The Australian Retailers Association (ARA) and National Retail Association (NRA) said the Federal Government's modest cost of living measures in today's federal budget, including delayed tax cuts, energy, health care, student debt relief and pensioner measures, may have a flow-on effect to consumer confidence.
However, the sector cautioned that the slow-down in spending coupled with rising business costs leaves retail businesses extremely vulnerable. The ARA and NRA said an absence of support for business and productivity growth is a significant missed opportunity in this Budget.
The measures of most interest to retailers in the 2025 Federal Budget are:
- Tax cuts – Minor tax relief reducing the first tax threshold from 1 July 2026 - providing $268 a year to the average worker from 2026 rising to $536 mid-2027.
- General Cost-of-Living Support – Increased funding for PBS scripts, more bulk billed GP visits, cutting student debt.
- Childcare relief – Guaranteed three days of subsidized childcare each week, with $1 billion going towards expanding quality and access.
- Energy Bill Relief - Extension of energy bill relief to the end of 2025 for households and small businesses, totalling $150.
- SMB digital capability – Continuation of digital / cyber security funding of $60m.
- Payments – Addressing unfair excessive card surcharges, preparing to ban debit card surcharges to deliver lower cost payments.
- Supply chain resilience: $17.1 billion over 10 years to improve freight efficiency through road and rail projects - this includes the Bruce Highway in QLD and Western Sydney region.
ARA Chief Industry Affairs Officer Fleur Brown said the budget focus on hip pocket relief across a range of programs may help bolster confidence, but it's unlikely to deliver the support struggling retailers have been crying out for.
"It's been five years of economic uncertainty for Australian retailers who are still weathering the consumer spending slowdown coupled with ongoing and rising costs of doing business.
More focused support is needed to ensure vulnerable businesses and small businesses in particular can survive and grow.
"Small business owners have been in the trenches, fighting to survive. It's disappointing there seems to be more funding in this budget to enhance red tape and regulation compliance than to educate or relieve businesses of that administrative burden. We are disappointed to have uncertainty around the instant asset write-off, which is not accounted for in the budget."
National Retail Association (NRA) Interim CEO Lindsay Carroll said as Australia's largest private sector employer, the retail industry requires continued government support to maintain economic stability and protect jobs.
"Whilst the continued focus on driving national productivity through the National Competition Policy is a positive mechanism for state and territory regulatory harmonisation, it is too early to understand if the retail sector will benefit from this process.
"The budget contains some important household relief measures such as previously announced childcare support, however we are concerned about the need for long term solutions, including further energy bill relief and targeted incentives to support digital transformation and workforce development."
Ms Carroll said as Australia's largest private sector employer, the retail industry requires continued government support to maintain stability and protect jobs.
"Retailers face persistent cost pressures – from rising leasing, energy, transportation and insurance costs to supply chain impacts. Our retailers are also having to compete with ultra low-cost global operators who don't pay taxes or employ Australians. We can't have an economic recovery without a retail recovery, and we need to make sure they have the means to compete.
"With the impact of ex-Tropical Cyclone Alfred racking up at least $13.5bn in costs, we are also disappointed at the absence of clear resilience measures for weather events including floods and bushfires," she said.
As the country heads into the election period, the ARA and NRA will actively engage with policymakers to ensure retail interests remain at the forefront of the political agenda.
"Employing one in ten Australians and contributing around 18 percent to GDP, retail is the backbone of many communities, and strong government policy is crucial to ensuring its long-term success," Ms Carroll said.
"As we build towards the Federal Election, the ARA and NRA are focused on helping to drive innovation, resilience, and job growth for the $430 billion sector," she said.
