The 2024-25 Federal Budget includes measures to address cost-of-living pressures, such as energy bill relief of $300 and an extension of superannuation on government-funded parental leave, but more needs to be done to support small business, according to peak retail body, the Australian Retailers Association (ARA).

“We welcome measures that provide cost-of-living relief and boost confidence during these challenging times, which will have a flow on impact on the retail,” ARA CEO, Paul Zahra said. 

“However, while the cost-of-living measures, as well as the stage three tax cuts, will provide some relief, we recognise little will shift for Australian households until interest rates ease. 

“Australians are desperate for financial relief, and so too are retailers. Business costs remain dangerously high without productivity improvements and discretionary spending is softening significantly in the wake of tightening household budgets.” 

While the ARA welcomed the government’s Future Made in Australia, helping to accelerate the transition to the net-zero economy, Zahra said the budget missed crucial opportunities including the need to co-invest in large scale recycling infrastructure to meet Australia’s circular economy targets within areas such as textile, food and plastics waste. 

“Investment in recycling infrastructure is urgently needed. For instance, compostable packaging is a fantastic initiative, but only if large-scale facilities are in place to process it and prevent it going to landfill,” he said.

While a number of measures advocated for by the ARA to assist businesses were addressed, more could have been done to assist businesses, particularly small business.  

“In our Pre-Budget submission, we encouraged the government to expand the small business tax rate of 25% to include medium size businesses with revenue up to $100 million, from the current threshold of $50 million, and we’re disappointed this wasn’t adopted. Doing so would have injected much-needed cash flow, enabling retailers to innovate and grow,” Zahra said. 

“While we’ve seen very modest relief in energy costs, this barely scrapes the surface of the challenges retailers are facing. As it stands, escalating costs in supply chains, leasing, banking and labour are forcing overheads to trickle down to customers. 

“Also in our Pre-budget Submission, we called for continued investment in vocational training options for the retail sector and we were disappointed that previous decisions to reduce investment in training for some frontline retail roles were not reversed.”

Other measures in the Federal Budget included:

  • Stage three tax cuts, reducing the 19% tax rate to 16%, reducing the 32.5% tax rate to 30% and increasing income bracket thresholds
  • Continuation of $20,000 instant asset write-off for small businesses with turnover under $10 million plus a $325 rebate for energy relief for up to one million small businesses
  • Over $30 million in a suite of measures to support small businesses be secure online while they adopt and harness digital opportunities
  • Investing $10.8 million to support the mental health and financial wellbeing of small business owners by extending the NewAccess for Small Business Owners program, which provides free and confidential mental health support to small business owners