Save
Retail reaches turning point: Why consumers will spend more in 2019
After years of sluggish growth, the retail sector has reached a turning point due to the combined benefits of interest rate cuts, fiscal stimulus and a stabilisation of the housing market, according to economists.
Retail reaches turning point: Why consumers will spend more in 2019
After years of sluggish growth, the retail sector has reached a turning point due to the combined benefits of interest rate cuts, fiscal stimulus and a stabilisation of the housing market, according to economists.
In its economic update, the Queensland Investment Corporation (QIC) highlighted previously tough retail conditions that were compounded by falling house prices and a mining slowdown.
It cited optimism in the federal government’s personal income tax cuts of up to $1,080, which it estimated will boost household disposable income by $7.7 billion, or around 0.6 per cent.
Given the tax offset is directed towards low and middle-income earners and is a lump sum, QIC estimated that around two-thirds of the money will be spent rather than saved.
This will boost consumer spending by around 0.4 percentage points in 2019-20.
Based on information from the 2009 tax cuts, QIC considered that around 70 per cent of the additional spending by consumers would be on retail goods, implying a boost to retail sales of around 1.1 percentage points.
Combining the tax cuts with interest rate cuts and house price stabilisation, the QIC is expecting annual average retail sales growth to pick up to around 3.8 per cent in 2020.
Across the states, Victoria is predicted to outperform the other states in retail over the next decade due to stronger population growth, but Queensland and Western Australia are still expected to benefit in the retail sector due to improved mining conditions.
For NSW, the retail sector is predicted to see slow improvement as the housing market stabilises, but this is predicted to be on a smaller scale than seen in previous years.
About the author
About the author
Tax saving
Why fast-tracking tax cuts won’t stimulate the economy
Treasurer Josh Frydenberg has flagged that previously legislated tax cuts could be moved forward in a bid to help stimulate the Australian economy. ...Read more
Tax saving
Last-minute items to check off before 30 June
With the end of the financial year almost here, an accounting firm has outlined key changes with tax returns this year and flagged some last-minute tax strategies to consider before 30 June. ...Read more
Tax saving
Australia’s richest owe the Tax Office $772m
Australia’s elites and private companies fell $772 million in taxes due to miscalculations and deliberate tax avoidance, the Australian Taxation Office has revealed. ...Read more
Tax saving
Do you have to pay taxes on a trust?
Trusts are usually set up for business, estate planning and investment purposes to separate the legal and beneficial ownership of assets held within the structure. ...Read more
Tax saving
Government rebuffs regional allowance and tax concession reform
A review’s findings into the viability of area tax concessions and payments for regional and remote Australians has had its recommendations shut down by the same government who requested the report...Read more
Tax saving
Penalties for tax fraud in Australia
Public taxes are used to fund government projects in relation to health, defence, infrastructure and many other national and local projects that require public funding. ...Read more
Tax saving
Disaster relief payments receive tax-exempt status
The Australian government has made disaster relief payments to bushfire-affected individuals and businesses tax-exempt while extending tax-free financial support to NSW Rural Fire Service volunteers. ...Read more
Tax saving
Are your franking credits working?
Here’s what you need to know about franking credits and how they work. ...Read more
Tax saving
Why fast-tracking tax cuts won’t stimulate the economy
Treasurer Josh Frydenberg has flagged that previously legislated tax cuts could be moved forward in a bid to help stimulate the Australian economy. ...Read more
Tax saving
Last-minute items to check off before 30 June
With the end of the financial year almost here, an accounting firm has outlined key changes with tax returns this year and flagged some last-minute tax strategies to consider before 30 June. ...Read more
Tax saving
Australia’s richest owe the Tax Office $772m
Australia’s elites and private companies fell $772 million in taxes due to miscalculations and deliberate tax avoidance, the Australian Taxation Office has revealed. ...Read more
Tax saving
Do you have to pay taxes on a trust?
Trusts are usually set up for business, estate planning and investment purposes to separate the legal and beneficial ownership of assets held within the structure. ...Read more
Tax saving
Government rebuffs regional allowance and tax concession reform
A review’s findings into the viability of area tax concessions and payments for regional and remote Australians has had its recommendations shut down by the same government who requested the report...Read more
Tax saving
Penalties for tax fraud in Australia
Public taxes are used to fund government projects in relation to health, defence, infrastructure and many other national and local projects that require public funding. ...Read more
Tax saving
Disaster relief payments receive tax-exempt status
The Australian government has made disaster relief payments to bushfire-affected individuals and businesses tax-exempt while extending tax-free financial support to NSW Rural Fire Service volunteers. ...Read more
Tax saving
Are your franking credits working?
Here’s what you need to know about franking credits and how they work. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
