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Do longer opening hours increase spending?• Supporting economic growth?• Creating jobs?

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The crux of the issue: Will removing trading restrictions boost turnover?

• The New South Wales Government has proposed to remove retail trading restrictions on Boxing Day across New South Wales and remove the August bank holiday for finance workers.

• There is no debate that requiring workers to work on currently restricted trading days will have an adverse effect on work and life balance.

• The debate is if there is an economic benefit from opening more often, does this outweigh the adverse effect on workers lives.

• Supporters of removing trading restrictions argue that removing restrictions will provide a boost to the struggling retail sector allowing retail stores to create additional employment opportunities.

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Will we see increased spending or just a shift?

• At first glance, one could look at sales figures for retail stores in New South Wales that currently receive an exemption to trade on restricted days and see merit in this argument.

• These sales figures are the basis of the economic argument in favor of

removing retail trading restrictions.

• But does removing trading restrictions increase overall spending?

• Or does it simply shift spending that is currently occurring on existing trading days to newly unrestricted days?

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The Victorian Case Study

• The McKell Institute conducted research to test this theory.

• Victoria provides us with an excellent case study because it has a

history of changing trading restrictions on Easter Sunday.

– Prior to 1993 retail trading was restricted on Easter Sunday. – From 1993 to 2002, restrictions were progressively lifted and trading was

permitted.– In 2003, restrictions were then re-introduced by the then Bracks

Government.– In 2010, the Baillieu Government legislated to deregulate trading again,

taking effect from Easter Sunday 2011. – Victoria now only restricts trading on 2 ½ days per year.

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Easter Trading should increase during deregulation

• We undertook an analysis of ABS Retail Turnover data for each of the states and territories from1990 to 2011.

• First we compared retail turnover growth in Victoria for the Easter period of March and April with three other states that do not trade on Easter Sunday (NSW, WA, SA).

• This would allow us to detect whether there was any increase in retail turnover that could be directly attributable to state specific factors, such as removing trading restrictions on Easter Sunday.

• If Easter Sunday trading does provide a boost to overall retail turnover, we would expect to see a higher Easter period growth in Victoria during years when Easter Sunday trading was permitted and suppressed growth during years when trading was restricted.

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Heading

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No link between deregulation and increased spending

• These graphs show no statistical correlation between deregulation and improved performance over regulated states.

• WA, SA and NSW all maintained regulated trading on Easter Sunday throughout the entire period covered.

• Victoria did not perform relatively better or worse whether regulated or deregulated.

• It is evident from these graphs that retail trading is much more effected by other external factors, such as interest rate changes or consumer confidence levels, than it is by changes to the number of trading days.

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A second approach to test the theory

• The way in which days fall within a given trading month naturally impacts upon retail turnover.

• For example, a calendar month which sees five weekends fall within the month will inherently have a different retail turnover profile when compared to a month which sees four weekends fall within it.

• So we created seven different categories.

• A Monday category represents years when the 1st of March fell on a Monday. A Tuesday category represents years when the 1st of March fell on a Tuesday, etc.

• These Easter periods are identical in terms of when days fell during the period, they have an identical number of weekends, an identical number of Thursday night shopping periods etc.

• Therefore, the retail trading profile of these categories are identical, with the exception of changes to trading restrictions on Easter Sunday.

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On average unrestricted years should outperform

• Therefore, if removing trading restrictions does boost sales, we would expect to see years when Easter Sunday trading was allowed on average outperforming years when it was restricted.

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But they don’t – on average they perform worse

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No evidence removing restrictions increases trade

• There is no evidence that consumer spending increases when an additional day of retail trading is available.

• Consumer spending that occurs on previously restricted days is the result of purchases that would have taken place on regular trading days during that period.

• In the largely deregulated market that exists, retail turnover is driven by consumer spending capacity – how much money people have to spend.

• Due to the nature of retail trading, many retail workers regularly work on weekends and are not able to spend this time with family and friends.

• In New South Wales, the four most significant days of reflection (Good Friday, Easter Sunday, Christmas Day and Boxing Day) as well as Anzac Day morning are restricted to allow retail workers a small number of guaranteed occasions to spend with their family and friends who also have the time off. While Bank workers have had a Bank Holiday for 100 years in New South Wales.

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The case against is clear – the case for doesn’t stack up

• At a time when our community is suffering from a lack of interpersonal connection, and the challenge of balancing work and life commitments is becoming increasingly difficult for many, it seems ill advised to further accelerate this process by removing trading restrictions without a compelling case for the broader societal benefits.

• What therefore, would be the incremental benefit of giving up another public holiday in New South Wales?

• It is almost impossible to measure any increase in terms of additional turnover.

• But much easier to identify the adverse impact on affected workers and their families.

Do longer opening hours increase spending?

No

Thank you

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