BUDGET 09-10: Retailers offer mixed views on Budget

Federal Government is taking a hopeful view of Australia’s powers to recovery by offering a mixed-bag of initiatives

The Federal Government is taking a hopeful view of Australia’s powers to recovery by offering a mixed-bag of initiatives, according to the country’s leading retail associations.

The Australian National Retail Association (ANRA) says last night’s Budget takes a "dig-deep" approach, in hope that the recession ends soon.

ANRA Chief Executive Margy Osmond says retailers need to see initiatives to stimulate consumer confidence.

"This Budget delivers the promised tax cuts and an increase in pensions on the back of the earlier stimulus packages and this is a welcomed prospect for sustained additional spending," she says.

"However, some measures including belt tightening on family payments and changes to the private health insurance rebate will be a bitter pill for many families.

"Most importantly, the frightening forecast of 8.5 percent unemployment will still be playing on the minds of consumers and could lead to the slashing of retail sales by as much as $2.5 billion."

Osmond says a contraction in employment could cancel out the boost provided by the Government’s latest round of cash hand-outs.

"In such a situation, it was essential that the Government deliver in full the promised tax cuts and the Government should be commended for sticking with this promise in difficult times," she says.

While the ANRA was reasonably pleased with the Government’s decisions, the Australian Retailers Association (ARA) has varied views on the impact on jobs.

ARA Executive Director Richard Evans says while nation building is good for Australia and construction jobs, the Budget does not focus on saving jobs within the supply channel for the "here and now".

"Employment stability is the key to domestic economic recovery and the Rudd Government’s second budget does little to sure up job confidence for the average worker and nothing to provide incentive for small business to maintain current workforce levels," he says.

"Retail budgeting 101 states that if recurrent revenues decline then recurrent spending should also be reduced. We see little evidence of this in the Federal Budget with the Government failing to make the hard decisions to reign in their spending."

Evans says the Government is spending more than is being earned, and the Budget appears to be more about politics than the need to generate and maintain jobs.

"That being said, we do applaud the boost from 30 to 50 percent of the small business tax break and the extension to the end of December 2009," he says.

"This extra incentive for smaller business to purchase eligible assets will stimulate business investment spend if demand, and thus cash to actually pay for the investment, returns."

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