Income tax cuts that come into effect from 1 July 2024 are worth $20 billion over the next fiscal year. While a big number on the surface, we feel the figure needs context given other factors such as changes in employment, living costs and savings could offset some of the benefit. Isolating the tax cuts, we estimate about $5 billion could make its way into retail. All else equal, this is a 1.1% boost to retail sales growth for FY25e. However, a 2.5% drop in hours worked, 1.4% rise in either the unemployment, living costs or the savings rate are equivalent to $20 billion and could neutralise the benefit to retail from tax cuts.