Industry commentators believe the 2013-14 federal budget, which will deliver an $18 billion deficit, has failed to benefit the retail industy in any considerable way.

They feel retailers will be affected by the Medicare levy increase, a lack of capital gains tax relief and reduction in red-tape, as well as the supperannuation hike. 

Australian Retailer Association (ARA)

Russell Zimmerman, executive director, ARA said  “the ARA is dissatisfied that the budget does not reduce the low value import tax threshold which would put local retailers on a level playing field with their overseas counterparts.

“The changes to the medical tax offset are another hit on consumers’ pockets, with no tax relief for consumers or business and only forecast increases in tax; the retail sector will struggle to maintain confidence.”

He said changes to the baby bonus will affect retailers as families will not have the funds to purchase new items for their children.  

“Retailers will feel the effects of the scrapped baby bonus, which will reduce from $5,000 to $2,000 for a first child and from $3,000 to $1,000 for a second child and will be means tested and those with an income over $112,000 will be ineligible to receive the bonus.

“The abolition of the baby bonus will hit young families hip pockets just when they hit retail stores catering for their new children,” he said.

On the other hand, Zimerman believes the government’s $24 million investment in new infrastructure will benefit the industry.

“Any boost in infrastructure will see increased employment opportunities, and from a retailer’s standpoint, hopefully result in increased retail sales.

“Retailers will also benefit from increased efficiency in transport and delivery the commitment to infrastructure will result in,” he added.

Australian National Retailers Association (ANRA)

Margy Osmond, CEO, ANRA said retailers were hoping to see the budget address the GST threshold issue, reports InsideRetail.

“Business will also be disappointed there are no real initiatives designed to address the red tape which will continue to put pressure on retailers.

“The retail sector is still some way from recovery. Consumers remain cautious, they choose to pay down debt and save rather than spend and discretionary spending is the last thing on their to do list,” she said.

Accounting firm RSM Bird Cameron

Andrew Graham, national head of business solutions, RSM Bird Cameron said the budget will affect small businesses in the following ways:

• The increase in superannuation from nine percent to 9.25 percent from 1 July 2013
• Capping of the tax exemption for earnings on superannuation fund assets supporting income streams at $100,000 per person per year from 1 July 2014
• Phasing out of the medical expense tax offset
• An increased tax compliance program by the ATO targeting increased tax revenue with trust structures clearly in sight
• Increase in the Medicare levy to two percent to fund the Disability Care legislation.
• Capping of self-education expenses at $2,000 – this will make it more difficult for businesses to provide employees with education and training to improve their skill set

He believes the government should reduce taxes on small business in order to bring the budget back to surplus

“A constructive approach to shrinking the deficit must not only involve encouragement for small business to create jobs, which in turn boosts economic activity and tax revenue, but also some constraint on government spending.

“There is no better encouragement for job creation than a reduced tax burden on small business. Every budget provides the government an opportunity to take action in this area,” he said.