Retailers call for extension to small business tax breaks
The Australian Retailers Association (ARA) is calling for the Federal Government’s additional 30 per cent tax break for small business to be extended to eligible assets purchased before July 2010, after almost 60 per cent* of SME retailers said they won’t be taking advantage of the incentive by the 30 June 2009 deadline.
ARA Executive Director Richard Evans said extending the deadline on the small business tax breaks offered as part of the Federal Government’s Nation Building and Jobs Plan would allow SME retailers, who are still suffering after months of stagnant and declining growth last year, to responsibly invest back into their business.
“The Federal Government’s small business tax break of an additional 30 per cent deduction for eligible depreciating assets costing $1,000 or more, could help the 80 per cent of independent retailers who turn over less than $2 million per year. But the majority of them can’t afford the initial outlay of investment during the first half of this year,” Mr Evans said. “Our forecast modelling suggests SME retailers will be in a better position to invest in depreciating assets by the end of the 2010 financial year.”
“The March quarter is always the toughest for retailer cash flow as credit card bills from Christmas roll in and back to school costs rein in consumer discretionary spend,” Mr Evans explained. “But retailers are hopeful improved growth will return to the sector by the September quarter when SME retailers will be better placed to invest in assets eligible for the additional 30 per cent tax break.”
“SME retailers are still waiting for last year’s interest rate cuts – which usually take six months to flow through to the retail sector – to have an affect on consumer spend. And retailers aren’t expecting to see any impact of the Household Stimulus Package until the September quarter,” Mr Evans said. “Let’s allow these positive economic influences to impact the market and give SME retailers – who have been suffering for months – a chance to take advantage of the Federal Government’s small business tax breaks and put a much needed boost of investment back into their businesses.”