What the latest budget means for you.
After much anticipation the 2010 budget was finally released last week. The main changes effecting people is the decrease to income tax and the increase to Government Services Tax (gst). The new change to gst poses the biggest impact to New Zealand retailers. The 2.5% increase takes gst up to 15%; quite a large increase considering that retailers are still finding times tough after the global recession.
In a recent survey, retailers have spoken out against the gst rise. The Newmarket Business Association has found that, of the 400 retailers surveyed, 82% believe that the increase will be ‘bad’. As well as needing to incorporate the new costs, retailers will also have to re-price their stock; a time consuming process.
The increase is set to take place by October 1st this year; giving retailers a few months to prepare for the changes. Margins are tight after a year of slow sales and a long summer stunting winter sales so it looks as though the extra cost will have to be passed on customers. However, it’s likely that stores will increase the price of some things and not of others - a price rise of everything from, for example, $19.95 to $21.06 is just not logical.
Consumers are not likely to notice too much of a difference as the decrease to personal income tax appears to more than balance out the slight increase that will appear on products. Now it’s just a waiting game for the next few months to see how the new budget impacts kiwis’ back pockets!
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Retailworld Resourcing is a recruitment agency that specialises in the retail sector. We place people in retail jobs in New Zealand and retail jobs in Australia, throughout all areas and levels within the retail industry.
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