Friday, July 19, 2024

Tax cuts a ‘kickstart’ for the economy, says ARA

The Executive Director of the Australian Retailers’ Association (ARA), Russell Zimmerman, has congratulated the Senate for passing the Morrison government’s $158 billion tax relief package.

According to Mr Zimmerman, this will “kickstart the economy”.

He says the combined effect of the cuts – which will hand an immediate $15 billion to consumers as Australians file their 2018-19 tax returns – and last week’s cut in official interest rates will deliver a boost to the economy.

“We’ve been saying for a while now that economic conditions are sluggish, and that retail businesses have been doing it particularly tough, so we certainly welcome the Senate’s passage of this package,” he said.

“Taken in tandem with the interest rate reduction announced by the Reserve Bank [last Tuesday], we think this is just what the doctor ordered, so to speak; these measures add up to a kickstart for the economy.”

Support from both parties ‘particularly pleasing’

Mr Zimmerman says that despite protracted media chatter about how the ALP would treat the tax package in the Senate, it was “particularly pleasing” to note that in the end both major parties had supported it in full.

“The ARA has been calling on both major parties to support this package since the election as an urgent measure to generate consumer confidence and stimulate retail expenditure, and we are delighted they have,” he said.

A ‘highly likely’ boost for struggling businesses

Mr Zimmerman says that with 10 million wage and salary earners set to receive $1,080 as soon as their tax returns are processed – with millions of additional taxpayers on lower incomes also set to receive instant relief – it was “highly likely” that this would now translate to a boost for struggling retail businesses.

“With the retail sector weathering a perfect storm in recent times – with high energy costs, online competition, higher wages and penalty rates, and a fall in consumer spending, this is welcome news,” Mr Zimmerman said.

He encourages people to spend their tax cuts buying clothes, or a new TV, or to head out for dinner, supporting local retail businesses given they will shortly have significantly more money in their pockets.

“I’d urge people to buy whatever it is for the house they’ve been putting off, or to go out and treat themselves: this package is just what the economy needed, and the benefits will be felt by all,” Mr Zimmerman said.

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