Tonight, we will know the details of the 2016 Federal Budget, as Treasurer Scott Morrison hands down his first budget.
Given the current mixed retail environment, we have been urging the Federal Government, in the lead up to the delivery of its third budget, to provide as much certainty and clarity as possible.
The Australian retail sector has experienced moderate but consistent growth over the last two and a half years. While this has been a welcome pattern – particularly in light of several years of poor or negative results prior to late 2013 – the retail sector is still short of performing at maximum capacity.
While the National Retail Association strongly commends the Federal Government on its positive action to close the GST loophole for overseas businesses, Australian retailers still face a growing threat from overseas competition. Local retailers also face input cost challenges in areas such as rent, wages and particularly penalty rates.
Australian retail businesses are acutely aware of the sense of uncertainty felt by many customers, who are uncertain about the future direction of interest rates and aware of growing fragility in the major economies of Europe and Asia. While on the home front, we’ve experienced a significant period of political instability, which we hope will settle following the federal election.
It is into this mixed environment – of moderate growth in the recent past but uncertainty in the near future – that the Federal Budget will be delivered. Although a GST rise is now off the table, other tax reform is still possible and there are other important issues relating to training, workplace relations and the tourist tax refund scheme that we believe need to be addressed in the interests of retailers.
While we will continue to strongly represent the retail sector on these issues, we urge governments to be clear and transparent about the details affecting the retail sector, so that retail businesses can continue to prosper and create jobs – which are the economic engine room of the economy.
While consumer confidence has suffered through a period of political and economic instability, we’re looking forward to renewed sense of confidence in the second half of the year.
Have a great week.
Ian Winterburn, CEO, Deputy Chairperson