The newly released Federal Budget brought relief for some retailers last night, with a familiar focus on ‘jobs and growth’ marking the Coalition Government’s public strategy.
However, with the ongoing strategy to achieve reduced Government debt, retailers face increased taxes on their businesses and as individuals.
Australian Retailers Association (ARA) executive director Russell Zimmerman said the retail industry welcomed some of the budget measures.
“A tax, is a tax, is a tax, however you dress it up,” he said.
The ARA maintained that a levy on Australia’s five biggest banks, as well as stricter regulation, will reduce Australian debt and hopefully stimulate a return to surplus.
“Our concern with this strategy is that the costs will be passed on by the banks to everyday Australians and small businesses,” Mr Zimmerman said.
“Without adequate safeguards to protect customers from these forwarded costs, we are cautious that this levy could prove counter-productive for retail growth.”
Stakeholders in the FMCG sector will be among those subjected to the Skilling Australians Fund levy, which will charge businesses for employing foreign workers on certain skilled visas. It was identified that businesses turning over less than $10 million per year will have to pay a $1,200 up front visa fee each year for employees on Temporary Skill Shortage visas, as well as a one-off payment of $3,000 for each employee sponsored under the permanent Employer Nomination Scheme.
The Australian Food and Grocery Council said the budget rightly put the focus on jobs and growth.
There has also been an extension to the $20,000 instant asset tax write-off scheme. Businesses with an annual turn over of up to $10 million can still benefit from the scheme, originally set to conclude at the end of 30 June 2017, for another 12 months.
Australasian Association of Convenience Stores (AACS) CEO Jeff Rogut said his main concern was the increased excise on tobacco products, and how that had driven customers to choose cheaper brands and roll your own (RYO) products.
“Tobacco accounts for 38% of a typical store sales and almost 25% of its margin… Government action through excise increases has encouraged the continued sales of illicit tobacco in the marketplace e.g. through unscrupulous retailers, in markets, pubs etc,” he said.
“According to the latest KPMG report also released last week, this accounts for 13.9% of the tobacco market and if sold legally, would generate $1.6 billion in excise revenue.
“By further taxing RYO as proposed in the budget, this will have an impact on sales, and possibly drive customers who choose to smoke but cannot afford the legal products to seek out more illicit products of unknown origin or importantly, quality.
“Government would be better [off] chasing sellers of illicit products at the retail level, than again hitting consumers of legal product.
Mr Rogut said that while Border Force had done a great job of taking some major seizures, little had been done to police products that make it past their net to be sold illegally to consumers of all ages.
“Very few, if any, large fines that are available have been issued to retailers and others selling illicit tobacco products,” he said.
“An unintended consequence of the government’s continued tax grab, no longer even in the name of health, has been to see a massive surge in robberies, committed on retailers such as ours, for cigarettes by criminal gangs as we have seen in Victoria.”
“This puts our people and customers at real risk of injury or worse.”