Here is one of the slides presented by Joe Hockey to the party room this week. I guess Tony and Joe feel they have to be inclusive given their near-death experience earlier in the year.
It is complete mush and tells us there will be deficits for years and years to come, notwithstanding the confected chart that shows smaller (bit still large) deficits over time.
Here is the slide that really mad me cross:
Main beneficiaries from the Budget will be families and small business•The IGR showed that our future prosperity will rely on boosting workforce participation and increasing productivity•PC Childcare Report showed that roughly 165,000 parents with children aged under-13 would like to work but are not able to•Small business employs around 4.5 million people but could create even more jobs and innovation
What a joke. Asking people whether they would work if they had childcare is about as reliable as the figures on hidden unemployment. We know that many people say they would love a job (right pay, right hours, etc) but don’t have one at the moment. The trouble is when you track these ‘hidden unemployed’ persons, they remain out of the labour force.
Quoting the figure of 165,000 is just a nonsense and in fact elsewhere in the PC report, it is noted that the vast majority of parents report are happy with their childcare and employment arrangements.
The more accurate figure – and even that is an overstatement because it assumes that the employment of others is completely unaffected – is 16,400 which is the PC estimate of the additional number of mothers that would enter the paid workforce if the proposal to overhaul childcare subsidies is implemented plus a compulsory activity test. That amounts to an additional 1.2 per cent of working mothers with young children.
The number is completely trivial when it comes to a workforce closing in on 12 million and monthly increases in employment generally much higher than 16,400.
Here’s the real test for the government: will it impose a work test on all those parents who receive childcare subsidies?
The answer is: no it will not, because the rent-seeking childcare centres would SQUEAL very loudly and the government would not like that.
And don’t be confused with the commitment of 15-hours per week for all 4 year-olds to attend pre-school – that is a completely different issue and applies to all children, whether or not they are go to a childcare centre.
As for small businesses, another group of rent-seekers:
- Two-tiered company tax schedule – oh dear
- Other tax reductions for non-incorporated businesses – oh dear
- Accelerated depreciation to create a disjunction between the real life of assets and the tax rate of depreciation – oh dear
What Joe Hockey doesn’t seem to appreciate is that while the small businesses may be the main source of job gains, they are also the main source of job losses.
Leave small businesses alone, remove the regulatory clutter and let them get on with making a buck without this wasteful spending of taxpayer money.