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Financial Website Directory Ireland

Myer Boss Issues Retail Price Warning

Author: Fixed Rate Bonds
Category: Trading
Date Added: August 12, 2011 09:16:46 AM
Page Views: 3590

Bernie Brookes has warned the government's new carbon tax could drive consumer prices higher.


Australia's consumers have been warned that government plans to introduce a controversial new carbon tax may mean they will be forced to pay more for goods with their credit cards.

The Herald Sun reports that Myer chief executive Bernie Brookes claimed retailers will be left with little choice but to push prices higher when the levy is introduced and questioned the wisdom of implementing new taxes at a fragile time for the economy.

"In the medium to long term, any extra cost will have to be passed to consumers ... we have to raise prices," he commented, suggesting the charge could jeopardise customer confidence after months of uncertainty.

The Master Builders of Australia also voiced alarm about the carbon tax, advising householders that the average price of a "modest" property could surge by up to $5,000 as a direct result, while home loan repayments may rise by as much as $500 per year.

However, official data from the Treasury estimates that the average Australian income will climb by around 16 per cent over the next nine years, with the impact on inflation relatively muted at 0.7 per cent.

Treasurer Wayne Swan stressed the importance of preparing for the shift to a low-carbon economy and insisted the long-term impact on expansion would be negative unless the government lays the groundwork for clean energy.

He also played down the effect of the carbon tax on consumer prices, predicting the cost of the majority of everyday goods would rise by less than 0.5 per cent. Mr Swan said the benefits of the plan would far outweigh any potential negatives.

Meanwhile, National Australia Bank revealed that its business confidence index suffered a sharp fall last month on the back of weak spending in shops. The gauge dipped from six points in May to zero in June, well below the long-term average of seven.

Australian retailers have admitted to uncertainty about the sector's prospects for recovery, with consumers across the country keeping their credit cards in their wallets due to economic uncertainty.

Speaking to the Australian, Kira Sutton - manager of a JR's Surf & Ski store in Adelaide - revealed there had been a significant slowdown in activity over recent months and suggested shoppers were opting to put money in savings accounts instead.

"Fewer people are coming in; there's definitely less foot traffic around," she observed. "People are just saving, I think."

Brisbane mother-of-two Michelle Martin added that while she was one an enthusiastic consumer, the soaring cost of living - particularly rising energy bills - has forced her to cut back on retail therapy for the time being at least.

Earlier this week, a report from Nielsen indicated that consumer confidence fell sharply during the second quarter of the year due to "unrelenting price increases".

 

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