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Message from the CEO, Dominique Lamb: 5 June 2018

June 05, 2018

As you’re all aware, last Friday the Fair Work Commission (FWC) raised the national minimum wage by 3.5 per cent effective from July 1 2018.

The FWC, the ACTU and other supporters of this decision seem to think that retail owners are swimming in cash at the moment. They must be living under a rock.

As the ABS figures for consecutive months have shown, retail sales have been sluggish to say the least in the opening months of 2018. The situation is by no means dire, however, the sector has certainly experienced betters times.

The NRA is not ideologically opposed to ever raising the minimum wage. Indeed, in previous years we have recommended wage rises higher than any other employer group. Put simply, when the case is there to raise the minimum wage the NRA supports doing so, when the case is not there we don’t support an increase.

While this decision is just numbers on a page to the unions and the Fair Work Commission, it is real money out of the pockets of small business owners – in some cases tens of thousands of dollars per year.

In compiling our submission, we assessed the current state of retail and sought direct feedback from you, our members. Subsequently, we came to the firm view that at present the sector is confronting a challenging environment and imposing a significant increase in the minimum wage would do more harm than good.

Our main concern is that this decision will impact on the ability of small business owners to employ people. Due to the current state of Australian retail, many of you do not have the option of raising prices to find the extra money, and that means that in many cases staff hours will need to be cut. The merits of awarding a pay rise to a low-wage worker is pointless if they have their shifts cut or their job lost altogether.

On a more positive note, last Friday saw the official start to the End of Financial Year (EOFY) sales period. We’ve crunched the numbers and the NRA is confident that retail sales will come in at a tick under $26 billion throughout June.

Although many states experienced an unseasonably warm autumn, temperatures plummeted in Brisbane, Sydney and Melbourne during the opening days of winter. The cold start to winter, combined with bargain prices, should see a far better month for department stores and fashion outlets than we have seen in the first half of 2018.

EOFY sales are a great opportunity for shoppers to get great value on a number of items, particularly winter clothing, and for retailers to wind down on existing stock before July 1. On behalf of the entire NRA team I wish you all the best for the month ahead and hopefully we see retail bounce back during the winter season.

Have a great week.

Dominique Lamb, CEO. 

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