluctance to comment publicly on political issues – only James Walker, spokesman for Countdown supermarkets, and The Warehouse Group chief executive Nick Grayston accepted the opportunity.
In response to our questions about employment and social responsibility, Walker says Countdown employs 18,000 Kiwis and challenges itself to be New Zealand’s leading employer. It pays well above minimum wage for check-out operators; has abandoned youth rates; has never had zero hour contracts; and does not use the 90-day trial.
“We were the first employer in New Zealand to implement a gender transitioning policy, and were among the first few businesses to introduce a family violence policy,” Walker says. “We encourage other employers to look at what they can do to support their teams, and are always willing to share our policies and practices with others.”
Grayston emphasised the changing nature of the employment environment in his answer, saying The Warehouse Group would like the next government to focus on helping to equip New Zealand’s workforce with the relevant tools and skills to succeed in an increasingly digital business environment.
“We’re seeing an exponential rate of change and disruption that is not just limited to retail, but spans across a number of industries and countries,” Grayston says. “The nature of work is being transformed through AI and robotics and the need for adaptability has never been more important. The New Zealand workforce will need to engage in lifelong learning in order to be able to adapt.”
Regarding plastic bags, Walker says Countdown has communicated that it would support Government-led action on single-use plastic shopping bags: “What we want is the right environmental outcome and a level-playing field among all retailers, and a solution that works for customers. Government will need to take the lead to make this happen.”
The Warehouse Group, too, is ready to accept change on plastic bags. Grayston says it supports regulation of the issuance of plastic bags at a national level, explaining that the 10-cent charge for plastic bags it introduced in 2009 led to a “sharp and sustained reduction” in their use. Since 2009, the group has donated more than $3.8m to charities across New Zealand from this initiative.
Issues discussed by Countdown and not The Warehouse Group include crime – Countdown encourages the police to do whatever they can to protect retailers large and small from crime.
Walker also mentioned fees on debit and credit cards, saying Countdown feels these fees are high in New Zealand, compared to similar international jurisdictions. This is a big issue, especially for smaller retailers, he says, and while Countdown is waiting to see what the outcome of the Government’s request that Payments NZ works with banks on greater transparency, it thinks further Government intervention is “probably necessary”.
The Warehouse Group brought up the de minimis loophole allowing foreign companies to sell goods online into New Zealand without paying GST as a key issue. “As a company that is and has always been committed to helping New Zealand flourish, we think it’s important that overseas-based companies also contribute,” Grayston says. “In such a competitive environment it’s vital that all retailers are on a level playing field.”
Grayston also noted that The Warehouse Group is in strong support of increased funding and promotion of electric vehicles for their role in supporting sustainability.
Editors note: At the time the current issue of NZ Retail went to print, the election had concluded and New Zealand’s government was selected to be the Labour party in collation with the Greens.
Pre-election promises by party
Elections are a time for politicians to put their party’s best foot forward. We’ve gone through the policies of the four parties with the highest majority of votes, and extracted the most retail-relevant sweeteners and concerns from each.
- Its proposed expansion of the public-private partnership programme will indirectly affect retailers through its eventual impact on roading and infrastructure, which supports business activity.
- Similarly, National’s intended investment in Auckland and Wellington commuter rail networks will make impact on foot traffic in New Zealand’s inner cities.
- If re-elected, National plans to make its “boldest-ever trade push” to complete trade agreements such as the TPP 11; begin free trade agreement negotiations with the European Union, the United Kingdom (following Brexit), Sri Lanka, and MERCOSUR countries; seek to complete negotiations with the Pacific Alliance and RCEP countries; and upgrade existing free trade agreements with China, Singapore and ASEAN.
- Labour’s workplace relations package includes a proposal to increase the minimum wage to $16.50 per hour and promote the living wage, with a view towards lifting the minimum wage to two-thirds of the average wage as economic conditions allow. It supports extending paid parental leave to 26 weeks.
- Labour also plans to replace the 90-day trial legislation with “fair trial periods that provide both protection against unjustified dismissal” and a new tribunal-style referee service for claims of unjustified dismissal during trial periods. It intends to introduce ‘Fair Pay Agreements’ (FPAs) to set basic standards for pay and other conditions within industries.
- The hardest-hitting of the policies in Labour’s tax plan are aimed at the housing market, but retailers affected by the recent entry into the New Zealand market of multinationals like H&M will be pleased to see it plans to make sure foreign multinational companies pay appropriate tax. Labour is also consulting on the introduction of a Diverted Profits Tax.
- The party also plans to reverse National’s proposed tax cuts, and its proposal to abolish secondary tax may affect some retail staff who juggle multiple part-time jobs. Retail has a higher proportion of part-time and casual staff than most other industries in New Zealand.
- In Labour’s health package, proposed plans to fund and support healthy eating and nutrition for children through policy around advertising unhealthy food and implementing clear front-of-package labelling may affect supermarket and grocery retailers, plus retailers who manufacture and sell food products.
- NZ First has an ambitious portfolio of policies across labour and employment. It hopes to raise the minimum wage to $20 per hour over three years starting in 2018, with tax assistance provided for employers. It also intends to abolish the “starting out wage” for young people, and to remove secondary tax for workers with more than one job.
- Further, NZ First proposes to set minimum redundancy provisions based on twice the normal contractual notice period up to a maximum of 13 weeks, and amend the Companies Act so wages and salary have equal priority with secured creditors.
- It also wants to introduce paid paternal leave of two weeks rising to four weeks; supports increasing paid maternity leave to 26 weeks; and to review and amend employment laws with an eye towards casualisation of employment practices. Amending the Health and Safety at Work Act 2015 is on the cards, too.
- Taxwise, the party plans to remove GST from basic food items, and from 1 April 2019, reduce company tax rates over three years to 25 percent and introduce an export tax of 20 percent on export-generated income. It also promises to “give shareholders of large companies, including cooperatives, a ‘say on pay’ for directors and CEOs”. NZ First has signalled an intention to crack down on corporate tax avoidance and base erosion, especially with ecommerce providers like Amazon.
- Regarding trade, NZ First opposes the TPP-11, and hopes to revise current FTA deals to “make sure they are real and are in our interests”. It intends to renegotiate existing poor-quality deals, and prioritise free and fair trade deals with Japan, United Kingdom, EU and the United States.
- Likely to be of greatest interest to retailers is the Greens’ plan to ban plastic bags. The party intends to immediately introduce a 20-cent levy on single-use plastic grocery bags, and phase them out completely by the end of 2020. Revenue from the levy will fund community-led environmental clean-ups and research and development into alternatives to plastic.
- As part of the same policy, the Greens also want to reduce unnecessary plastic packaging in supermarkets and shops by declaring plastic packaging a “priority product” under the Waste Minimisation Act.
- Under the proposed tax breaks for clean transport options, electric vehicles and public transport passes provided by employers will be exempt from fringe benefit tax. This will benefit larger corporate retailers.
- The Green Party has a broad policy focus on securing pay equity for women. Of a number of policies addressing this, those likely to directly affect retailers include its support of the failed Equal Pay Amendment Bill, which would require all employers to collect information about how much male and female employers are paid in order to make it easier to identify areas where there’s discrimination; and a planned amendment to equal pay laws to place the onus on employers to prove they’re paying women fairly.
- As part of its ‘Budget for all Mothers’, the Greens plan to extend sick leave to a minimum of 10 days per year and make the $220 per week Parental Tax Credit available to all families who don’t get paid parental leave.
- The Greens’ policy on ‘Honest food labelling’ is similar in intent to Labour’s. It will include mandatory country-of-origin labelling for fresh and single-ingredient food, and a mandatory consumer information standard aimed at clarifying the definition of “free range”.