By Russell Zimmerman, Executive Director of Australian Retailers Association Last week the RBA cut interest rates by 50 basis points for May, which is a true acknowledgement the economy is in need of some stimulus. With the Federal Budget for 2012- 13 due to be announced today, retailers will be looking for some much needed and specific relief for themselves as business operators and consumers, who are stretched to the limit. March retail trade figures recently released by the ABS showed a slight boost (3.7 percent year on year), however spending on food and in cafes and restaurants was where the real growth was, with categories reliant on discretionary spend still showing weak growth and largely bearing the burden of household budgets stretched and trying to make ends meet. In light of the poor trading environment, retailers will be looking for some genuine relief by way of business tax cuts, spending cuts and a focus on enabling growth and innovation, which will ensure retailers are able to respond to consumer demand. In addition, the ARA will be calling on government to ensure any measures to maintain surplus will not be achieved through cost burdens on businesses or consumers. With retailers reliant on consumer confidence, consumers need the discretionary ability to know they will have more money in their pockets on an ongoing basis- many consumers will receive little in the way of carbon tax compensation and they are already feeling the pain through higher energy costs, the July removal of the health insurance rebate and for most Australians no real tax cuts on the horizon. The change in the Government’s long term monetary strategy from one of stimulation to thrift will allow the Reserve Bank to continue fiscal stimulation of the economy. Meanwhile, as the Government begins to pay back debt, there seems little room for a real shift to reduce taxes and allow consumers and business to grow the private economy. What we need is some real vision to stimulate growth through the private sector and boost economic growth by letting business get on with the job of doing business. A recent survey conducted by the ARA* showed 75 percent of retailers had serious concerns about their ability to hold onto current staff and 82 percent were concerned about keeping their business afloat. In a $240 billion industry responsible for one in 10 Australian jobs, this should be of serious and wider economic concern. Government would be doing itself a disservice if it was to try and achieve surplus by snatching money away from consumers or SME’s- the very people who stimulate economic growth. Good retailers are also trying to innovate in order to meet consumer demand and successfully compete in a modern retail environment. Therefore retailers, along with the entire business community will be looking for funding and education in order to achieve growth through new initiatives such as online and multichannel ways of conducting business. In fact, in ARA’s recent survey 77 percent of retailers cited keeping up with trends in ecommerce and online trade as a major business concern for 2012- 2013, which indicates the need for education and growth to be key focuses in the Federal Budget. The RBA’s move to decrease interest rates in May by 50 basis points shows there was a need to ease economic pressure on consumers. Government also must do its bit by considering the effect of the Carbon Tax and tax inefficiencies on business confidence over the next twelve months, as well as take measures to ensure retailers and consumers don’t have to bear this burden. The ARA is also calling on Government not to give with one hand and take with the other by introducing one tax break while levelling it out with increases charges through rebate changes and sneaky tax grabs. *ARA Minimum Wage Survey 2012- feedback sought on retailers’ major business concerns

 

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