Thursday, April 18, 2024

Government budgets for economic recovery

The 2021 federal budget aims to maintain the momentum of Australia’s economic recovery. The plans are a step in the right direction, according to industry bodies, with retailers, manufacturers and small business to benefit from key measures.

Tax measures to boost spending

Tax cuts for low- and middle-income earners will help ensure there’s more money in people’s pockets to support retail spending and create more jobs.

The National Retail Association (NRA) CEO Dominique Lamb says measures aimed at boosting customer spending and encouraging business investment are welcome additions.

“Everyday Australians will now have more disposable income to spend at the shops, providing an adrenaline boost to retailers’ bottom lines,” she says.

Additionally, a 12-month extension to the temporary full expensing measures until 30 June 2023 and a 1-year extension of the temporary loss carry back will allow businesses to invest in their future.

“Local cafes, family-owned restaurants and small clothing shops to name just a few will now be able to make investments in their business that would otherwise be unaffordable,” Ms Lamb says.

Simplifying industrial relations

The federal government will spend $134 million over four years on its deregulation agenda, including investing in regulatory technology to support smaller employers comply with modern awards, provide data on pay and conditions and help with accuracy in payroll software.

The NRA applauded the government for recognising the complexity of the system and taking steps to improve compliance.

Most people outside the sector think we’re exaggerating when we say that since 2013 retailers have had to deal with nearly 14,000 different rates of pay depending on variables such as whether the employee is casual or permanent, their age, their classification and the times at which the work is performed,” Ms Lamb says.

“This number easily doubles if you consider shift workers, baking production employees, apprentices and those working under the supported wage system.”

Women a key focus

Women are the backbone of the retail workforce, representing 68% of sales assistants and 75% of checkout operators. Australian Retailers Association CEO Paul Zahra says there is a clear focus on women as part of this year’s budget with additional funding for women’s health and domestic violence programs.

“The $1.7 billion child care package is also significant,” he says.

“This will provide more choice for working mothers and also puts more cash into the family budget each week, which are good outcomes for Australian families, the retail sector and the broader economy.”

The federal government will also remove the current $450 per month minimum income threshold, under which employees do not have to be paid the superannuation guarantee by their employer. This measure aims to improve equity in the superannuation system by expanding the superannuation guarantee coverage for cohorts with lower incomes.

“This will provide a much-needed boost for people’s super accounts – in particular women, who traditionally have less retirement savings than men,” Mr Zahra says.

“The Retirement Income Review estimated that around 300,000 individuals would receive additional superannuation guarantee payments each month, 63% of whom are women.”

Digital economy

The federal government allocated $1.2 billion to the Digital Economy Strategy, an important step towards boosting productivity and securing future prosperity. The investment will also support jobs growth as future skills in retail become more technology and science based, says Mr Zahra.

“Consumers are now expecting retailers to ‘meet them where they are’, through consistent, seamless omni-channel interactions – and that involves businesses having a clear and dedicated focus on digital.”

He says the migration to online that was boosted by people working from home during the pandemic is a permanent one.

“It’s part of an acceleration of trends we’ve seen over the past 12 months, and that will continue to evolve in the years and decades to come,” he says.

“It’s important that businesses, particularly small business, have the skills and knowledge they need to keep up with the rapid rate of innovation and new and emerging consumer trends.”

Skills focus to benefit manufacturing

The Australian Food and Grocery Council (AFGC) welcomed the government’s focus on creating jobs and supporting skills development.

AFGC CEO Tanya Barden says policies that support investment in new skills and capital equipment have the potential to bring about a structural reinvigoration of the Australian food and grocery manufacturing. This would also position it to be a powerhouse for innovation, employment and export growth.

“I am pleased to see a budget that backs business growth with an extension of the temporary full expensing (instant asset write-off) for a year,” she says.

“However, we ask that the government continues to look at expanding this further so that businesses with long-held assets in Australia can access this incentive.”

Ms Barden also welcomed the Digital Economy Strategy, which focuses on the skills for the future including artificial intelligence (AI).

“Skills such as robotics, virtual reality, 3D printing, AI and predictive analytics are all advanced skills that we need to match our growing capabilities,” she says.

“Other measures including extension of the JobTrainer program and boosting apprenticeships will also support the skills growth that our industry needs to continue to grow, innovate and reach into new export markets,” Ms Barden says.

Paving the way for small business

The budget includes several new, extended and enhanced measures to support small businesses.

The Australian Small Business and Family Enterprise Ombudsman Bruce Billson says the measures are a clear acknowledgement that small and family businesses are central to the nation’s economic recovery and future prosperity.

“The budget represents a substantial financial and strategic commitment to making Australia the best place to start, grow and transform a business,” Mr Billson says.

“These measures will support small and family businesses as they help lead our national economic recovery and play a critical role in securing our future prosperity.”

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