1st May, 2018

Federal Budget 2018: What the retail sector wants

Every year a cavalcade of peak bodies lobby the government to get their slice of the goodies handed out at Federal Budget time. Today is the retail sector’s turn.

The Australian Retailers Association (ARA) represents businesses that employ over 1.2 million people.

ARA Executive Director, Russell Zimmerman, told The Pulse that retail expects answers from the government on industrial law, tenancy law, trading hours and regulations. The sector has specific things it wants the government to look at in the budget process.

Personal tax cuts

Personal tax cuts are all-but locked in at this stage, and Zimmerman said retail wants the rumours to become concrete in the budget.

“The sector is screaming for tax cuts to boost disposable income.”

“Personal income tax cuts would benefit the retail sector. Consumers would have more income at their disposal to spend at retail stores,” he said.

“If more money is spent in the retail economy then retailers can employ staff for more hours. Also, that means more money flows into people’s pockets due to more work.”

“For over 10 years, incomes have been eroded due to individuals moving into higher tax brackets, reducing disposable income.”

READ: What happened in last year’s budget, and what could happen this year

Effects of infrastructure

Infrastructure can make or break retailers. More congested roads and rail has stock taking longer to reach the stores, and it costs more.

These costs get passed onto the retailer and the customer.

Zimmerman said while the government’s commitment to infrastructure spending had been “impressive” to this point, there were key projects that ARA would be looking at closely.

“We still have major works such as the Second Sydney Airport, Melbourne Airport rail link, Brisbane Cross River Rail and the Hobart/Launceston Derwent bridge replacement to be either announced, agreed to or fully get underway,” he said.

“All of these projects increase efficiency, tourism, freight and consumer access.”

Tenancy relations

Tenancy a hot topic in retail circles. Retailers accuse landlords of price gouging and failing to help an industry under pressure.

There are more measures for regulating housing rules between tenant and landlord. But this is not the case for commercial tenancies.

Zimmerman would like the government to use the Federal Budget as a springboard to look at more transparency in the relationship – using a mechanism like the Council of Australian Governments to do so.

“We need transparency over rental values as we have with housing costs. The current retail rental market is skewed, allowing landlords the right to view a retailer’s turnover and adjusting rental prices according to their turnover,” he said.

“This is like a residential landlord being able to know your income and increasing the rent based on your income.”

READ: More stories on retail

Red tape around trading hours

Zimmerman said retail could have less red tape across the board. He singled out inconsistent trading hours as something to change.

“Retailers in some instances are ‘forced’ to trade in regulated hours, as an example what is the use of a shop that must close at say 6pm when most of their trade occurs between say 3pm to say 8pm,” he said.

“Most people work ‘business hours’ and clothing and footwear stores may well want to trade after 6pm to get workers leaving work that have time to shop after ‘normal trading hours’.”

In last year’s budget the government put $300 million towards a National Partnership on Regulatory Reform. But these reforms haven’t advanced.

ARA and others want the government to recommit on that front, plus there’s a push to reduce red tape such as the new National Red Tape Reduction Coordinator.

Harmonise vocational training efforts

Zimmerman said retail was suffering from a lack of talent coming through vocational training. He pointed the finger at a haphazard approach to training at the state and federal level.

“ARA would like to see an agreement in place which funds each state for vocational training,” he said.

“This funding currently doesn’t [exist], and has not existed for some time which is why there has seen such a big drop off in vocational training.”

ARA sees this situation has led to more overqualified university graduates going into retail. Not students trained specifically in retail via the vocational system.

It’s called for VET funding to be boosted in the budget. ARA wants an apprenticeship taskforce to be set up, to improve the business case for employers offering apprenticeships and traineeship opportunities.

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