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Peak retail body supports Victorian budget skills focus, but not happy with tax

Karen Tan
24 May 2021 2 minute readShare
Peak retail body supports Victorian budget skills focus

The Australian Retailers Association (ARA) has responded positively to the Victorian government’s 2021–22 budget commitment to skills and push to revitalise Melbourne’s CBD, with the retail sector particularly keen to benefit from the skills funding.

Retail is in dire need of support after the forced closure of many businesses during the coronavirus pandemic, and skills funding will equip businesses with a skilled-up workforce to help them flourish again.

ARA CEO Paul Zahra said addressing skills training and skills shortages is vital to business recovery, and as Australia’s largest private sector employer, retail plays a vital role in the rebound of skills and employment.

“As a registered training organisation, the ARA welcomes the Victorian government’s commitment to skills, which includes $86 million to establish the Victorian Skills Authority, providing students with improved training options and clearer pathways to jobs,” ARA CEO Paul Zahra said.

“Retail employs one in 10 Australians [but] has been missing as a key industry of focus within many of the skills and training schemes over the past year

“We look forward to working with the Victorian government on how this funding may be applied to retail to address the critical skills shortage the industry is experiencing.”

Australia’s largest retail group also welcomes the Victorian government’s revitalisation plan and funding for the economic recovery of Melbourne city’s central business district.

“CBDs play a critical role in economic outcomes for all states and the Melbourne CBD is not the thriving hub it once was, with office occupancy rates still low and a lack of international tourists and students continuing to significantly affect small businesses in particular,” Mr Zahra said.

“We applaud the efforts of the state government and the City of Melbourne to help and the $107 million investment to revitalise the Melbourne CBD, which includes support for more outdoor dining, will help attract more people back to the city and benefit those retailers who are continuing to do it tough.”

But not all of the Victorian government’s budget plans have been well received by the retail sector.

Mr Zahra said while the increase to the payroll tax-free threshold will provide some important relief for some small businesses, not all will benefit, and some could suffer adverse effects.

“With a new levy being introduced to businesses with national wages above $10 million, to be applied as a payroll tax surcharge, we question the net outcome on business,” Mr Zahra said.

“Land taxes will increase for commercial property owners and that may have flow-on effects for retail tenants through higher rents. At a time when many smaller retailers are confronting deferred rental debt, particularly within CBDs and the travel retail space, the impact of this could be problematic for struggling businesses.”

Retail has, however, applauded the budget’s focus on mental health.

“Mental health has never been more important after the challenges for many businesses over the past 12 months, and we welcome this as an ongoing area of focus for this year’s budget, with an overall investment of $3.8 billion over the next four years. This includes a greater focus on early intervention and outcome-driven support,” Mr Zahra said.

“The ARA looks forward to close consultation with government to deliver an outcome that will benefit those who require the services provided through these budget measures.”

Peak retail body supports Victorian budget skills focus, but not happy with tax
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Karen Tan

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