The Australian Retailers Association (ARA) CEO Paul Zahra has welcomed measures to address the country’s cost-of-living crisis in yesterday’s 2024-25 Federal Budget, but said more could have been tabled for retailers.
“We welcome measures that provide cost-of-living relief and boost confidence during these challenging times, which will have a flow on impact on the retail,” Zahra said. “However, whilst the cost-of-living measures, as well as the Stage Three Tax Cuts, will provide some relief, we recognise little will shift for Australian households until interest rates ease.
“Australians are desperate for financial relief, and so too are retailers. Business costs remain dangerously high without productivity improvements and discretionary spending is softening significantly in the wake of tightening household budgets.”
Of most interest to retailers are cost-of-living measures including energy relief of $300 for families and lower-income households, the extension of superannuation on Government-funded Parental Leave and boosting support for Australians facing acute and urgent cost-of-living pressures.
There are also the Stage Three Tax Cuts, reducing the 19 per cent tax rate to 16 per cent, reducing the 32.5 per cent tax rate to 30 per cent and increasing income bracket thresholds, and the continuation of $20,000 instant asset write-off for small businesses with turnover under $10 million, plus a $325 rebate for energy relief for up to a million small businesses.
The Budget also tabled over $30 million in a suite of measures to support small businesses to be secure online while they adopt and harness digital opportunities, as well as investing $10.8 million in mental health and financial wellbeing for small business owners.
But the budget missed crucial opportunities, according to Zahra, including the need to co-invest in large-scale recycling infrastructure to meet Australia’s circular economy targets within areas such as textile, food and plastics waste.
“Investment in recycling infrastructure is urgently needed – so the hard work of the industry and everyday Australians doesn’t go to waste,” Zahra said. “For instance, compostable packaging is a fantastic initiative, but only if large-scale facilities are in place to process it and prevent it going to landfill.”
Zahra added that more could have been done to assist businesses, particularly small businesses.
“In our Pre-Budget submission, we encouraged the Government to expand the small business tax rate of 25% to include medium size businesses with revenue up to $100 million, from the current threshold of $50 million, and we’re disappointed this wasn’t adopted,” Zahra said. “Doing so would have injected much-needed cash flow, enabling retailers to innovate and grow.
“Whilst we’ve seen very modest relief in energy costs, this barely scrapes the surface of the challenges retailers are facing. As it stands, escalating costs in supply chains, leasing, banking and labour are forcing overheads to trickle down to customers.
“Also in our Pre-budget Submission, we called for continued investment in vocational training options for the retail sector and we were disappointed that previous decisions to reduce investment in training for some front-line retail roles were not reversed tonight.
“It’s understandable in a cost-of-living crunch, that the focus has been on helping everyday Australians. However, it’s important not to overlook the needs of business and small business in particular. Retail employs many Australians and without a strong retail economy it is unlikely that we will see an economic recovery.”
Other key measures which were applauded by the ARA include the multi-million-dolalr support for victim-survivors of domestic violence, increased award wages for childcare workers, and the Government’s Future Made in Australia act.