Retailer Myer has warned the proposed increase to the Medicare levy will hurt sales at its stores, since it will affect its direct customer base.

The federal government confirmed today it planned to increase the Medicare levy by half a percentage point, which will cost the average household at least $350 a year. The levy is to part-fund the proposed national disability insurance scheme (NDIS).

The estimated $350 for the Medicare levy increase ‘‘is something they would have spent with us’’, Myer chief executive Bernie Brookes told a Macquarie Investment seminar earlier today.

The proposed levy ‘‘is not good for our customers and may have an impact’’, Mr Brookes said.

Overall, retail sales had not been as volatile this year as they were last year, he said, when equity markets would fall by 120 points in a day.