As Australian retailers continue to struggle with low growth and rising costs, many in the industry looked to the 2018 Federal Budget to deliver on personal tax cuts to drive consumer spend.
The National Retail Association (NRA) CEO Dominique Lamb said several announcements contained in the budget will enable consumers to spend more at a time when retail is experiencing a slow period.
“The NRA welcomes measures announced by the Treasurer…that will give a much-needed boost to retail, in particular small business,” she said.
Lamb singled out the government’s decision to cut personal income tax for those earning below $87,000 per year.
“The more money that ordinary Australians have in their back pocket, the more money they have to spend on items ranging from groceries to personal accessories and clothing,” she said.
“Giving consumers more spending power will have a particularly positive flow-on effect for small businesses who are currently navigating a challenging period demonstrated in the disappointing retail figures released by the ABS.”
Russell Zimmerman, executive director of the Australian Retailers Association (ARA), said the inclusion of personal income tax cuts for low to middle income earners was positive, but said he believes the cuts should include all tax brackets. He also said the cuts are needed earlier and faster to drive consumer spending.
“With [the] March retail trade figures showing a 3.15 per cent trade growth year-on-year, retailers are still expecting the company tax rate to be lowered to sustain growth in the market and overall economy,” he said.
Zimmerman said the ARA also welcomed the government’s $75 billion infrastructure investment to metro and regional areas to increase efficiency, freight, tourism, and consumer access.
“Retailers are looking forward to major infrastructure projects such as the Melbourne airport rail link, Sydney’s rail freight corridor and Hobart’s new river crossing being implemented and completed as these long-awaited developments will increase consumer access and retail growth,” he said.
“Although we welcome the Treasurer’s predicted budget surplus and fall in net debt, the ARA calls on the government to develop a real plan to put Australia back on a track to zero debt and long-term lower taxes to ensure the longevity of Australian retail.”
Lamb said the NRA is also pleased with the decision to extend the instant asset write off that allows businesses with a turnover of up to $10 million a year to claim a tax deduction for equipment costing up to $20,000.
“This deduction has made investing in new equipment easier for mum-and-dad small business owners and we are certain that it will continue to be beneficial to retailers.”