THE Australian Retailers Association (ARA) said the trade figures released today by the Australian Bureau of Statistics (ABS) illustrate a healthy lead up to the 2016 Christmas period with a year-on-year growth of 3.27% seasonally adjusted.

ARA Executive Director Russell Zimmerman said this year-on-year growth is a positive sign for the industry as retailers remain hopeful that the ARA and Roy Morgan predicted pre-Christmas sales figure of $48.1 billion over the Christmas trading period (November 15 to December 24, 2016) will be achieved.

“We won’t be able to confirm the actual pre-Christmas spend until December retail figures are released next month. However, after speaking with retailers across the country, many reported a strong start to Christmas sales in November due to many consumers getting on top of their holiday shopping early.”

With November leading into holiday season, consumers likely spent more time out and about enjoying the good weather and social drinks as reflected in liquor sales growth of 4.85% year-on-year.

“The Takeaway Services category also demonstrated robust growth, taking the lead again with a 9.91% increase year-on-year reflecting consumer uptake of innovative services and products in the space,” Mr Zimmerman said.

“Another category experiencing a strong year-on-year increase was Clothing, Footwear and Accessories at 5.82%. With the warmer weather approaching and Christmas around the corner, consumers appeared to have hit the shops to update their wardrobes with the early summer fashion trends.”

Despite the closure of a number of Masters stores across Australia, other hardware retailers, particularly Bunnings, lead the charge for another exceptional growth in Hardware at 10.15% year-on-year.

New South Wales proves to be the strongest of the states with a 4.25% growth year-on-year, while all other states remain steady (VIC 3.45%, QLD 3.67%, TAS 3.72%, SA 2.82%, ACT 6.44%). As expected, the mining jurisdictions, WA (-0.57%) and NT (0.31%), reflected a weakness in sales due to the downturn in resources in these regions.

“Though these figures don’t necessarily reflect Christmas sales, they generally provide a strong indication as to what we can expect for retail sales over the festive season,” Mr Zimmerman said.

“I’m confident December figures will prove to be strong as many consumers, including myself, usually leave their Christmas shopping until the last minute,” he added.

MONTHLY RETAIL GROWTH (October 2016 – November 2016 seasonally adjusted)

Household goods retailing (0.2%), Other retailing (-0.1%), Food retailing (0.4%), Clothing, footwear and personal accessory retailing (1.7%), Cafes, restaurants and takeaway food services (-0.8%) and Department stores (-0.3%). Total sales (0.2%). 

Northern Territory (0.3%), South Australia (-0.4%), Australian Capital Territory (0.1%), Victoria (0.4%), Tasmania (0.1%), Western Australia (-0.6%), New South Wales (0.5%) and Queensland (0.1%).

YEAR-ON-YEAR RETAIL GROWTH (November 2015 – November 2016 seasonally adjusted)

Household goods retailing (3.08%), Cafes, restaurants and takeaway food services (4.99%), Food retailing (3.07%), Clothing, footwear and personal accessory retailing (5.83%), Other retailing (10.55%) and Department stores (-3.21%). Total sales (3.28%).

New South Wales (4.25%), South Australia (2.82%), Tasmania (3.72%), Victoria (3.45%), Australian Capital Territory (6.44%), Western Australia (-0.57%), Queensland (3.67%) and Northern Territory (-0.31%).

About the Australian Retailers Association

Founded in 1903, the Australian Retailers Association (ARA) is the retail industry’s peak representative body representing Australia’s $300 billion sector, which employs more than 1.2 million people. The ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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THE Joint Committee of Public Accounts and Audit has launched inquiries into the 2015-16 Defence Major Projects Report, and Defence Sustainment Expenditure.

The JCPAA is a central committee of the parliament with the power to initiate its own inquiries on the Commonwealth public sector.

The Committee has inquired into the Defence Major Projects Report on an annual basis since 2009, and will continue its oversight of the reporting of major Defence acquisitions through its inquiry into the 2015-16 Major Projects Report, which it is anticipated will be published shortly.

The inquiry into Defence Sustainment Expenditure will be considered in parallel to the Committee's inquiry into the Major Projects Report, and will examine matters of finance and public administration. Defence sustainment includes the provision of ongoing parts, supplies and services to Defence systems and assets. This inquiry has been readopted by the Committee after it lapsed following the prorogation of the 44th Parliament.

The Committee invites submissions to the inquiries by Friday, 17 February 2017, noting each inquiry has separate terms of reference. Public hearings will be held in late March 2017. Further information about the inquiries can be accessed via the Committee’s website.

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SALARY packaging bus travel appears to be another tax perk that has slipped through the fringe benefits tax (FBT) net according to the Institute of Public Accountants (IPA).

The ATO class ruling (CR 2016/58) allows an employer to provide a bus travel smart card as part of a salary sacrifice arrangement for bus travel between home and work subject to a few rules.

“This ruling allows a person to salary package bus travel between home and place of employment from pre-tax income,” said IPA chief executive officer, Andrew Conway.

“Normally for taxation purposes, this travel is considered private in nature and employees have to bear this expense from post-tax dollars with no tax relief.

“However, this ruling confirms the anomaly, providing a tax break relating to bus transport whereas such a benefit does not apply to any other form of public transport such as trams, trains and ferries.

“While difficult to comprehend, this absurd anomaly arises from the fact that a bus does not fall within the definition of ‘car’ for FBT purposes. It’s a convoluted process to get to this outcome.

“While it may be a good deal for bus travellers, it is an inconsistency within the tax regime that does not sit well with other modes of transport.  In a world where we are trying to encourage the use of public transport for congestion and environmental reasons, it is hard to justify this outcome from a policy perspective.

“This ridiculous outcome is just the tip of the iceberg when it comes to FBT.

“The IPA has long argued for an overhaul of the current FBT rules which are well past their use by date and no longer reflect modern work practices.

“There has been some effort in recent times to address some of the issues surrounding FBT, such as placing a $5K cap on salary packaged meal and entertainment expenses; and, reforming the statutory formula for cars to remove the incentive to travel more kilometres to lower the FBT charge. 

“In the main, however, the approach has been that of band-aid fixes which has not addressed the complexities associated with FBT.

“FBT has the unenviable reputation of being the tax which is the most administratively difficult for employers and incurs the highest compliance costs relative to the revenue it generates for the Government,” said Mr Conway.

publicaccountants.org.au

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WITH THE SCHOOL holidays drawing to a close in a few weeks, retailers across Australia are packing the shelves with back to school products.

The Australian Retailers Association (ARA) expects school shoes, uniforms, backpacks, lunchboxes and stationery purchases to peak in the coming weeks, as parents prepare their kids for the new school year.

The ARA expects many stores and shopping centres to shift their focus from the festive season to back to school supplies this month, as it is their biggest trading period of the year for these product categories.

ARA Executive Director, Russell Zimmerman says retailers providing apparel, footwear, stationary and technology will see a big boost in sales this month with the first day back at school rapidly approaching.

“The start of the new year is a milestone for each student around the country, and the purchases associated with back to school products are crucial to many small and large retailers,” he said.

“With the increased use of technology in our education system and more schools implementing 'Bring Your Own Devices', electronic retailers will likely see a surge in sales for laptops, tablets and other electronic learning accessories.”

Mr Zimmerman says although the cost of stocking up kids for the classroom can add up, savvy parents who are organised and seek out the best deals can minimise the pinch when it comes to purchasing these necessary items.

“Every year we see an increase in back to school supplies online,” Mr Zimmerman said, “And with many parents now back at full time or part time work, online platforms provide parents with the convenience and flexibility they need to prepare their children for the new school year.”

As the school year starts in late January, the ARA encourages those parents still in holiday mode to relax and enjoy the shopping experience, especially with post-Christmas discounts continuing right throughout the month.

“The next big discounting period after January will be mid-year sales in June, so I would encourage shoppers to spend their time in physical stores, enjoying the full customer experience and significant savings across the board,” said Mr Zimmerman.

The ARA and Roy Morgan Research predicts that shoppers will spend $17.2 billion nationwide, in the post-Christmas sales during the period from December 26, 2016 to January 15, 2017.

About the Australian Retailers Association:

Founded in 1903, the Australian Retailers Association (ARA) is the retail industry’s peak representative body representing Australia’s $300 billion sector, which employs more than 1.2 million people. The ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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