Mixed feelings have been expressed by retailers following the announcement of the 2011 Federal Budget.

Small businesses will be allowed to claim up to $5,000 as an immediate deduction for any car purchased during the 2012-13 financial year.

According to Commonwealth Bank economist, James McIntyre, this is some good news for small businesses.

“The extension of the asset write-off to motor vehicles is supportive of investment, particularly for small businesses seeking to upgrade their vehicles in order to adapt to rising petrol prices,” he said.

However, ARA executive director Russell Zimmerman pointed out that while the write-off will be an incentive for investments, businesses will not be able to actually claim until 2013/2014 financial year, particularly in a period where retailers need some relief now.

“As the changing market place is demanding Australian retailers deliver online shopping facilities, there is nothing in this budget that gives incentive for retailers to invest in the training or the infrastructure they need to provide best practice online service to Australian customers,” he said.

The federal government has also announced $3 billion in new money will be used to create the Building Australia's Future Workforce package.

This has been welcomed by the Australian National Retailers Association (ANRA) CEO Margy Osmond who said the focus on training and workforce participation will have positive flow on effects for retail.

Chief economist Michael Blythe agreed saying that new measures associated to boost skills help ease pressures as the labour market tightens

“Measures focusing on increasing skilled migration, educating the workforce, improving the welfare-to-work trade-off and boosting infrastructure are all positives for the longer-run economic picture,” he said.

Additionally, the Federal Budget will also deliver a cashflow benefit by reducing pay-as-you-go income tax installments for the upcoming financial year – delivering a cashflow benefit of $700 million.

But ARA’s Zimmerman said: “Changes to quarterly PAYG instalments will mean little for retailers who mostly lodge PAYG monthly.”