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Talk of a budget emergency won’t boost consumer confidence

2014 Federal Budget

The announcements made by the Federal Treasurer this evening are unlikely to have a positive impact on consumer confidence. Initiatives that reduce disposable income, such as the “Budget Repair Levy” won’t be welcomed by the retail sector. Overall it’s a tough budget, but unlikely to significantly negatively impact business.

Joe Hockey calls it a “Contribute and Build Budget”. He’s looking for business to help drive the economy and create new jobs. It’s not all doom and gloom with some measures that will help the disposable income of some. Changes to the Family Tax Benefit Part B would mean extra income for some families.

The scheme for encouraging employment of 50+ year olds may mean they find jobs in retail. “Whilst many retailers would love to have more experienced and mature store staff, quite a bit of training to help people re-skill for retail is required” said Simon Trivett, National Head of Retail at Grant Thornton Australia.

Nevertheless this initiative is encouraging for small and medium enterprises according to leading accounting and advisory firm Grant Thornton Australia.

“Talk of a budget emergency was somewhat inconsistent with the messages coming out of the RBA when reviewing cash rates and this could be confusing for consumers.

“Hopefully we see things settle down and the promising growth in retail over the last few months will continue,” says Trivett.

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