The Federal Government has handed down its Budget for 2026, with many of the new measures being welcomed by retailers.
The Australian Retail Council (ARC) pointed to practical wins, including the permanent instant asset write-off, red tape reduction commitments and action to address unfair competition from ultra-cheap offshore platforms like Shein and Temu.
But the peak body continues to highlight the tough climate we are in.
ARC chief economist and chief policy officer Glenn Fahey said Australia faces a challenging economic and fiscal environment.
“It’s clear Australia’s budget and debt position will remain under pressure for some time, which makes the task of bringing inflation under control more challenging and creates ongoing pressure for businesses and households,” Fahey said.
“Retailers continue to face intense pressure from a weak consumer outlook, rising operating costs and persistent uncertainty, most recently from the supply chain impacts of the Middle East conflict. Consumer confidence has slipped to record lows, below even the weakest readings seen during the recession of the early 1990s.”
Australia also continues to grapple with low productivity growth, which the ARC calls one of the most significant long-term challenges facing the economy, despite the Government’s efforts introduced in the budget.
The Budget includes new product safety rules for ultra-cheap offshore platforms like Temu and Shein, temporary tax loss carry-back provisions to improve business cash flow, a $20,000 permanent instant asset write-off for eligible businesses, and investment aimed at strengthening Australia’s fuel and energy resilience.
Fahey said measures that ease the payroll tax administrative burden are welcome, and the Government has committed to further red tape reduction measures, including harmonising state retail tenancy frameworks, waste and recycling and expanding heavy vehicle reforms.
“It’s clear there are steps in the right direction, but there is a long way to go to meaningfully improve competitiveness, reduce business costs and lift productivity,” he said. “It is critical that the Government elaborates on its plan for incentivising states and territories to seize the moment for national harmonisation.”
ARC has consistently called for action to address the unfair advantage enjoyed by ultra-cheap offshore platforms.
Fahey said the introduction of product safety obligations for digital platforms is a good place to start, and praised the other measures too.
“The temporary tax loss carry-back provisions will provide practical support for businesses navigating difficult trading conditions, while a permanent instant asset write-off gives retailers greater confidence to invest in equipment, technology and operational improvements that can lift productivity,” he said.
“Measures that strengthen business resilience are constructive, particularly at a time when many retailers are absorbing higher costs across freight, logistics, energy, wages, insurance and compliance.”
But Fahey said there remains a long road ahead to tackle the regulatory burden weighing on Australian businesses.
Citing research the ARC did with Mandala, he said the results there spotlighted inconsistent and fragmented regulation across Australia that is acting as a fragmentation tax on the economy.
“Australia has a productivity problem, and the Treasurer acknowledged that in the lead-up to the election,” Fahey said. “While this Budget contains some practical support measures and has signalled a more ambitious reform agenda.
Other measures of interest to retailers in the Budget 2026 include state and territory harmonisation on retail tenancy frameworks, waste and recycling, as well as $67.7 million in expanded funding to the Australian Competition and Consumer Commission.