The flood tax would result in less discretionary spend for consumers, which would be damaging to the retail sector already impacted by the rising cost of living and the threat of further interest rate rises ARA Executive Director Russell Zimmerman said.
“While the cost of the flood tax will differ from family to family, the idea of a new tax is enough to significantly dampen consumer confidence to spend at a time when retail sales are at depleted levels.
“Retailers really need a break after a slow Christmas and over 18 months of poor trade, instead the flood tax is just another blow to the already struggling sector.
“Further expenditure cuts from the Federal Budget could have ruled out the $1.8 billion tax increase, which will place continuing pressure on the capacity for consumers to inject funds into the economy via retail sales.
“CPI figures released earlier this week show Australian families are already struggling with an increased cost of living – the most significant price rises this quarter were for vital food items like fruit.(+15.5%), vegetables (+11.4%) and over the year increases to essentials like electricity, gas and water have all hit consumers hard, Zimmerman said.
Flood affected small retailers interested in a complimentary three month membership with the ARA should call 1300 368 041 or email email@example.com by mid February.