The annual post-budget reporting doesn’t seem to change from year to year – the big winners and big losers, what’s in it for you, who thinks it’s magnificent, and who thinks it’s a load of garbage.
However, the Budget itself is always different from ones gone before it, including this one, which is the Government’s last before it heads to the polls, most likely to be in early 2019.
So, what is in it for you, the nation’s retailers, who are the second-largest employer in Australia behind the healthcare sector?
Overall, while the budget was far from ambitions on long-term budget repair (to be expected when an election is looming!), there have been some terrific measures outlined that we expect to have a really positive flow-on effect for retailers.
Proposed tax cuts for low and middle-income earners
Who thinks giving Australians earning less than $90k a year a tax cut is a bad idea?
Pretty much everyone wants to see Australians with more cash in their pockets to spend and for retailers, this translates to items like groceries, clothing or personal accessories.
With the ABS recently releasing disappointing retail figures for March, providing consumers with more spending power couldn’t be more timely, and with the Opposition already voicing its support, expect to see benefits from July 1.
The instant asset tax write off extended for another year
I’ve said it before and will say it again – any measure that allows small businesses to claim an immediate tax deduction for asset purchases of up to $20,000 (introduced in 2015), makes buying essential new equipment more easy and cost-effective for many of our members.
According to the Treasury’s data, in its first two years more than 150,000 small businesses have taken advantage of this tax offset.
It’s clearly working, and we’re already calling for next year’s budget – regardless of who’s in power by then – makes it permanent.
$24.5 billion worth of Infrastructure commitments (not as exciting as tax cuts and write-offs)
Talking about roads and infrastructure is about as interesting as watching paint dry, but with the nation’s population growing and our cities becoming more congested, it’s not just about the economic stimulus.
This kind of spending is crucial for retailers who are at the mercy of the nation’s transport infrastructure when it comes to receiving goods from suppliers, and sending goods to consumers.
Time, efficiency and affordability of freight is our lifeblood, so we simply cannot afford to support governments (at local, state and federal levels) who don’t allocate funding.
However, despite these and other positive announcements in the budget, it is no time for the retail sector to be complacent. The ABS March retail trade figures, released the same day, were underwhelming at best, with a recorded turnover of zero per cent (seasonally adjusted).
Half the states and territories recorded a decline in turnover – all this despite Australia currently having record low interest rates.
We don’t need official figures to tell us things are tough, and we know that more needs to be done to support retailers of all sizes.
Part of our current advocacy work to kick-start the retail sector includes:
- Pushing to extend the company tax cuts to all businesses, regardless of turnover, which would increase employment opportunities for retail workers. The NRA’s larger retail members provide many of the entry-level employment opportunities, and we would expect a quick upscale in employment if the company tax cuts before the senate were to be legislated.
- Calling on the Fair Work Commission (FWC) to set a minimum wage that strikes the right balance between fairness and affordability. Contrary to what the ACTU seem to think, none of you are a charity who can afford to keep paying a higher minimum wage and not have it impact on your business operations.
- Ramping up our fight for all state governments to get rid of antiquated legislation, and allowing you to open when your customers want you to open, rather than when governments tell you your customers should be shopping.
We are optimistic, we welcome the supportive measures outlined in the budget, and we are looking forward to continuing our work with the federal and state governments over the coming months.
Have a great week.
Dominique Lamb, CEO.