There has been much said about the Budget, in particular a variety of detailed analyses by tax specialists far more competent than I, thus I do not intend to repeat similar content here; suffice to say it is clearly a Budget that is intended to promote confidence and positive thinking, particularly for its promoters and it is certainly a budget that seeks to ensure the current jockey remains on the horse (pun spotted, but unintended).
On an enlightening note, one of the most critical things that has come out of this is the true acceptance of the fact by government that Small and Medium Enterprises (SME’s) are the backbone and power house of this economy. Going forward they are the most significant asset that we as a country have. In years gone by the mining (development) industry went through a huge growth phase. In doing so it paid salaries for jobs that in many ways could not be perceived or believed. I remember having a conversation with two young women who were allocated a table next to ours on a cruise who were effectively “lolly pop girls” for mining construction work; each earned around $120K, astounding. The impact of this on SME’s was that it bled every other business of staff, why do a qualified job for $75K when you could get the sort of money you could get for unqualified work.
A tax cut of 1.5 percent is certainly not objectionable, but in reality is at the wrong end of the scale. Tax cuts reward business owners are when (and if) they make a profit, most businesses want help with operations and thus the changes to depreciation are an arrow almost to the bullseye.
In reality though, greater effort needs to be made to help businesses stabilise and grow. Borrowing is cheap, but as many will attest business finance is not easy to get (without bricks and mortar), staffing and administrative costs are growing, compliance costs increase almost uncontrollably, taxation is applied at multi-levels, and Court decisions are forever changing the playing field backward and forward. Further, whilst dealing with the law; god forbid getting caught up in a legal stoush without insurance, with the costs of litigation you could well be excused for bringing in the liquidators on day one!
If you really want to bring in a Budget for the future then its underlying premise must be the simplification and clarification of the system within which business in this country is required to operate. Upon this new and solid foundation you will build a system of economy and efficiency that treat all levels fairly and equitably. It will finally be iced with practical, long term and genuine policies that are designed to build a nation and last longer than one ‘vote-buying’ period. It will take a long time to recover from where we are today, surpluses are in the long term not the short term, but we can get there a lot more easily than by the course we will probably take.
Darn, there I go dreaming again, sorry now let me come back to reality…