The Australian Retailers Association (ARA) has largely welcomed the Victorian Government's 2021-22 State Budget.
Measures such as investment in skills, CBD revitalisation, tax relief and investment into mental health have been welcomed by the organisation.
However, it has also questioned "the unintended consequences of extra levies on business and land tax increases" during the recovery from the pandemic.
"With new a new levy being introduced to businesses with national wages above $10 million, to be applied as a payroll tax surcharge, we question the net outcome on business," ARA CEO Paul Zahra said of the measure.
"Land taxes will increase for commercial property owners and that may have flow on effects for retail tenants through higher rents.
"At a time when many smaller retailers are confronting deferred rental debt, particularly within CBDs and the travel retail space, the impact of this could be problematic for struggling businesses," he said.
Zahra also expressed concern that the way in which the mental health measures were being funded could also have a negative impact on the overall recovery.
"Mental health has never been more important after the challenges for many businesses over the past twelve months and we welcome this as an ongoing area of focus for this year’s Budget, with an overall investment of $3.8 billion over the next four years.
"This includes a greater focus on early intervention and outcome driven support.
"Whilst this investment is welcomed, we are concerned about the unintended consequences of the way it is being funded as a payroll tax surcharge on business during this critical time, which could undermine the overall impact of this budget on the State’s economic recovery," he said.
However, Zahra praised the state government's investment into skills and said the ARA is ready to work together to implement these measures in the retail industry.
"Addressing skills training and skills shortages is vital to our business recovery within retail.
"The ARA welcomes the Victorian Government’s commitment to skills, which includes $86 million to establish the Victorian Skills Authority, providing students with improved training options and clearer pathways to jobs.
"Retail employs one in ten Australians, however, has been missing as a key industry of focus within many of the skills and training schemes over the past year.
"We look forward to working with the Victorian Government on how this funding may be applied to retail to address the critical skills shortage the industry is experiencing.
"As Australia’s largest private sector employer, retail plays an important role in the employment and skills rebound," he said.
Zahra added that the investment into Melbourne CBD is also welcome news to retailers operating in the region.
"CBD’s play a critical role in economic outcomes for all states and the Melbourne CBD is not the thriving hub it once was, with office occupancy rates still low and a lack of international tourists and students continuing to significantly affect small businesses in particular.
"We applaud the efforts of the State Government and the City of Melbourne to help and the $107 million investment to revitalise the Melbourne CBD, which includes support for more outdoor dining, will help attract more people back to the city and benefit those retailers who are continuing to do it tough," he said.