Peak retail industry body, The Australian Retailers Association (ARA) has called on the Federal Government to replace the $900 stimulus package cash handout for low to middle income earners, in favour of a debit card or voucher system.
The ARA, who represent about 5000 small and medium sized businesses, believes that the cash bonus will do little to stimulate the economy, with worried consumers more likely to save the money in light of the looming recession.
ARA executive director Richard Evans said that there is no guarantee the proposed $900 cash handouts will flow through the economy via retail sales.
“Cash bonuses from the Federal Government will put economic recovery in the hands of Australian workers who are failing to respond to positive economic conditions at the moment.” He said that these Australians will be more likely to save the money or pay off looming debts, “We are seeing a trend towards saving and paying off debt which is not a bad thing – but for any economic stimulus package to do its job, funds must flow through the supply channels.”
The ARA said that the voucher system will ensure that 100 percent of the stimulus dollars are injected back into the economy rather than sitting in bank accounts.
The Australian National Retailers Association (ANRA) – whose members include David Jones, Harvey Norman, Woolworths and Coles, have dismissed the idea, instead calling on states and territories to slash payroll taxes to boost employment and consumer confidence.
”The level of confidence it gives businesses about employing people would flow through to greater levels of consumer confidence: that would make the difference between whether people spend or not,” ANRA chief executive Margy Osmond said.
What do you think about the ARA’s proposed voucher system?
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