Softening us for more waste on childcare and small business

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.

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22 Responses to Softening us for more waste on childcare and small business

  1. goatjam

    Joe Hockey is completely out of his depth and the entire LNP is a an ongoing national tragedy whose failures and incompetence we will all be paying for for years to come.

    Good grief they are a disappointing bunch of clowns.

  2. Entropy

    The thing that gets me is how hopeless treasury must be at explaining why these things are a bad idea. It must mean:
    1: hockey doesn’t listen;
    2: treasury is now so inbred with generational public servants that it doesn’t understand how the world actually works;
    3: treasury is infested with fifth columnists determined to end the Abbott/ Hockey regime;
    4: Hockey is very stupid.

    Of course, there is also ‘all of the above’.

  3. H B Bear

    Sloppy Joe is a stinking albatross around the neck of the already malodorous Abbott. Literally the only things these guys have in their favour is that they are not Labor.

  4. Infidel Tiger

    Hockey has had half his stomach removed and still is morbidly obese.

    Good luck getting him to trim government fat.

  5. Senile Old Guy

    Joe Hockey is completely out of his depth and the entire LNP is a an ongoing national tragedy whose failures and incompetence we will all be paying for for years to come. Good grief they are a disappointing bunch of clowns.

    +1

    I dread reading the news, or checking the Cat, for fear of what new piece of stupidity they are going to spring on us. Their decline started with the first budget and is only appearing to get worse in the run up to the next.

  6. Alexis

    Sloppy Joe is a stinking albatross around the neck of the already malodorous Abbott. Literally the only things these guys have in their favour is that they are not Labor.

    Labor were cheaper for me.

  7. .

    Childcare is absurd.

    We have to subsidise people for whom it does not make sense to work, to work…

    Individually and in aggregate we would all be better off without the subsidies.

    The subsidies come about for three main reasons: 1. High real property prices and rents, 2. High personal taxation rates and 3. Regulaton which forces childcare prices up to unbelievable levels.

    The cause of 1. is largely high taxes along with zoning and land release, making a household hard to manage on one income as disposable income is whittled away by rents and mortgages for no real economic value.

    Deal with 1.-3. and abolish the subsidy and childcare would not only be cheaper, but we’d be making rational decisions.

  8. MACK1

    Of course plenty of people would like well-paid interesting jobs on flexible hours with high quality childcare paid for with Other People’s Money. I’d also like a subsidised overseas holiday and subsidies for a new car, boat, golf clubs and concert tickets. Just come and ask Joe, and I’ll tell you what I’d like if you’re handing out free stuff. And I’ll tell my friends.

  9. H B Bear

    The change in female labour force participation rate through $9bn in child care subsidies make the Australian car manufacturing jobs look cheap by comparison.

  10. Roger

    What dot said.

    And another thing – at a time when communication is so easy, why not encourage more mothers to work from home?

  11. Fibro

    Problem easily solved on Childcare, but LNP won’t have the balls.

    Make it a tax deduction. You work, you get it back. You don’t work…..why should anybody else pay to mind your child?

  12. Empire

    And another thing – at a time when communication is so easy, why not encourage more mothers to work from home?

    Many do Roger. They multi task 20 odd hours of work while keeping an eye on the kids, from home. Win-win.

    There is a big problem with this though. It is very difficult (and expensive) for unions to recruit members from 1 employee work sites. It is also difficult to regulate the work of these people, especially those operating under an ABN.

    It may be good for the individual and good for the nation, but it sure aint good for the racketeers or the cantocracy.

  13. Empire

    Why the obsession with female workforce participation?

    How is this metric an indicator for anything of relevance to the health and prosperity of the nation?

  14. mundi

    I still don’t understand where all the childcare money goes. I pay $100 per day per child unsubsidised. There are 8 children per staff member. That is $208,000 per year. Meanwhile the staff member is getting $47,000. Where the fuck does the rest of the money go?

    Read reports like this: http://www.natsem.canberra.edu.au/storage/AMP_NATSEM_35.pdf and you see how they constantly mention higher prices, yet never once say why they are occurring. They never give a break down of where the money goes.

  15. mundi

    I also find it interesting that’s its 1 staff per 4 kids under two, 1 per 6 under 4, 1 per 8 under 5. Yet when you move up to each group, the price drops by usually only 3 or 4%. This suggests the overwhelming majority of the cost is not for the actual labor, probably for all the regulatory compliance bull crap.

  16. Infidel Tiger

    Why the obsession with female workforce participation?

    Unless there has been a rapid expansion in strip clubs, I can’t think of any reason.

  17. Ellen of Tasmania

    What dot said.

    Yep. And all this redistribution of wealth (taxes subsidising childcare) is pushing people into the choice the government wants them to make – ie. women in the workforce. Nanny state nudging at its worst.

    It’s not good for children, it’s not good for families and it’s not good for society.

  18. Yohan

    Leave small businesses alone, remove the regulatory clutter and let them get on with making a buck without this wasteful spending of taxpayer money.

    Abbott/Hockey were even yesterday still repeating the Keynesian mantra that they ‘will not cut the budget at the expense of economic growth’.

    Translated into English, this means industry policy and welfare packages are seen by them as the path to economic growth, not de-regulating and letting the free market work as Judith suggests.

  19. Sally Moore

    Hear, hear Judith. And I am a small business owner. I am sick of the government treating me like I am some kind of mentally deficient or disabled person needing “help”, like they want to come and hold my hand. Erk! Let’em kiss baby’s bums. They just need to get off my back and let me get on with it. Same thing applies to big business.

    And bugger female workforce participation. I am not a slave to be dictated to be ordered to work. There’s nothing I would love more than to make a big pile of money, enough to stop work and live on investments and have fun for a while skiing, sailing and maybe studying Austrian economics and public choice theory.

  20. Pusnip

    The sooner they swap Malcolm in for Tony and Sloppy Joe, the sooner well get some rational, small government policies.

  21. notafan

    Oh yeah messing with small business depreciation, again.
    Most micro businesses have a car and a computer and even if they dohave more depreciating assets changing tax timing, big deal.
    Id like less reregulation please eg why do we have to have an abn and separate business name registration?

  22. Yohan

    The sooner they swap Malcolm in for Tony and Sloppy Joe, the sooner well get some rational, small government policies.

    Malcolm is looking a better choice by the day, what a sad reflection on the Liberal party.

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