Tuesday, May 21, 2024

Victorian Budget a ‘mixed bag’

The Australian Retailers Association (ARA) has welcomed measures to support families and small businesses in the Victorian Budget. It has, however, warned that mounting taxes and levies on large retailers may have an economic ripple that impacts all Australians.

With this said, ARA CEO Paul Zahra describes the Budget as a “mixed bag” for retailers economically.

“The consumer spending slowdown, coupled with increased costs of doing business, is pushing many retailers to crisis point. We welcome the measures that will alleviate costs and provide some cost-of-living relief,” he says.

“However, unfortunately several of the changes announced in this year’s budget will only exacerbate the challenges for retailers.”

Mr Zahra says he’s pleased the government will retain the increase to payroll the tax-free threshold to $900,000 for small businesses.

“This is especially valuable for new small businesses, to have a wider net of tax relief while they’re first getting off the ground,” he says.

“We’re also pleased to see business insurance duty will be phased out over the next decade, reducing costs by more than $500 million in the first four years.

“While the replacement of commercial stamp duty will save retailers in the short term, unfortunately over the long term it will prove much more costly.

“In addition, the Covid Debt Repayment Plan and phasing out of the tax-free threshold for larger businesses will put a significant handbrake on growth and could potentially result in increased prices or reduced staff.”

Mr Zahra says the Sick Pay Guarantee, while “somewhat confusing” in its structure, was a welcome initiative for workers who were unwell during the pandemic.

“Moving forward, it makes sense to retire the Sick Pay Guarantee program considering casuals already receive a loading paid by employers to cover sick leave and holiday pay,” he says.

Mr Zahra says the Budget, ultimately, could have delivered “far more” to address current economic challenges.

“It’s disappointing that the Budget has done little to relieve the cost of doing business crunch and improve consumer confidence – this is something the retail industry was desperate to see,” he says.

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