The stability of Australia's employment levels is vital to the country's economic recovery, according to a retail industry body.

The Australian Retailers Association (ARA) has urged the prime minister Kevin Rudd to focus his upcoming Federal Budget in May on employment incentives designed to encourage businesses to maintain their workforce.

Calling on the government to refrain from implementing taxes on small and medium-sized enterprises, the ARA instead suggested that these organisations should be provided with education and training support.

Richard Evans, executive director of the ARA, outlined the importance that Australia's retail sector has on the country's labor market.

He said: "Retailers create employment for 15 per cent of working families through full-time, part-time and casual jobs for 1.5 million Australians … and they now need incentives to continue providing employment opportunities."

Unemployment levels in Australia increased to 5.7 per cent of the population in March, which is the equivalent of more than 650,000 citizens.© Adfero Ltd