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Budget 2024: Retail Wins and Losses

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By Published On: May 16, 20240 Comments

The retail industry reacts to wins and missed opportunities from the announcement of the 2024-2025 Federal Budget.

Tuesday’s federal budget announcement brought some relief to retailers, with priority in supporting Australians through cost of living pressures. 

With one-in-ten Australians working in the retail sector, advocacy groups for retailers say the government missed the opportunity to offer more financial support and relief to struggling businesses.

“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,” said Australian Retailers Association (ARA) CEO Paul Zahra.

“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,” he said. 

“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.” 

Retail Wins

Among the many cost of living measures announced to relieve pressure on families and lower income households, the budget includes a $325 energy bill rebate for businesses on smaller electricity plans, as well as extending the $20,000 instant asset write off scheme for small business retail with turnover under $10 million.

More broad measures taken to address cost of living includes the household energy bill relief of $300, the extension of superannuation on Government-funded Parental Leave and boosting crisis support and emergency relief, plus a boost to Rent Assistance. 

Over $30 million has been allocated to support small businesses to be secure online while they adopt and harness digital opportunities, addressing ongoing cybersecurity concerns in retail. 

A big win for mental health support, the government announced it would be investing $10.8 million to support the mental health and financial wellbeing of small business owners by extending the NewAccess for Small Business Owners program, which provides tailored, free, confidential mental health support to small business owners. 

Local and sustainably focused businesses are set to benefit from the recently announced Future Made in Australia program, set to support and grow Australian manufacturing. Sustainable businesses will benefit from the $6.7 billion planned over the next decade on a Hydrogen Production Tax Incentive to reward local hydrogen and renewable schemes.

Missed Opportunities

The Council of Small Business Organisations Australia (COSBOA) expressed their disappointment that further relief and encouragement for small retailers was not front and centre in the Federal Budget 2024.

“COSBOA was hoping to see a Budget that provided a vision for productive and prosperous small business,” wrote the organisation. “An operating environment that would see small business protected and incentivised to invest, to employ more people, to adopt modern techniques so that the small business sector continues to grow, compete and contribute to the success of the Australian economy.” 

The ARA’s pre-budget calls for investment in vocational training were left unanswered, and much needed large scale recycling infrastructure was also not addressed.

“Investment in recycling infrastructure is urgently needed – so the hard work of the industry and everyday Australians doesn’t go to waste,” commented Zahra. “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. 

“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,” Mr Zahra added. 

“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.”

Economists echo the sentiment, arguing that consumer confidence should be a priority. Anneke Thompson, Chief Economist, CreditorWatch commented that, “what businesses really need, especially the struggling food and beverage and construction sectors, is more confident consumers, as well home borrowers who can afford to engage builders to build houses.

“Unfortunately, this is unlikely to occur until the RBA begins to reduce the cash rate. Energy relief payments in the pockets of consumers, even in conjunction with already locked in tax cuts from July 2024, are unlikely to convince shoppers to go out and spend again. Inflation is still too far out of the target band, and the last thing the RBA wants is for goods inflation to take off again.”

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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