The 2009-2010 Federal Budget was released yesterday and the Australian National Retailers Association is pleased with initiatives put forward, but is worried that rising unemployment levels may cancel out the boost for retailers.
ANRA CEO, Margy Osmond said, “In a climate of confused and dramatically altered consumer confidence, retailers needed to see initiatives to stimulate the flagging optimism of Australians”.
“This Budget delivers the promised tax cuts and an increase in pensions on the back of the earlier stimulus packages and this is a welcomed prospect for sustained additional spending.”
But despite the positive signs to come out of the Budget announcement Osmond commented that the forecast of 8.5 per cent unemployment will be playing on consumer’s minds and will affect their spending.
“This contraction could cancel out the boost provided by the Government’s second round of cash handouts prior to the Budget.”
“Retail is the first to feel the effects of rising unemployment, due to the fact that 40 per cent of household income is spent in the retail sector,” she said. “After June 2009, retailers face the possibility that, just as the benefits of the cash handouts peter out, demand will fall due to rising employment.”
But Osmond emphasised that the Federal Government made the right decision and should be commended, by delivering in full the promised tax cuts.
“Retail is the country’s largest employer; it employs 15 per cent of the country’s workforce. Over 14,000 new retail jobs have been created in the three months to February.”
But Osmond highlighted that this is nowhere near the employment levels seen in late 2007 when an extra 75,000 people were employed in the sector.
The ANRA also welcomed other Budget decisions like the Government funded paid maternity leave, $22 billion in infrastructure spending, extra training places, extension of first home owners grant and the increase in the singles and couples pension.