The lawnmower-led recovery

This was a Bullshit budget and Joe Hockey knows it. Anyone who says that the budget is on incredible path to surplus while recording another, and increasingly large, deficit has serious credit ability problems.

 Joe Hockey thinks that with luck, the public will not realise that this budget is just about as bad as the last one.
Joe Hockey thinks that with luck, the public will not realise that this budget is just about as bad as the last one.

The best that the Prime Minister and the Treasurer were able to do was to go out exhorting people, small business or otherwise, yo “have a go”.  Whenever this prime minister resorts of the vernacular, you know that we are about to get another dose of smoke and mirrors.

Demented goldfish moment: Similar hot air around a ” fair dinkum” paid parental leave scheme.  Now replaced by rhetoric of “double dipping” by working mums.

Finance minister Mathias Cormann's wife has been double dipping: but only by this much.
Finance minister Mathias Cormann’s wife has been double dipping: but only by this much.

The latest lot of smoke and mirrors is providing immediate 100% deductibility for purchases under $20,000 (previously $1000) to small businesses with a turnover of less than $2 million a year.  This concession applies to as many purchases as a small business may wish to make.

“Having a go” means claiming an immediate deduction for the following:

Cars, vans, utes, trailers, motorbikes, lawnmowers, ovens, fridges, coffee machines, other machinery, kitchens, tables and chairs, carpets, printers, photocopiers, tools, welding equipment, saws, generators, pumps, solar panels, heating, hot water units, water tanks, airconditioning units, sound and security systems, computers.

And here is a purchase that would be particularly tempting and certainly just the thing to lead an economic recovery.

Honda U.K. Builds 130-mph Ride-On Lawn Tractor
Honda U.K. Builds 130-mph Ride-On Lawn Tractor

The assumption is that the purchase of lots of lawn mowers will somehow lead to an increase in employment.

And when you look at the list of things in a small business can purchase, you would be forgiven for thinking that a fair number of them would find their way home over the weekend, if they  weren’t already stored in the garage.

It is highly unlikely that the ATO, whose numbers have been gutted by the current government, will be able to police the bona fides or otherwise of purchases made under the scheme.

It’s also surprising that the Prime Minister, who wanted to be known as the “infrastructure Prime Minister”, has not provided any stimulus for the provision of infrastructure to stimulate the economy and the job market. But instead he opted for the cheap trick of offering tax deductions to small business.

And hidden away in this budget are large cuts to health and education that will make a significant difference to the lives of people reliant on public hospitals and public schools.

In addition, there are the items that are still stalled in the Senate: the Medicare co-payment, the cuts to university funding and the changes to taxation concessions for families. There is no indication that the Senate will change its mind and pass these items and this may provide the trigger for a double dissolution.

Certainly, the initiatives in providing increased childcare are dependent upon these millions being passed through the Senate.

The cynicism of this particular budget will be seen when Abbott endeavours to blame the opposition in the Senate for the failure to provide the concessions to small business and increased childcare payments because they will not pass the cuts that will fund.

Make no mistake, this budget is not about “having a go”. It’s a cynical political manoeuvre  by an increasingly unpopular government whose options for re-election are rapidly diminishing.

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