Corporate welfare outrage

The 2014 Federal Budget cuts back family payments, places tough new rules around welfare for young people, taxes doctor visits to fund medical research, and reindexes the pension.

But it’s not all bad news!

If you own a business that’s more than three years old, has good turnover, and operates in any one of 14 favoured sectors, you’ll be eligible for $20,000 of taxpayers’ money to hire management consultants.

Better, you could receive a $50,000 grant to employ a researcher for a few months.

Or, the jackpot: if you own a company that’s about to launch a new product or service, you might get $250,000 of matched government funding to help.

The base immorality of corporate welfare is never clearer than in times of austerity.

Chris Berg writing in The Age.

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40 Responses to Corporate welfare outrage

  1. entropy

    The same tosspots who think nudge economics is a sensible policy would advocate this kind of squandering. All that ends up happening is the business works out that a great way to offset costs is to get the government to hand over Other Peoples’ Money. Easier than going to the effort of making things people discover they would like to buy.

  2. I sorta like this. How do I get onto the gravy train?

  3. candy

    There does seem a difference between one-off incentives and paying Holden and Ford yearly to keep going?

  4. Pete of Perth

    Where is the outrage over solar/wind welfare?

  5. Des Deskperson

    One can’t help wondering whether the first two initiatives are de facto termination sweeteners/job creation schemes for retrenched APS public servants.

    For $20,000, a firm isn’t going to be able to get anyone who is very good for very long, but it could provide a bit of a monetary boost for a retrenched former EL1 from HR.

  6. .

    Brilliant article by Berg.

    This madness has to end. Abbott won’t budge on the tax hike but carries on with this nonsense?

    Hopefully Senators-elect Bob Day (FFP) and David Leyonhjelm (LDP) will start stonewalling spending such as this.

  7. entropy

    Candy, they are supposed to be one offs, but it is very habit forming. The extreme is as you say, the car industry or I would add indigenous business enterprises. Look at Hope Vale bananas.

    The experience is that they get this one off grant say, local construction of the Holden Cruze, or the establishment of a banana plantation to proved local employment to fund start up, then before you know it they are back for more. A further ‘only one more’ contribution to help overcome an unforeseen circumstance, only encourages more unforeseen circumstances to magically appear.
    Meanwhile the unsubsidised somehow manage to avoid these unforeseen circumstances in the first place and don’t need constant top ups of OPM.

    It’s human nature. You try to make money the easiest way possible. And if it is relatively easy to grab grants, that’s what you do. The consequence is the business ends up getting geared around accessing grants rather than producing desirable products as efficiently as possible.

  8. john of dandenong

    Spot on Pete of Perth

  9. Dr.Sir Fred Lenin

    I cannot see this culture ending,All politicians and public servants ,the law trade and academics are really on welfare pf a sort,I mean ,do they Produce anything ? Or provide a service we cannot do without.

  10. Phillip

    Used to get an Export Market Development Grant years ago but nothing since. Maybe I should go for this to get some of my tax money back.

  11. John Comnenus

    The government wouldn’t need to help themselves to so much of our money if they would stop trying to give it to people who shouldn’t need it.

  12. entropy

    I can’t see this practice ending. It creates incredible loyalty to the politicians who advocate it, let alone actually implement grants.

    Look at Katter. Never met a potential handout of OPM he didn’t like. Even for the greens, as long as it got offset by another for his mates.

  13. .

    John Stossel profiles The Kronies and interviews Papola:

    https://www.youtube.com/watch?v=OuQ6uctK_Y4

  14. H B Bear

    Got to give Sloppy Joe some credit for getting Howard and Heffernan’s mate Dick Honan and Manildra off the taxpayer’s tit after years and years. Still a bloody long way to go though.

  15. Look at Hope Vale bananas

    How to look at them? There’s nothing left.

  16. MartinG

    Tony Abbott is fond of an Abraham Lincoln quote: “Government should do for people what they can’t do for themselves and no more.”

    Tony Abbott is a two faced christian socialist. A lying bag of shit.

  17. Tel

    You are linking to the Age, and Berg does not provide any references, so I’d first want verification that this is real. I’ll point out that there has been no “times of Austerity” for the Commonwealth… spending is up every year, public pay packets have gone up for all the decision makers as well. Nothing even remotely similar to “austerity”. The fact that he got this bit wrong, makes me worry about the rest of it.

    After verifying, if our government really is offering random handouts, then they are idiots and Berg is right for once.

  18. Adam

    If there is one single group I’d like to see receive government assistance it would be entrepreneurs. Everything in your house right now was produced by entrepreneurs. They are the ultimate drivers of employment and the wealth of an economy. They should be encouraged and rewarded at every opportunity.

    Yes, Chris Berg, entrepreneurs take risks. But it takes a lot of them to fail for one to succeed. So why shouldn’t they get some assistance? Because they might lose some precious minutes filling out some forms? Is that all you’ve got in that bloated argument of yours? Keep bleating on about the poor young people losing their welfare, when it’s entrepreneurs who are their only realistic hope of getting a job.

  19. .

    So why shouldn’t they get some assistance?

    We don’t want it.

    It makes our job harder.

  20. Gab

    If you own a business that’s more than three years old, has good turnover, and operates in any one of 14 favoured sectors, you’ll be eligible for $20,000 of taxpayers’ money to hire management consultants.

    Better, you could receive a $50,000 grant to employ a researcher for a few months.

    Or, the jackpot: if you own a company that’s about to launch a new product or service, you might get $250,000 of matched government funding to help.

    The problem being that certain businesses will be given the grant but others will miss out – even those in the same category, i.e a prospective competitor – depending on what flavour of the month some government bureaucrat decides is worthy of the taxpayer’s money.

    Rather than handing out other people’s money to a select few, it would be better if the government made it easier for entrepreneurs to start-up a business or expand its existing one. Such as removing all the tapes (green, red, blue black whatever) which are proving to be costly and time-consuming barriers to entry/expansion/diversification.

  21. MartinG

    Tel
    #1355808, posted on June 22, 2014 at 2:56 pm

    You are linking to the Age, and Berg does not provide any references,~

    Aren’t we supposed to be going through a period of “austerity”? I’ll grant that it’s austerity for thee and me but not for them. So what is it you find wrong with my observation that “Tony Abbott is a two faced christian socialist. A lying bag of shit.”

    Surely it’s self evident. Please don’t make me run through a list of all his treachery. At first I thought his PPL scheme was a piece of foolishness designed to bolster his female vote but his dogged defence of the indefensible is evidence of a man with a missionary zeal to impose public employee wages and conditions on private industry.

    So I say again. Tony Abbott is a two faced christian socialist. And lying bag of shit.

  22. Tel

    MartinG, I wasn’t specifically replying to you, I was talking about the article as whole. Sorry, sometime’s it isn’t clear in this format. When it comes to any article in the Age without rock solid references being able to get facts right on economic issues, I would be saying: “trust, but verify”.

    So what is it you find wrong with my observation that “Tony Abbott is a two faced christian socialist. A lying bag of shit.”

    Now that you ask, you are correct that his is two faced, you are also correct that his is Christian, and he has shown that he cannot be trusted to keep promises. Abbott also seems to be a fan of big government, but then most Australians are, and Abbott is doing his job representing those people. Perhaps, “lying bag of shit” is a little unfair when you look at it in comparison to the other options we have available.

    As for “austerity”, what does it mean? The government has not reduced spending, so explain “austerity” to me in some concrete terms.

  23. Tel

    Yes, Chris Berg, entrepreneurs take risks. But it takes a lot of them to fail for one to succeed. So why shouldn’t they get some assistance?

    Exactly for the reason you gave, risk will always be a part of the process so it is right and good that many entrepreneurs should fail. Attempting to prevent this just breaks things. Government would not know which one to give assistance to anyhow, and some bright spark would pretty quickly game the system.

  24. The Pugilist

    Just a quick point. The government is creating a new programme worth around $500 million over four years but is funding it by cutting a range of programmes worth more than a billion over the same period. Industry assistance is being CUT overall. This is a good thing. Would it be better if they were getting rid of this kind of industry assistance altogether? Most likely, yes, but credit where it’s due. Don’t let the perfect be the enemy of the good. See Entrepreneurs’ Infrastructure Programme – establishment

  25. MartinG

    Tel
    #1355847, posted on June 22, 2014 at 4:07 pm

    MartinG, I wasn’t specifically replying to you,

    Sorry, I made a wrong assumption. No harm done.

    As for “austerity”, what does it mean? The government has not reduced spending, so explain “austerity” to me in some concrete terms.

    That’s the whole point of my scathing assessment of Tony Abbott. Economic austerity is when all levels of public sector spending are cut or rationalized. There are limits to what can be done but none the less the burden of deficit reduction falls on the public sector.

    Tony Abbott has placed the burden of deficit reduction on private spending and corporate tax, this is the classic response of a socialist and doomed to make the deficit worse. Working from memory I think you will find the last three bills passed by the senate were backed by both the greens and labor and all three increased taxation or spending in some way.

  26. Tel

    Pugilist: so from reading your reference, we have:

    Australian Industry Participation; Commercialisation Australia; Enterprise Solutions; Innovation Investment Fund; Industry Innovation Councils; Enterprise Connect; Industry Innovation Precincts; and Textile, Clothing and Footwear Small Business and Building Innovative Capability (cost of $845.6 million).

    …replaced by…

    Entrepreneurs’ Infrastructure Programme (cost of $484.2 million).

    But that doesn’t give the same overall impression as what Chris Berg was saying. Journalism is about making things clear to the reader, yeah?

  27. MartinG

    The Pugilist
    #1355868, posted on June 22, 2014 at 4:36 pm

    Don’t let the perfect be the enemy of the good.

    Thanks for the link. There’s some heavy reading there.

  28. Crossie

    Or, the jackpot: if you own a company that’s about to launch a new product or service, you might get $250,000 of matched government funding to help.

    Or if you’re a national broadcaster you will get $1 000 000 000+ Per year to rubbish the conservative government, insult its members and sneer at half the country.

  29. The Pugilist

    Indeed Tel. Don’t get me wrong, I’d rather see it all gone, but this is still a positive step. Funds are being CUT from the industry department.

  30. sabrina

    Since the election, there is no more budget emergency, so this selective welfare is justified!!

  31. nerblnob

    I do some business with Australian start ups. They would far prefer a reduction in red tape, energy costs and restrictive employment rules than a one off grant. But, if that’s all that’s going, they’d take it. It doesn’t do anything to help Australia’s competitiveness though.

  32. AP

    I have a company that’s about to launch a new product: offering packaged advice to other companies assisting them to claim their $20,000 or $50,000 grant, do I qualify for $250k?

  33. wreckage

    Just a minute there! Before you offer that advice, please consult with me so that I can advise you to give advice, and collect my $20,000.

    So, if the more detailed link… the link with any actual details rather than hyperventilation… is correct, industry slop is being cut by close to half. Hardly a bloody failure in my book. With a bit of luck this will be repeated next budget as well. Good times, as far as I am concerned.

  34. wreckage

    They would far prefer a reduction in red tape, energy costs and restrictive employment rules than a one off grant.

    Bloody wouldn’t they, just. I’m trying to do some cottage industry and the energy costs for running some very modest equipment are horrific. All of this crap just divides the nation into people with enough scale to get past the shit and probably start lapping up some delicious crony cream, and everyone else, who get stuck in the working class.

    Then you get class rigidity, then you get socialism, then that makes the rigidity WORSE, and then you’re fucked.

  35. nerblnob

    This plaintive letter to The Economist (you may fart in their general direction) touches a lot of familar points:

    Doing business in Mexico

    SIR – The reason why so many small businesses in Mexico remain “under the radar” is that it is impossible to comply with the multitude of incompatible demands from the different arms of the Mexican government (“The Peter Pan syndrome”, May 17th). A small restaurant, for example, requires around 28 different permissions, licences or payments to operate. Obtaining each one can take weeks and multiple trips to government offices, dealing with staff who act like their job is to make the task as difficult as possible. Many permissions can only be secured by hiring authorised “specialists”, which only larger companies can afford. Most have to be renewed every year.

    A business can then expect to receive several government inspections each year, each one of which eats up productive hours. All this leaves precious little time and energy for activities that actually add value to the business’s customers and gives them a chance of growing.

    It is not much different in Australia these days, except the bureaucrats are not quite so obstructive, but the temptation is there.

  36. nerblnob

    One big problem is that the general public believe anyone who wants a reduction on regulation is a Big Business baddie trying to avoid some notional responsibility or commit some dreadful crime against The Environment or Workers Rights.

    They really have no idea what an evil, costly, counter-productive burden all this shit is, how it actually favours Big Business above others, and how it’s often the main thing that differentiates a stagnant third world kleptocracy from a vibrant growing economy.

  37. MT Isa Miner

    wreckage

    #1356250, posted on June 22, 2014 at 10:30 pm

    They would far prefer a reduction in red tape, energy costs and restrictive employment rules than a one off grant.

    Bloody wouldn’t they, just. I’m trying to do some cottage industry and the energy costs for running some very modest equipment are horrific. All of this crap just divides the nation into people with enough scale to get past the shit and probably start lapping up some delicious crony cream, and everyone else, who get stuck in the working class.

    Then you get class rigidity, then you get socialism, then that makes the rigidity WORSE, and then you’re fucked.

    Right Wreckage., that’s the long run view. But even before that : we used to be a country of tinkerers and weldittogetherandseewhathappens and lots of good stuff came from that. If it was easy to set up a small business we’d have more of them and that is where the employment comes from.

  38. nerblnob

    If it was easy to set up a small business we’d have more of them and that is where the employment comes from.

    Occasionally that message gets through to politicians but they try to fix it with handouts (easy, popular) instead of red tape removal (hard, compliance bureaucrats might become redundant).

  39. Tel

    I have a company that’s about to launch a new product: offering packaged advice to other companies assisting them to claim their $20,000 or $50,000 grant, do I qualify for $250k?

    LOL, but yeah, that’s exactly right. Do you want a web interface with that? I’m cheap. Give me a heads up when the cash comes in.

    How do you like the slogan: “More stable than HealthCare dot gov” ?

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