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Victorian Budget focus on skills and CBD revitalisation

MEDIA RELEASE 20.05.2021

The Australian Retailers Association (ARA) has welcomed the Victorian Government’s commitment to skills and CBD revitalisation in the 2021-22 State Budget and highlighted the importance of recognising retail as a key industry sector which can benefit from the skills funding.

The ARA also questioned the unintended consequences of extra levies on business and land tax increases during a critical time in Australia’s economic recovery.

Investment in skills

“Addressing skills training and skills shortages is vital to our business recovery within retail. As a registered training organisation, the ARA welcomes the Victorian Government’s commitment to skills, which includes $86 million to establish the Victorian Skills Authority, providing students with improved training options and clearer pathways to jobs,” ARA CEO Paul Zahra said.

“Retail employs one in ten Australians, however, has been missing as a key industry of focus within many of the skills and training schemes over the past year. We look forward to working with the Victorian Government on how this funding may be applied to retail to address the critical skills shortage the industry is experiencing. As Australia’s largest private sector employer, retail plays an important role in the employment and skills rebound.

CBD revitalisation

“CBD’s play a critical role in economic outcomes for all states and the Melbourne CBD is not the thriving hub it once was, with office occupancy rates still low and a lack of international tourists and students continuing to significantly affect small businesses in particular,” Mr Zahra said.

“We applaud the efforts of the State Government and the City of Melbourne to help and the $107 million investment to revitalise the Melbourne CBD, which includes support for more outdoor dining, will help attract more people back to the city and benefit those retailers who are continuing to do it tough.”

Taxes

“The increase to the payroll tax-free threshold will provide some important relief for small businesses who are feeling the effects of the uneven Covid recovery,” Mr Zahra said.

“However, with new a new levy being introduced to businesses with national wages above $10 million, to be applied as a payroll tax surcharge, we question the net outcome on business.

“Land taxes will increase for commercial property owners and that may have flow on effects for retail tenants through higher rents. At a time when many smaller retailers are confronting deferred rental debt, particularly within CBDs and the travel retail space, the impact of this could be problematic for struggling businesses.”

Mental health

“Mental health has never been more important after the challenges for many businesses over the past twelve months and we welcome this as an ongoing area of focus for this year’s Budget, with an overall investment of $3.8 billion over the next four years. This includes a greater focus on early intervention and outcome driven support,” Mr Zahra said.

“The ARA looks forward to close consultation with Government to deliver an outcome that will benefit those who require the services provided through these budget measures.

“Whilst this investment is welcomed, we are concerned about the unintended consequences of the way it is being funded as a payroll tax surcharge on business during this critical time, which could undermine the overall impact of this budget on the State’s economic recovery.”

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