Sunday, May 26, 2024

Budget to kickstart retail

Measures announced by the Treasurer this week will give a much-needed boost to retail, in particular small business, say industry groups.

National Retail Association CEO Dominique Lamb says several measures in the federal budget will assist small business and enable consumers to spend more at a time when retail is experiencing a slow period.

“The NRA welcomes the government’s announcement to cut personal income tax for those earning below $87,000 a year,” she said.

“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.”

The NRA also welcomed 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’re certain that it will continue to be beneficial to retailers,” Ms Lamb said.

The Australian Retailers Association welcomed the government’s commitment and investment into the Black Economy Taskforce and implementation of the Illicit Tobacco Taskforce to combat the illicit-tobacco market.

“Funding is a great first step to tackling the black market as the rise in illicit-tobacco consumption has severely affected local retailers and their bottom line,” ARA Executive Director Russell Zimmerman said.

The ARA also welcomed the government’s $75 billion infrastructure investment in 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.

Broader industry to benefit

The Australian Food & Grocery Council says the 2018 budget rightly puts the focus on jobs and skills and highlights the importance of setting sound economic fundamentals by returning the budget to surplus earlier than anticipated.

“The government is taking action to achieving a surplus of $2.2 billion in 2020/21, reducing the uncertainty for business which undermines the confidence and investment essential to underpin jobs and growth,” AFGC CEO Tanya Barden said.

“The tax cuts for low- to middle-income earners should also support retail spending, which should have flow-on benefits up the FMCG supply chain.”

Ms Barden also welcomed plans to boost infrastructure planning and delivery, noting that such measures are essential for developing supply-chain solutions that create “world-leading, efficient channels to market”.

“The government’s announcement of $225 million to improve the accuracy of GPS in Australia may greatly assist and improve high-performance-vehicle road mapping, about which several AFGC members have raised concerns,” she said. “It has been difficult to get accurate maps that show the smaller local roads and this led to some uncertainty about what vehicles are allowed in the ‘last mile’ to a delivery.”

While the AFGC noted the budget would provide some benefits to the manufacturing industry, it also expressed disappointment that it “does little to help mitigate high energy prices or stimulate investment in food and grocery manufacturing”.

“Continuing to stimulate investment in manufacturing-site modernisation is critical, particularly in light of mounting input-cost pressures,” Ms Barden said. “We are now in danger of drifting into a low-investment trap, where uncertainty about return on investment flowing from retail-price deflation and rising costs are seeing investment decisions deferred or dumped.”

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