Harvey rails against 'tower' of red tape harming growth

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

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

Mr Harvey said he was at a loss to explain why higher consumer confidence in the wake of the federal election had not translated into improving sales, arguing real estate agents were doing well as housing prices raced ahead but discretionary retailers were missing out.

"Consumer confidence is higher," said Mr Harvey on Monday as his home-goods retailer revealed 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 selling houses and units at the moment."

The comments gel with those of other leading retailers who have also failed to detect a sustained lift in spending since the election.

Wesfarmers chief executive 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 Australian stores showed some improvement, with September-quarter sales up 1.2 per cent - the third consecutive quarter of sales growth for the 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.

"The government has come in and said they are going to do something to get rid of red tape, and my bet is they will do a little, but nowhere near what's got to be done, not a within a bull's roar."

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

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