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Budget 2008: Good, bad and ugly for Australian retailers - : welcomes promised tax cuts but predicts retail demand to fall

Peak retail industry body the Australian Retailers Association (ARA) believes there are many good things flowing from the Rudd Government’s first budget delivered tonight but that retail demand will continue to be ‘ugly’ and predicts bad news for the $292 billion sector.

ARA Executive Director Richard Evans congratulates the Rudd Government for delivering on its election promises and agrees that it shows a responsible approach by delivering a $21.7 billion surplus but with slowing growth and rising unemployment - the future is bleak for retail.

"This budget truly delivers the good, the bad and the ugly for Australian retailers," Evans said.

"By delivering on promises, Australians will benefit from tax cuts of $46.7 billion over four years which will hopefully flow back into a stalled retail consumer economy. The ARA also sees the Skilling Australia initiative as a positive with $1.9 billion being allocated to address skill shortages - hopefully with a strong focus on the services industry. Also, the announcement of a strong regional roll out of city strength broadband will assist remote and regional retailers stay connected to suppliers, customers and government. This is the good," Evans said.

"The bad? The ARA believes the projected growth of 2.75% is not anti-inflationary and hoped the government would aim for a higher growth target. In the current economic climate, we believe the Government should not strip demand but rather support and encourage Australia's retail sector which is already feeling the pinch of a tightening economy.

"We also see the newly announced Enterprise Connect Innovation Centres are a reinvention of what is already available to small businesses when what is really required is a thorough review of bureaucratic red-tape across the State and Territories," Evans said.

"In terms of the environment, we also saw the bad. We only saw commentary and funding for families and homes - nothing for businesses which by implication means they will carry the burden. With the environment being such an important global issue, we were disappointed not to see Government support for businesses working hard to reduce their carbon footprint.

"While the Budget delivers on the election promises from November 2007, the ARA sees the outlook for Australian retailers to remain ugly with predictions that demand will continue to fall," Evans said.

For over 104 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia's $292 billion retail sector which employs over 1.2 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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