ARA says times are 'a-changing in retail'

THE Australian Retailers Association (ARA) believes the three key economic Bills which passed the Senate yesterday will bring significant changes to the retail industry.

From late-2019, gift cards issued across Australia will be regulated under a new law which will enforce a minimum three-year expiry period.

Russell Zimmerman, executive director of the ARA, said while many retailers and the ARA were against the expiry extension, the new Federal legislation will remove inconsistencies which were caused when NSW acted alone on similar legislation at the start of this year.

“Although the ARA were not impressed with the three-year extension, we called for an 18-month transitional period for retailers to get rid of old stock,” Mr Zimmerman said.

“Instead we were left with a 12-month transitional period, placing more strain on retailers already operating in an unstable environment. We will continue to lobby for exemptions to the new law to ensure the impacts on retailers are limited.”

Australian retailers will also be contending with new requirements under the Australian Consumer Law (ACL) with the Australian Consumer Law Review also passing the Senate yesterday. Mr Zimmerman said this new legislation will bring key changes to pricing rules regarding fees and charges, product safety provisions, and the extension of consumer guarantees.

“The positive developments coming out of yesterday’s onslaught of economic developments include the passage of the Lower Taxes for Small and Medium Businesses Bill 2018, which will mean small retailers will receive a lower tax rate five years earlier than expected,” Mr Zimmerman said.

“Previously, all businesses with annual turnover of $50 million or less could expect to see their corporate tax rate slowly decrease over 10 years.”

This new legislation means that the transition has been fast-tracked, and the small business corporate tax rate will drop to 26 percent in the 2020/2021 financial year, and then to 25 percent in the 2021/2022 financial year.

Mr Zimmerman said these moves follow on from the ARA’s continued efforts to lobby the Government to ease the pressure on retailers, to lower their costs, increase their flexibility, and provide investment certainty so that small and medium retailers can grow their businesses, hire more staff, and compete more effectively.

While this news is a boon for small and family retailers, the reality is that Australia now has a two-tiered corporate tax rate, which increases the burden of Australia’s already-complex tax system.

“At 30 percent for all businesses operating over the $50 million turnover threshold, Australia’s top corporate tax rate remains one of the highest in the developed world,” Mr Zimmerman said.

The ARA will continue to lobby the Government to apply the lower tax rate to businesses of all sizes and will update members on any further developments through their fortnightly newsletter and member alerts. 

About the Australian Retailers Association:

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association, representing the country’s $310 billion sector, which employs more than 1.2 million people. As Australia’s leading retail peak industry body, the ARA is a strong pro-active advocate for Australian retail and works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041. To subscribe to the ARA’s fortnightly newsletter, click here.

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