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Australia's big department stores and smaller retailers are divided on how the federal Government should hand out its A$42 billion ($53.63 billion) fiscal stimulus package.
The plan will give about A$12.2 billion to single-income families and low and middle-income earners in the form of A$900 handouts by Easter.
The Australian Retailers Association (ARA), which represents about 5000 small and medium-size businesses, wants the A$900 cheques to be replaced with a voucher system, so the money is spent and not saved in a flagging economy.
But the National Retail Association (NRA), whose members include Myer, Kmart and Target, said the voucher idea was unworkable.
"The voucher system is a bit gimmicky," NRA executive director Gary Black said.
"In theoretical terms, it might have some appeal but in practical terms ... there would be significant administrative costs."
The ARA's stance has also been slammed by Australia's peak consumer group CHOICE.
"We're not in favour of a voucher system," CHOICE spokeswoman Elise Davidson said. "We think that's insulting to the intelligence of Australian consumers.
"Someone in a more precarious situation needs to pay down debt."
ARA executive director Richard Evans said only a voucher or debit card system would ensure 100 per cent of the stimulus was spent.
"Retailers and the entire supply channel need cash now to sustain employment," Evans said.
"The federal Government must ensure any stimulus package flows through to the economy and doesn't sit in the bank accounts of fearful consumers."
The Australian National Retailers Association (ANRA) - whose members include David Jones, Harvey Norman, Woolworths and Coles - is also lukewarm on the voucher idea.
It is instead calling on the states and territories to uniformly slash payroll taxes to 4 per cent for at least 12 months to boost employment and consumer confidence during the downturn.
"The level of confidence it gives businesses about employing people would flow through to greater levels of consumer confidence: that would make the difference between whether people spend or not," chief executive Margy Osmond said.
The ANRA's proposal would cost A$4.1 billion, with the federal Government called upon to pick up half the tab.
Queensland has Australia's lowest payroll tax rate of 4.75 per cent and the Australian Capital Territory has the highest payroll tax rate of 6.85 per cent. The jobless rate climbed to 4.8 per cent in January for the first time since mid-2006, and almost 37,000 people joined the unemployed last month.
- AAP
