Retailers suggest second stimulus not working

The Federal Government’s second stimulus package which included billions in cash-handouts to consumers has not helped emplioyment in the retail sector, an industry representative says.

Margy Osmand, chief executive of the Australian National Retailers Association, says that recent unemployment figures from the Australian Bureau of Statistics show that retailers have continued to cut staff.

Osmand said the labour force figures for May showed that 12,400 full-time jobs were lost, while an additional 6000 part-time jobs had been created.

“The first cash handouts, combined with interest rate cuts and Christmas, helped boost retail jobs by 11,000 between November 2008 and February 2009,” she says. “Unfortunately, we have yet to see the same jobs effect, following the second stimulus package.”

The figures contradict a statement from treasurer Wayne Swan, in which he stated that despite small declines in retail employment, the industry now has 15,250 employees it did not have last November.

“The second stimulus package was delivered in an environment where people have begun to be more conservative with their spending, and the issue of confidence has become a serious one.”

Osmand says the prospect of unemployment is keeping “people’s hands in their pockets…you’ve got to watch this situation incredibly carefully at the moment.”

Because of the volatile nature of the indutstry, she also says the figures speak for themselves on why retailers should not have new awards forced on them which will drive up wage bills. Instead, she says, governments should work together on reducing payroll tax burdens.

“The award modernisation process is a concerning one. Penalty rates alone could cost as much as $100 million. What we’ve asked for is a two-year moratorium. We think it’s the wrong time to be making such sweeping changes.”

“If you want to give the sector some certainty, then one of the smartest things you can do is tackle payroll tax. We did some work that said if you reduce payroll tax to 4%, the cost would be about $4.1 billion, if that was split half and half with states concerned and the Federal Government, it would have a significant impact on people retaining jobs.”

Brian Walker, managing director of consultancy firm The Retail Doctor, says that the “jury is still out, to some extent” on whether the stimulus has assisted the retail sector to a large degree.

“All points need to be looked at: retail sales, the labour figures and overall consumer confidence. And there’s certainly good evidence that good retail sales have shown resilience, and I don’t think we can have a full view without understanding those variables.”

“Both points, labour figures and sales, are important but it’s largely sector and retailer specific, and really not conclusive at this point.”

Retail analyst Rob Lake said that the issue of which businesses have been helped by the stimulus package is a relative one. “The stimulus package is helping businesses that are helping themselves,” he said.