Harvey calls for slashing of red tape

The executive chairman and co-founder of Harvey Norman, Gerry Harvey, has called on the federal government to eliminate the "100 foot high" tower of red tape constricting business growth as consumers still refuse to open their wallets at the shops.

Mr Harvey said he was at a loss to explain why higher consumer confidence following the election had not translated into improving sales, arguing real estate agents were doing well but discretionary retailers were missing out.

"Consumer confidence is higher," said Mr Harvey on Monday as his furniture, electronics and appliances group released like-for-like first quarter sales had risen 4.3 per cent, "but it hasn't translated into better business".

"Now that wouldn't be right if you spoke to real estate agents ... at the moment. Whether that's the election or low interest rates I don't know.

"[But as far as] retailers are concerned out there I haven't heard anyone say the election victory has resulted in increased business."

The comments gel with those of other retailers who have also failed to detect a sustained lift in spending. Wesfarmers boss Richard Goyder, whose retail businesses span Coles, Bunnings, Target and Kmart, and Woolworths CEO Grant O'Brien have both said they were yet to see rising consumer spending at their stores.

Harvey Norman's flagship Australian store base was showing some signs of improvement with September quarter sales up 1.2 per cent - the retailer's third consecutive quarter of sales growth for its local operation. Comparable sales were stronger, up 2.9 per cent.

Mr Harvey said red tape was harming growth and reining in business expansion plans. He remained cynical that the new government would remove enough red tape to make a difference.

"The government has come in said they are going to do something to get rid of red tape, and my bet is they will do a little but no where near what's got to be done, not a within a bull's roar."

Last month Coles boss Ian McLeod called on the Productivity Commission to investigate the cost of red tape to the economy, saying it was constraining business.