There were mixed news for SMB retailers in the budget which overall I thought was a good budget considering that the outlook for the Australian economy does not seem good. Retail now growth is about 3%. Disturbingly the unemployment rate is expected to continue at 5%, wages are not expected to rise much, and inflation is very slowly creeping up.
Some thoughts that struck me were.
1) I am sure my clients will be happy about is that small and medium business have been given another year to take advantage of the federal government’s $20,000 instant asset tax write-off scheme This scheme has been very helpful for many small businesses to allow them to invest in the capital equipment that they need, so it was great to hear that the government would be extended it for another year. This makes it much more attractive to upgrade your equipment now.
2) My main worry of the night was that this $6billion bank levy which is to be collected, will be as sure as the day follows night be passed onto the consumers. This will see an increase in bank fees, and I am wondering whether into other banking products like EFTPOS too.
3) The war on tobacco is continuing, now roll your own and cigars are going up. Since these products are the direct competitor with chop-chop, it will push the illegal tobacco market up. How big an effect no-one knows but what we do know is that the police seem to regularly seizing tobacco plants on a plantation worth $12 million dollars, capturing 13 million illegally smuggled cigarettes, eight tonnes of illegal cigarettes all without making much of a dent on the availability of chop-chop.