Timing of GST increase “bad” says poll of retailer
Timing of GST increase “bad” says poll of retailers
A poll of key Auckland retailers reveals that 82% of respondents believe the timing of the Government’s GST increase from 12.5% to 15% is “bad”.
The email survey of over 400 Newmarket retailers was conducted by the Newmarket Business Association in the past 24 hours.
“Given the very challenging retail environment of the past two years, the timing of the GST increase is viewed by most retailers as poor. Retailers have been knocked around for many months, and they view this as just another obstacle,” says Cameron Brewer, chief executive of the Newmarket Business Association.
Mr Brewer says thankfully consumers will be compensated with tax cuts and so that will minimise the impact. Nonetheless the rise is still going to cost businesses.
The survey showed that 73% percent of retailers believe the GST increase will cost their businesses money to comply, with the likes of changes to computer systems, and re-pricing and re-tagging merchandise.
Mr Brewer says most retailers are set to directly pass on the GST increase to the consumer.
“There’s been a theory circulating that retailers won’t put up their prices come October for fear of scaring off price-sensitive shoppers. However the reality is there is not much room left in most retailers’ margins to absorb the rise. 87% of retailers told us they intend to put up their prices to reflect the GST increase.
“The survey shows retailers do not anticipate people will rush out and buy things before October. Most however are predicting things to go quiet for a while after the higher GST comes in place. 68% of retailers predict that overall retail spend across the country will dip for a period after the higher GST takes affect."
Mr Brewer said 53% of retailers believe the GST increase will initially have a negative impact on their own customers’ spending and subsequently their business turnover. However as far as its long-term impact is concerned, 57% believe the rise in GST will make little or no lasting difference to New Zealand's retail sector overall.
“Our survey shows that generally retailers are not overly anxious about the rise, particularly given personal tax cuts are happening. Most retailers anticipate the hike in GST will cost them somewhat in compliance and turnover initially, but overall any negativity is expected to be pretty short-lived,” says Cameron Brewer.