PEAK retail industry body the Australian Retailers Association (ARA) expects consumer confidence to return once the formation of a new Gillard minority government is fully consolidated.
Following two and half weeks of hung parliament, ARA executive director Russell Zimmerman says it is now up to the re-elected Labor Government to announce its front bench as quickly as possible.
“To minimise the lack of consumer confidence caused by political uncertainty, the ARA would like the announcement of new ministries and departments as well as any changes to parliamentary process under a minority Government to be made sooner rather than later,” says Zimmerman.
“Retailers and the wider business community, including small businesses, expect thorough consultation before major government decisions are made and the ARA looks forward to working closely with the new Government and the Greens, who now hold the balance of power in the Senate.
“The ARA expects the new minority Gillard Government to always give ample consideration to the important role the retail sector plays as Australia’s largest employer and the role small business plays as the engine room of the nation’s economy.
“Similarly, retailers would expect the Greens to use their balance of power in the Senate to ensure small and independent businesses are given political clout over any negotiation of legislation in the Senate.”
Earlier in the day, the retail body applauded the Reserve Bank’s decision to hold interest rates at 4.5 percent.
Zimmerman says the decision allows time to assess consumer reaction to the new minority Government and subsequent changes to parliamentary process.
“Traditionally consumers react to any political uncertainty by keeping their wallets closed and Australians haven’t seen a minority Federal Government since the 1940s, so we need time to assess how they will react to these unique political circumstances.
“The apprehension consumers have had to spend in retail during the past two and a half weeks of hung parliament may continue while the new minority Government irons out changes to parliamentary processes.”
Queensland retail growth improved by 1.5 per cent over the month from June to July, but according to the ARA it’s not good enough to indicate that consumer habits are bouncing back.
Across all states the figure was 0.7 per cent given negative growth in WA, the ACT and Tasmania. The sunshine state recorded second highest growth behind Victoria at 1.7 per cent.
Zimmerman says the ABS July retail trade figures show that retail trade is encouraging but it’s not enough to suggest that retailers are out of the woods.
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