Why retailers should feel better now

Simon Evans and Sue Mitchell
Apr 3, 2019
AFR
KEY POINTS

• Gerry Harvey expects an across-the-board impact from the tax cuts
• Macquarie thinks Harvey Norman, JB Hi-Fi and Domino’s Pizza should benefit
• Citigroup says 10 million Australians should be better off

Harvey Norman executive chairman Gerry Harvey expects a positive ”domino effect” on consumer spending from the federal budget tax cuts, which will prompt shoppers to buy shoes, fridges and televisions.
“I think it will be across the board and it will have a domino effect,” Mr Harvey said.
“It will be right across from everything to shoe, handbags, televisions and fridges, you name it,” Mr Harvey said. “I’m feeling a little more optimistic than I did a month ago”.
Tax offsets will almost double to $1080 for single earners with incomes under $90,000 and are available when this year’s tax returns are lodged. The reductions amount to $2,160 for dual-income families.
The rebate is worth about one week’s wages, after tax, for people on average weekly earnings, or about $20 a week. “Enough for three rounds of coffee and a muffin!” said AMP Capital chief economist Shane Oliver.
According to Citigroup, the offset will affect about 10 million Australians, or about 40 per cent of the population, and amounts to $726 per taxpayer or $7.3 billion.