By Patrick Avenell
The Federal Budget delivered overnight will result in more cash in consumers’ hands but not necessarily in retailers’ tills, according to RBS director – retail analyst, Daniel Broeren.
“Overall, the Federal Budget itself does not have significant implications for the consumer, however, when factoring in roll-off of the flood levy, and the Clean Energy Advance payment, consumers will have around $4.5 billion additional spending capacity in FY13,” Broeren said.
These windfalls are tempered, however, by the introduction of the Carbon Tax, and its currently unknown impact on consumers.
“The big unknown is the carbon tax, and the level of living cost increases to be pushed through to the consumer from 1 July 2012. Adding to this, an increase in unemployment to 5.5 per cent will adversely impact consumer sentiment.
“Overall, consumers will have more cash in FY13 — a positive for retailers — but rising unemployment and living costs will likely see a good proportion of it saved.”
Meanwhile, Australian Retailers Association president Roger Gillespie has labelled the much touted budget surplus a “false economy”, saying the Government is merely taking with one hand and giving back with the other.
“Retailers will benefit from inclusions such as small business being able to immediately deduct asset costs under $6,500 and the extension of the Small Business Advisory Service, which will ensure more retailers receive timely assistance,” Gillespie said.
“The ARA is disappointed retailers will suffer from the abandonment of an important promised tax cut from 30 per cent to 29 per cent and shows small-to-medium businesses aren’t sharing in the benefits of the mining boom.
“The ARA supports the announced tax loss carry back scheme but would like to have seen further initiatives to help retailers focus on growth.
“ARA is concerned the Government has given with one hand through initiatives for business and consumers but taken with the other with no compensation for the Carbon Tax or superannuation increases, which will hit retailer and consumer confidence once short term Budget benefits wear off.
“ARA supports, and calls on, cross-benchers to support a budget surplus. However, it’s a false economy to achieve surplus through pressure on vulnerable sections of the economy.”