The Australian Retail Council (ARC) welcomes the Federal Government’s move to make the $20,000 instant asset write-off permanent, delivering important certainty for small businesses and responding to long-standing calls from retailers.
To support a return to economic growth, ARC said retailers urgently need to see promised structural reform to lift productivity and reduce the burden of red tape and regulatory fragmentation and measures which address spiralling business costs.
ARC CEO Chris Rodwell said making the instant asset write-off permanent is a sensible and practical reform.
ARC has repeatedly called for a permanent instant asset write-off as part of its broader productivity advocacy. For small retailers, this can support practical investments in equipment, technology, store improvements and security upgrades. Making the measure permanent gives businesses the certainty to invest when they need to, rather than waiting on another temporary extension.
Mr Rodwell said reports the Government is preparing a broader productivity package aimed at reducing regulatory costs is a positive signal, but the scale and speed of reform matters.
“Any move to reduce unnecessary regulatory burden is welcome, but Australia’s red tape problem demands bold and substantial reform,” he said. “Retailers are operating in one of the toughest business environments in years, with weak consumer confidence, rising operating costs, growing compliance obligations and continued uncertainty weighing on business investment. The growing presence of ultra-cheap offshore platforms, operating on a unlevel playing field, is also a major threat to Australian retailers.”
“Our $444 billion retail sector represents almost one fifth of GDP and employs one in ten Australians. When retail thrives, there is enormous benefit to the broader economy – but we need to get the settings right to allow that to occur. In the lead-up to the election, the Treasurer said lifting Australia’s productivity would be a priority. Tonight’s Budget is the opportunity to show what that commitment looks like.”
ARC is calling for an ambitious productivity agenda, including a meaningful reduction in regulatory burden, with a target to cut red tape by 25 per cent, alongside practical reform to reduce the cost of inconsistent rules across states and territories. ARC-Mandala research found regulatory fragmentation alone is projected to cost the Australian economy $26 billion over the next decade, while adding $9.4 billion in cumulative costs for Australian households.
“Businesses are spending too much time and money dealing with duplicated compliance obligations, conflicting state-based rules and unnecessary complexity instead of investing in growth, jobs and lower prices for consumers,” Mr Rodwell said. “This is a productivity drag, a competitiveness drag, and ultimately a cost borne by Australian households.
“More productivity, less fragmentation of rules and stronger private investment are how you build a more competitive economy and keep prices lower for consumers.”