Retailers cautiously optimistic following Small Business Summit

Posted by James Ferre on 27th October 2008

Peak retail industry body the Australian Retailers Association (ARA) left optimistic the Rudd Government is providing the leadership needed to respond to the global financial crisis following the Small Business Summit on Friday, but added that more could be done to help small business.

Prime Minister Kevin Rudd and Small Business Minister Dr Craig Emerson announced a number of new measures on Friday including:

1. Small Business Support and Advice during the financial crisis from Business Enterprise Centres and other registered business organisations, through a $4 million Government investment over 2008-09 and 2009-10;
2. A guarantee of on-time payment for new small businesses contracts with Commonwealth Government Departments – up to $1 million, from 1 December, within 30 days – otherwise small business will have the right to charge penalty interest; and
3. A commitment to developing standard procurement documents for co-ordinated procurement and standard approaches to make it cheaper and easier for small businesses to sell to the Government.

Mr Rudd also said the Australian Tax Office is committed to working with small businesses that are having difficulty in meeting their tax obligations, including often allowing for tax debts to be paid by instalments over a period of time.

ARA Executive Director Richard Evans said the initiatives the Prime Minister announced on Friday represented another positive step towards supporting retailers and small business. “However, there are other initiatives the Government could consider, including the deferring of costly legislation that will impact retailers heavily over the coming months and into the expected tough time of early 2009,” he cautioned.

“Legislation mooted for the next twelve months directly having an impact on hard-hit retailers include the potential for plastic bags levies and bans, the Emissions Trading Scheme, the Award Modernisation process, Parental Leave, Unit Pricing and tobacco controls. These changes to legislation will add compliance and increasing costs for smaller retailers which could be the difference between profit, breaking even or closing.”

“For instance the Draft Award Modernisation will increase the wage bill in all states for all retailers. A small retailer with two full time and two casual employees will have a 14 percent wage bill increase on average across Australia – this is from a high of 21.6% in NSW to a low of 11.3% in the Northern Territory,” Mr Evans said.

“Right now is the time retailers need direct help. The Government has initiated the $10.4 billion Economic Security Strategy to provide an important injection of cash to flow through the economy. But it is also time to consider to defer (not stop) legislation that will directly impact small retailers until we are through the most uncertain period of trade during the next six months.”

“The Prime Minister is showing macro leadership and now he needs to show micro leadership by deferring any additional compliance and other costs for retailers,” Mr Evans added.

“We support the notion that government should continue to govern but it is now vital for them to consider the impact their decisions will have on retailers and the broader small business market. Hopefully, Christmas predictions will be clearer in the next couple of weeks,” Mr Evans said.

If businesses are having problems, they should contact the Tax Office on 13 11 42 – assistance offered would be based on the taxpayer’s individual circumstances.