The Executive Director of the Australian Retailers’ Association, Russell Zimmerman, said the 2019 Budget delivered by Treasurer Josh Frydenberg provides a welcome fillip for a retail sector operating in challenging conditions marked by stagnant wages, high energy costs, and soft consumer confidence.
In welcoming measures that will, directly and indirectly, benefit retail businesses, Mr Zimmerman said the budget would “go some way” to making up for the flat growth in wages that has characterised debate among economic commentators over the past couple of years.
The government’s move to raise the tax offset for PAYG taxpayers, putting up to $1,080 in the pockets of singles and up to $2,160 for dual-income families – increasing actual purchasing power – means Australians can spend with confidence, delivering a boost to local businesses,” Mr Zimmerman said.
“Given taxpayers will have this cash as soon as July if their tax returns are complete, this represents a substantial and almost immediate boost to retail spending across the economy,” Mr Zimmerman added.
The announcement that instant write-off provisions would be increased from $25,000 per purchase to $30,000, and expanded to cover every asset acquisition by businesses turning over up to $50m per annum, would further assist retail enterprises at a time of difficult trading conditions.
“In a rapidly evolving environment compounded by challenges from online overseas retailers, high energy prices and uncertain economic conditions, this will help Australian retailers modernise and update to ensure they are well equipped to compete and grow,” Mr Zimmerman said.
Mr Zimmerman said that the $525m allocated to skills development – including funding for 80,000 new apprenticeships, with incentive payments of $8,000 for employers per placement and a further $2,000 for apprentices – would help address the retail sector’s training and development needs.
“Whilst the ARA would like to see more detail of the ’10 new training hubs’ announced by the Treasurer, and how they might work as far as our industry is concerned, we welcome both the commitment to apprenticeships, which Retail embraces, and the $62m earmarked for literacy, numeracy and digital skills development: all of which are critical to our members’ businesses,” Mr Zimmerman said.
Mr Zimmerman welcomed the Treasurer’s announcement that the 32.5% tax bracket would be cut to 30% by 2024 for 94% of taxpayers, saying this would help ensure consumer spending could be maintained in real terms over the four-year budget projection period.
The ARA was also encouraged by the projection of surplus budgets over the budget period, which Mr Zimmerman said would provide a cushion that could assist all sections of the economy, including retail if economic conditions deteriorated.
“Whilst we’d like to see more detail in some areas, the ARA believes this is a positive budget for retailing in Australia that will help its members and deliver some much-needed relief in terms of their trading conditions,” Mr Zimmerman concluded.