October's Budget 2015 marks the perfect opportunity for the Government to boost consumer spending and confidence through tax cuts, creating jobs and boosting growth, according to Retail Ireland this morning.
With sales of big ticket items like cars and furniture on the up, and consumer sentiment at a seven year high, the government now has the chance to secure the retail recovery, it said.
If the momentum is maintained, Retail Ireland predict consumer spending will rise 1.9pc this year, and 2.9pc next year.
More up-beat consumers are also saving less, the savings rate increased to 16.1pc in 2009 but is now falling back towards a more normal 8pc, it points out.
"It is vital that the budget supports these positive trends, especially as stronger growth means a much smaller economic adjustment is needed than was initially envisaged," Retail Ireland said.
In its Budget 2015 submission, called for income tax reductions, a cut in excise duty, no increases to the cost of doing business and new incentives for retailers to develop vacant lots in town centres. The group also called for the retention of the successful reduced 9pc VAT rate on tourism-related services, and for consideration to be given to replicating this approach in other sectors.
Retail Ireland Chairman Frank Gleeson said: "Sales have grown every month this year, but the retail recovery shouldn't be taken for granted. Tax cuts will boost disposable income and increase spending in the domestic economy. This will translate into thousands of new retail jobs."
"So far this year we have seen huge growth in the sale of big ticket items, such as cars and furniture. This is spending that was deferred during the recession. Food, fuel and clothing sales have also improved, but from a low base. A lot of the growth has been on the back of reduced prices due to intense competition. The average shopper now visits up to four supermarkets every month to get the best deals. The retail recovery has some way to go."
"Retail was on the very sharp end of the recession. 50,000 jobs were lost and many businesses closed. Despite this, with 270,000 employees the sector remains Ireland's largest and most geographically diverse. Now is a critical time for retail, with intense competition keeping prices down, the decisions on budget day must ensure the recovery continues and gathers pace."