11 October 2012 —The Shopping Centre Council of Australia says the Victorian government has taken a misstep in its plans to reform its planning zones.

The council’s recommendations include providing a policy framework, removing all floor space caps, removing impediments to investment and testing the consequences of the new zones.

The council’s submission has a number of concerns. They are:

  • There is  no clear policy or economic basis for the reforms. The Retail Policy seems to have been abandoned. Aside from some commentary in the discussion paper and some ministerial statements, it is difficult to fully understand what is driving the reforms. “The reforms will undermine existing investment and proposed development (and economic benefits), but this doesn’t seem to have been considered.”

It is clear there’s a simplistic “economic” driver of the reforms – that is, increased land supply will increase investment, which will increase competition and reduce occupancy costs and retail prices. “We do not believe this proposition has been fully tested”

  • The reforms will create a two-tiered system, whereby some retail formats will have no restrictions, for example, overlays and developer contributions, while others will. If “competition” is a pursuit, then all Government imposed, that is, non-market, requirements should be equalisedUnintended consequences have not been fully considered, such as the distribution of retail from activity centres to out-of-centre locations and consequent loss of agglomeration benefits. The reforms will undermine the activity centres policy, as well as some existing and proposed investment in shopping centres. “We are concerned that the competition and economic benefits of activity centres have not been fully considered which are addressed in the attached Benefits of Activity Centres report prepared by SGS Economics and Planning.”

“The reforms propose to allow retail into every commercial zone, with substantial change in the ‘as of right’ retail uses, which can locate without any economic or planning assessment as to the development’s net community benefit or economic impact,” the submission says.

“Specifically, we consider the proposed reforms will have the following impacts:

  • Undermine good planning principles to consolidate retail and other land uses in agreed locations.
  • In areas of limited convenience retail demand, limited population growth or where a good network of supermarkets already exists, may result in a reshuffle of supermarkets away from “in-centre” locations to sites which are “out of centre”. These sites are cheaper to develop due to lower land values and often do not require high quality design, contributions to public realm, or other community benefits which are typically required in “in-centre” locations.
  • May place additional economic pressure on speciality-retail chains and small business which rely on major retail anchors, particularly supermarkets, to draw footfall and critical mass of customers to their stores.
  • May result in the failure of existing retail centres and main streets, creating urban ghost towns similar to those we have seen in the United States of America and in regional Australia, where supply often outstrips demand.
  • May not result in additional competition in the supermarket sector, as the existing major players “roll out” their existing 2000 square metre supermarket model.

The Ministerial Advisory Committee was announced on 14 September. Chair Geoff Underwood and members Chris Canavan QC and the Planning Institute of Australia’s Liz Johnstone will review all submissions and provide advice back to the government by 30 November 2012.