The Australian Retailers Association (ARA) has branded new small business investment incentives announced in the 2011 Federal Budget as "recycled" initiatives.
ARA executive director Russell Zimmerman said retailers would feel 'ripped off' by the lacklustre incentives, which include a reduction in the company tax rate to 29 per cent for incorporated small businesses as well as the tax write-offs for assets under $5000.
“[This was] announced firstly as part of the Henry Tax Review and then again in last year’s budget announcement, [and] changes to quarterly PAYG installments will mean little for retailers who mostly lodge PAYG monthly,” he said.
“These small business incentives have now been recycled twice over – there’s not much that is new for retail in the 2011 Federal Budget announcement.”
Zimmerman said that while some incentives worked, more was needed to provide retailers with real relief from business costs and red tape, and to encourage investment in training and infrastructure.
“The immediate write-off of the first $5,000 on the purchase of any motor vehicle is good news for retailers but incentives for investment in other areas of business would have received a greater welcome. Moreover, businesses won’t be able to claim the write-off until the 2013/2014 financial year but retailers need some relief now,” he said.
“The changing market place is demanding Australian retailers deliver online shopping facilities, [but] there is nothing in this budget that gives incentive for retailers to invest in the training or the infrastructure they need to provide best practice online service to Australian customers.”
Zimmerman also hinted that phasing out the Dependent Spouse Tax Offset could lead to further deterioration in consumer sentiment.
“Spending cuts were necessary for a return to surplus but the phasing out the Dependent Spouse Tax Offset will take cash away from working families. This is more bad news for the retail sector with affected families expected to further reduce their spending.
“With retail figures released last week for March dropping 0.5 per cent, retailers are hoping spending cuts in the Budget are enough for the Reserve Bank to hold back on rate rises for the time being,” Zimmerman said.
The Australian Retailers Association (ARA) is Australia's peak retail industry organisation and an incorporated employer body under the Fair Work Act. The association provides a range of member services including business consulting, policy development, advocacy and education.