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GST applied to overseas items, wage increase

With many continuing to struggle in a volatile market, RUSSELL ZIMMERMAN brings retailers up to date on all the latest industry happenings.

The Australian Retailers Association (ARA) believes this year’s Federal Budget has eased some concerns for retailers, with the promise of personal tax cuts set to drive consumer spending.

Some of the highlights that favour retailers include the GST being applied to overseas purchases from 1 July, infrastructure spending and personal income tax cuts for low and middle-income earners, which will allow consumers to increase their spending across the sector.

These measures highlight the Government’s commitment to implementing tax cuts. It also indicates the Government believes these cuts should include all tax brackets and are needed early, and as fast as possible to drive consumer discretional spending.

Retailers can also look forward to major infrastructure projects such as the Melbourne Airport rail link, Sydney’s rail freight corridor and Hobart’s new river crossing being implemented and completed. These long awaited developments will increase consumer access and retail growth.

Latest ABS statistics

The Australian Bureau of Statistics (ABS) April retail trade figures showed a disappointing 2.62 per cent total seasonally adjusted growth year-on-year.

"The ARA believes local retailers will finally be able to compete on a more level playing field"

The higher petrol prices and declining house prices were partly to blame for a soft April, with consumers tightening their belts to meet their household budgets.

Leading sectors of year-on-year turnover growth in April were hardware and building, (5.33%) and cafes and restaurants (4.86%). While department stores (-3.74%)and clothing (0.56%) returned to their well-documented struggles.

An unseasonably warm autumn impeded winter apparel sales, with a later than usual break in the weather pressuring retailers to begin early discounting to keep the tills ringing.

Across the country, the States that showed the strongest year-on-year growth were Victoria, (4.73%) Northern Territory (3.64%) and New South Wales (3.55%). The Australian Capital Territory, (2.85%), Tasmania (2.82%) and South Australia (1.76%) remained steady.

Western Australia (0.1%) saw a slight increase for the first time in 2018. Concerningly, Queensland saw a major drop off, posting a 0.03 per cent rise to lag behind the rest of the country.

However, the ARA believes local retailers will finally be able to compete on a more level playing field once the GST changes come into effect, and we are hoping this will see consumers increase their spending in local stores.

Minimum wage update

The Fair Work Commission (FWC) recently announced the national minimum wage will increase to $719.20 per week, or $18.93 per hour from 1 July 2018. The General Retail Industry Award (GRIA) will increase to $789.90 per week, or $20.79 per hour for full-time and part-time employees and $25.98 per hour for casuals.

As the retail industry is volatile at present, the ARA sought a minimum wage increase of 1.9 per cent to increase staff employment by 3.5 per cent over the next 12 months.

We believe the minimum wage increase is well above inflation, putting the brakes on employment and innovation throughout the industry, which is detrimental for the retail sector.

The ARA is passionate about maintaining a sustainable wage growth and would like to see retailers be given the chance to not only invest in their business, but to invest in employment to promote retail as a vibrant career choice for all Australians.

The Australian Retailers Association (ARA) is the largest association representing the country’s $310 billion retail sector, which employs more than 1.2 million people. Providing expert advice across multiple disciplines including leasing and wage rates, the ARA’s mission is to ensure retail success by informing, protecting, advocating, educating and saving money for members.



Russell Zimmerman

Russell Zimmerman is the executive director of the Australian Retailers Association (ARA). Email:

Pink Kimberley Australia

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