More incentives needed for retail growth: ARA

The Australian Retailers Association has criticised the Federal Government for failing to offer any incentive for small business employment growth in the first phase of the Henry tax review.

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,” he said.

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

“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.”

Zimmerman 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. 

GST-free threshold on hold

Meantime, the photo retailing sector will have to wait for next week’s federal budget to see what changes, if any, are made to the GST-free threshold for imported goods.

It’s unlikely the issue was part of the 138 recommendations contained in Treasury secretary Ken Henry’s report but industry groups, including PMA, have lobbied state and federal politicians to have the threshold lowered from the current figure of $1000.