The budget was a turning point for business and consumer confidence, as we build towards a recovery for the retail sector.
The 2020-21 Federal budget is a turning point for business and consumer confidence, as we build towards a recovery for the retail sector. We know there cannot be an economic recovery, without a retail recovery and that’s why we are encouraged by many of the initiatives in this year’s package.
The ARA has been calling for a focus on stimulus measures that encourage consumer spending and policy measures which cut red tape, to allow businesses to operate more effectively and efficiently during this financially challenging time. We are pleased to see some gains announced in 2020-21 Commonwealth Budget across all of these areas – with some of the most significant wins for retailers outlined below.
Read about our response in the ARA media release
Treasurer, the Hon. Josh Frydenberg last night delivered the budget, which has been marked as the most important fiscal and economic statement delivered by a treasurer in more than 60 years.
Read his speech here.
Key wins for retail from the Federal Budget
- Personal income tax reductions brought forward and backdated to 1 July 2020 – which will help free up consumer spending power.
- Cash payments of $500 for those on welfare – whilst modest will help stimulate some level of retail spend.
- $105 million loss carry-back scheme – providing cash benefits to loss-making companies. This puts more money in the company pocket. As we have seen from the protracted Victorian lockdowns, many retailers have, through no fault of their own, found themselves in a loss-making situation with mounting debts. This measure allows businesses to bolster their cash reserves so they have an opportunity to rebuild in 2021 when trading conditions are more stable.
- Expansion of the Instant Asset Write Off – allowing businesses to write off the full value of any eligible asset they purchase for their business will free up cash and help stimulate expansion.
- Deregulation of credit policy to stimulate spending – which will help retail access to credit.
Protecting business owners:
- Reform in insolvency provisions – offering important protections for business owners.
- $1.2 billion wage subsidy for 100,000 new apprenticeships and traineeships with a 50 per cent wage subsidy for businesses who employ them – which will mean increased opportunities for young people and women to join the retail workforce and will also add more spending power to our economy.
- $4 billion JobMaker Hiring Credit- Back to work wage subsidy for young Australians – which will mean more financial security and stability for young people and provide more spending power.
Training and future proofing:
- $800 million Digital Business Plan – with training, advice and support for SME’s.
- $1.5 billion manufacturing investment – which will support growth in key areas including food and beverage.
- $240 million toward the Women’s Economic Security Statement – these programs will help encourage Job creation and entrepreneurship; and women’s safety at work and at home.
- FBT Exemption for skills training – which will support businesses to retrain their people with digital and online skills.
For the full package of key budget measures, please visit the official website here.