ARA CEO reveals retailers’ wishlist for May budget

Our economy continues to be battered by the collision of the cost of living crunch impacting consumer spending and the cost of doing business impacting businesses.

This year’s federal budget has the potential to steer us away from the riptide.

Many households remain under enormous pressure, with millions of families across the country grappling with demanding mortgage repayments and the high cost of living.

Likewise, after years of intense challenges, many small businesses are scraping the bottom of the barrel of economic viability.

There are continued supply chain challenges and labour shortages, retail crime impacts, wages continue to increase, and interest rates are all having an impact – with a lag effect stretching far and beyond.

Recent ASIC findings paint a daunting picture. Small businesses are facing a disproportionate rate of insolvencies.

More than three-quarters (82%) of insolvent companies in the last 12 months had fewer than 20 employees. Meanwhile, 83% of the insolvent companies had assets totalling $100,000 or less.

The government’s financial blueprint for the next year is crucial for charting the course towards a stable and prosperous market environment.

With over 1.4 million Australians employed in retail, our sector is not just a vital component of the economy; it is a vibrant ecosystem that touches every community across the nation.

Maintaining a healthy retail sector helps us create a healthy economy.

The federal budget in May is a time of relentless advocacy. Industry bodies from all corners of the nation will head to Canberra, policy wishlists in tow.

As the largest private sector employer in the country, retail must remain a prime focus for governments.

What retailers want from the federal budget

The Australian Retailers Association has delivered a pre-budget submission ahead of May – with a future-orientated focus.

Our first call is for the government to tackle inflationary pressures head-on.

By addressing the escalating costs in labour, supply chain, leasing, energy, and banking, we can prevent rapidly rising business overheads from trickling down to consumers, keeping retail accessible and affordable.

In addition, expanding the small business tax rate to include businesses with revenue up to $100 million will inject much-needed cash flow, enabling retailers to innovate and grow.

Small business is the lifeblood of the economy, and its success has flow-on effects for the rest of the economy.

Our workforce is our greatest asset. Maintaining the Work Bonus for pensioners and extending the Skills Checkpoint program are vital steps to harness the potential of our most seasoned workers.

Moreover, creating employment pathways for refugees and standardising the minimum working age can resolve labour shortages and enrich our sector with diverse perspectives and skills.

Meanwhile, sustainability is not just an environmental imperative but a business one.

Establishing a national taskforce to tackle single-use plastics and incentivising recycling are critical measures – but the onus can’t be on retailers alone.

Investment in recycling infrastructure is urgently needed – so that the hard work of the industry and everyday Australians doesn’t go to waste. For instance, compostable packaging is a fantastic initiative, but only if large-scale facilities are in place to process it and prevent it from going to landfill.

The rising tide of retail crime and violence also demands immediate action.

We would like to see the government commit funding to deliver retail-industry-specific programs and campaigns to address retail crime, customer aggression, and violence against retail workers.

Measures to counteract these threats are essential for the safety of retail workers and customers alike.

Boosting supply chain resilience through strategic infrastructure investments and appointing a National Supply Chain Commissioner will ensure that our sector can withstand disruptions and continue to serve the Australian public effectively.

Developing a Retail Disaster Response and Recovery Framework is also crucial in preparing for unforeseen events, ensuring continuity and support for communities in times of crisis.

Small businesses should be equipped to compete in the digital age, necessitating targeted support to enhance their digital capabilities and cybersecurity defences.

As we look to the federal budget, these initiatives represent more than fiscal measures; they are investments in our efficiency and resilience as an industry. 

Together, they form a blueprint for a sector that is robust, dynamic, and sustainable, capable of weathering economic storms and thriving in a rapidly evolving global landscape.

With the right tweaks, the government can provide relief that allows the Australian retail industry, and the broader economy, to go from surviving to thriving.

Paul Zahra is the CEO of the Australian Retailers Association.