Australia’s retail industry has backed the Coalition’s proposal to introduce a permanent $50,000 instant asset write-off, arguing the measure could encourage small businesses to continue investing despite difficult economic conditions.

The Australian Retail Council said the policy would provide greater certainty for retailers grappling with weak consumer spending, rising costs and ongoing pressure on margins.

The retail sector remains one of Australia’s largest industries, employing more than 1.4 million people and contributing around $444 billion to the national economy. Industry representatives say long-term investment incentives are becoming increasingly important as businesses delay spending decisions amid economic uncertainty.

Australian Retail Council chief economist and chief policy officer Glenn Fahey said smaller retailers in particular would benefit from a permanent tax arrangement rather than temporary or short-term measures that frequently change between budgets.

Under the Coalition proposal, businesses with annual turnover below $10 million would be able to immediately deduct eligible purchases up to $50,000, allowing retailers to invest more confidently in areas such as technology, security systems, equipment and store upgrades.

Fahey said certainty around tax settings was critical for businesses planning longer-term investments aimed at improving productivity and competitiveness.

The retail sector has consistently lobbied governments for stable investment incentives, arguing businesses are more likely to commit capital spending when policy settings remain predictable over time.

The industry body also welcomed support from both major political parties for making the instant asset write-off permanent, describing bipartisan backing as a positive sign for small business confidence.

Beyond investment measures, retailers are also closely watching proposals aimed at easing regulatory complexity and reducing compliance costs across the sector.

The Coalition has flagged plans to simplify business regulation and reduce administrative burdens, an issue the retail industry says has become increasingly expensive due to overlapping state and federal requirements.

Research commissioned by the Australian Retail Council and conducted with Mandala previously found fragmented regulations across Australia were weighing heavily on productivity and creating additional costs for both businesses and consumers.

Retail groups argue inconsistent rules across jurisdictions add unnecessary complexity to day-to-day operations, particularly for national retailers operating across multiple states.

Fahey said retailers would be paying close attention to the detail of any future regulatory reform package, particularly measures designed to reduce duplication and lower operating costs.

The industry body also expressed support for proposals aimed at protecting household purchasing power, including tax indexation measures intended to reduce bracket creep over time.

Retailers believe stronger household spending capacity remains critical for the sector, particularly as discretionary spending categories continue facing softer demand amid cost-of-living pressures.