Australia's peak retail body, the Australian Retailers Association (ARA), has welcomed measures to address the country's cost-of-living crisis announced in today's 2024-25 Federal Budget.
With retail employing one in ten Australians, ARA CEO Paul Zahra said more needs to be done to support small business, fund employment pathways for retail and incentivise the transition to a circular economy.
"We welcome measures that provide cost-of-living relief and boost confidence during these challenging times, which will have a flow on impact on the retail," Mr Zahra said.
"However, whilst the cost-of-living measures, as well as the Stage Three Tax Cuts, will provide some relief, we recognise little will shift for Australian households until interest rates ease.
"Australians are desperate for financial relief, and so too are retailers. Business costs remain dangerously high without productivity improvements and discretionary spending is softening significantly in the wake of tightening household budgets."
The announcements of most interest to retailers in the Federal Budget include:
• Cost-of-living measures to relieve pressure on families and lower income households including Energy bill relief of $300, the extension of superannuation on Government-funded Parental Leave and boosting support for Australians facing acute and urgent cost-of-living pressures, through crisis support and emergency relief.
• Stage Three Tax Cuts, reducing the 19 per cent tax rate to 16 per cent, reducing the 32.5 per cent tax rate to 30 per cent and increasing income bracket thresholds.
• Continuation of $20,000 instant asset write-off for small businesses with turnover under $10 million plus a $325 rebate for energy relief for up to a million small businesses.
• Over $30 million in a suite of measures to support small businesses to be secure online while they adopt and harness digital opportunities.
• Investing $10.8 million to support the mental health and financial wellbeing of small business owners by extending the NewAccess for Small Business Owners program, which provides tailored, free, confidential mental health support to small business owners.
"As one of the most feminised sectors in the Australian economy, retailers will welcome the measures provided for women including the multi-million dollar support for victim-survivors of domestic violence, pay superannuation on government-funded paid parental leave and increased award wages for childcare workers to provide more capacity in the system for the benefit of Australian families," said Mr Zahra.
Mr Zahra said the budget missed crucial opportunities including the need to co-invest in large scale recycling infrastructure to meet Australia's circular economy targets within areas such as textile, food and plastics waste.
"Investment in recycling infrastructure is urgently needed - so the hard work of the industry and everyday Australians doesn't go to waste. For instance, compostable packaging is a fantastic initiative, but only if large-scale facilities are in place to process it and prevent it going to landfill.
In line with the retail sector's commitment to transition to low-economy of the future, the ARA welcomed the government's Future Made in Australia, helping to accelerate the transition to the net-zero economy.
Whilst a number of measures advocated for by the ARA to assist businesses were addressed, more could have been done to assist businesses, particularly small business.
"In our Pre-Budget submission, we encouraged the Government to expand the small business tax rate of 25% to include medium size businesses with revenue up to $100 million, from the current threshold of $50 million, and we're disappointed this wasn't adopted," Mr Zahra added.
"Doing so would have injected much-needed cash flow, enabling retailers to innovate and grow.
Whilst we've seen very modest relief in energy costs, this barely scrapes the surface of the challenges retailers are facing. As it stands, escalating costs in supply chains, leasing, banking and labour are forcing overheads to trickle down to customers.
"Also in our Pre-budget Submission, we called for continued investment in vocational training options for the retail sector and we were disappointed that previous decisions to reduce investment in training for some front-line retail roles were not reversed tonight.
"It's understandable in a cost-of-living crunch, that the focus has been on helping everyday Australians. However, it's important not to overlook the needs of business and small business in particular. Retail employs many Australians and without a strong retail economy it is unlikely that we will see an economic recovery," said Mr Zahra.
