Struggling retailers left behind in bounce-back

Some retailers have survived COVID better than others. Picture: David Crosling

Australia’s economy is in an enviable position and the federal government deserves credit for the economic response to the COVID-19 crisis. Unemployment is trending down; business confidence is at record highs. We are leaps and bounds ahead of other advanced economies that are still dealing with the crippling effects of the virus. But we cannot become complacent. We need to consolidate our head start in the global recovery, and this year’s federal budget is on the right path towards achieving that outcome. However, it’s not all roses and rainbows. There are some businesses that aren’t sharing the spoils of the COVID-19 bounce-back and have missed out on much needed support.

The uneven recovery

There are two cohorts of retail we remain deeply concerned about. Travel retailers such as duty free shops and stores in airports have been severely impacted by international border closures, along with retailers in CBD locations, especially small businesses in both Melbourne and Sydney, where foot traffic is still catastrophically low.

These are businesses that continue to suffer through no fault of their own, and unlike industries like tourism and aviation they haven’t been thrown a government lifeline beyond JobKeeper. It’s these businesses that are at risk of being left behind in Australia’s economic recovery.

The government says Australia’s border will remain closed until the middle of next year, and even then, that’s no guarantee. International students are also unlikely to return en masse until 2023 — so the challenges these businesses are facing will not go away any time soon.

Addressing the
skills crisis

Australia is facing a skills crisis and retailers large and small are struggling to fill positions, while barriers to employment are also straining productivity. The skills shortage is mainly driven by the lack of skilled migrants, and with the borders staying shut. The government has a renewed focus on upskilling and training programs for Australian workers and jobseekers.

The investment in skills is welcome, including an extension to the JobTrainer program, but for these measures to translate into job outcomes, we need more flexibility for retailers to access them. As Australia’s largest private sector employer — with one in 10 Australians working in the industry — retail will play an important role in the employment and skills rebound.

Budget support measures for small business will continue with an extension of asset write-offs while tax cuts for low and middle-income earners will leave more money in people’s pockets and fuel retail spending.

Women at the heart
of budget measures

There is a clear focus on women as part of this year’s budget — and that’s long overdue — with additional funding for women’s health, childcare (of benefit to all working parents) and domestic violence programs. Women represent a large proportion of the retail workforce, and they own nearly 75 per cent of the discretionary spend. We applaud the efforts of the government to put the issues they face front and centre. There’s always more to do to in this space, but the measures announced in this year’s budget are a positive start.

The $1.7bn childcare package will provide more choice for working mothers and puts more cash into the family budget each week, which are good outcomes for Australian families, the retail sector and the broader economy. We know female underemployment in retail is linked to childcare, but inflexible working conditions are also a major barrier to participation. Many of the industrial relations reforms put on the table over the past year were dropped, leaving flexibility for rostered hours of work for both employees and employers within retail in a very unfriendly place for anyone who is the primary carer of children. We urgently need to complete those reforms to allow women more flexibility, beyond the measures that have been announced in the budget to improve women’s participation.

More sustainability leadership needed

Sustainability is one of the biggest challenges we face as a community, and the retail industry is leading the way and driving a number of positive outcomes across their businesses and the broader community.

We would have liked to have seen stronger leadership from the government on sustainability and in relation to the transition to net-zero emissions. Our members are leading the retail sector in reducing greenhouse gas emissions but need policies that de-risk and incentivise investment in low-carbon technology, as they continue to work towards their ambitious targets.

The road to recovery

Employing one in 10 Australians, retail cannot be viewed as a passenger in our journey to economic recovery, but a key industry player. Retail must be front and centre of the government’s focus and have consistent opportunities to access the relevant skills and training programs so our people and businesses can thrive in the years to come.

Paul Zahra is CEO of the Australian Retailers Association.