Wednesday’s Federal Budget brought some relief for retailers, however, the increase in taxes is going to put pressure on consumers’ spending according to the Australian Retailers Association (ARA).
Executive director, Russell Zimmerman, says although the retail industry welcomes some of the measures, he believes cuts to concurrent spending will be more beneficial than slugging consumers with a Medicare levy tax hike.
“A tax, is a tax, is a tax, however you dress it up,” he says. “The Medicare levy increase of 0.5 per cent to fund the NDIS is just a tax hike in another form that will hit consumer pockets hard.”
Zimmerman is also concerned about the levy on five of the biggest banks. While it will go a long way to reducing Australian debt, these costs are likely to be passed on by the banks to consumers and small businesses, he admits.
“Without adequate safeguards to protect customers from these forwarded costs, we are cautious that this levy could prove counter-productive for retail growth.”
This follows the release of mediocre March figures by the Australian Bureau of Statistics this week, with a retail trade growth of just 2.15 per cent year-on-year.
“The generally weak trade figures across the board appear to be caused by myriad of factors including low consumer confidence, political uncertainty, international competition and the effects of housing affordability on hip-pockets.
“These broader economic issues, combined with a number of challenges within the retail operating environment, are serving to stagnate rather than stimulate growth in the sector,” says Zimmerman.
The ARA notes the additional skills funding in the budget and urges the government to work directly with retailers to address specific skills shortages which affect the core operations of retail businesses.
“Retailers are looking to tax reforms, infrastructure investment and additional skills funding to stimulate the growth that the sector vitally needs.”
By Marion Gerritsen
