Retailers short changed in tax review

Peak retail industry body the Australian Retailers Association (ARA) said the Federal Government’s response to the Review of Australia’s Future Tax System failed to offer any incentive for small business employment growth. 

ARA Executive Director Russell Zimmerman said retailers are the nation’s largest employer but the review of the tax system only provides disincentive for employers who are already facing increased wage bills under the five year roll out of the Modern Retail Award.

“Retailers’ calls for relief from payroll tax have gone unheard – an abolishment of payroll tax would have a direct and positive impact on retail staffing levels and product prices. Instead, retailers are being hit with increases to employment related expenses including a three percent rise in superannuation payments.

“Any small relief from the two percent reduction in company tax for small business will be offset by the three percent increase in employer superannuation contributions. This is a real and significant cost to small business owners making daily decisions about hiring and firing.

“A reduction in company tax to 25 percent may be a more realistic figure for small businesses to cope with the increase in superannuation payments.

“We also have concerns about the Review’s definition of small business.  Many small retailers would turnover more than $2 million – a more accurate small business threshold would be up to $5 million.

“That being said, the capital allowance concessions for small business to immediately write-off assets valued at under $5000 gives incentive for retailers to invest in business growth,” Zimmerman said. 

For over 105 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia’s $292 billion retail sector which employs over 1.5 million people. As an incorporated employer body under the Workplace Relations Act and with a range of member services including business consulting, policy development, advocacy and education, the ARA promotes and protects over 5000 independent and national retailers throughout Australia. Visit www.retail.org.au or call 1300 368 041.

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