It’s the blind leading the blind for the Australian economy as the May Budget changes continue to wreak havoc for small businesses.
Those making the decisions have a total lack of experience in anything other than being a political hack or career public servant and that inexperience is a massive blow to business.
From tax changes made without consultation, Treasury modelling that fails the pub test to a compromised Reserve Bank stacked with the Treasurer’s mates, Australians trying to run a business are copping it right, left and centre.
Another real world example came on Sunday, when Assistant Treasurer Daniel Mulino announced the ATO wouldn’t be taking credit card payments after July as doing so would have “very serious ramifications for the Budget”.
Apparently it’s OK to impose serious ramifications on the budgets of small businesses Australia-wide, all while running a faux listening tour with ACCI while you’ve still made up your mind anyway.
Forget the PM and Treasurer trying to take credit for the reprieve. That lie lasted four days until it was confirmed they were happy for it to cost businesses more, just not their precious ATO.
The wider situation of the Budget changes is made far worse by all of the central figures having no real world experience.
We are cursed with politicians who may have PHDs, but have never run their own businesses working alongside senior public servants with same absolute lack of real world knowledge.
None have had the experience to practically test the delusional, pie in the sky advice they are being fed and in turn regurgitate as economic gospel.
Maybe they are so blinkered that they genuinely believe they are doing a good job, even as Australia hurtles towards stagflation and drives entrepreneurship into the dust.
RBA governor Michele Bullock has only ever worked at the central bank. A Reserve Bank lifer, she presides over not only crippling interest rates but she has also played a roll in unravelling the transparent credit card surcharges.
Treasury head Jenny Wilkinson has been a public servant for more than three decades. Another institutionalised lifer, she had just one other role before joining the public service.
Then there’s Treasury’s deputy secretary for Revenue, Small Business and Law, Dianne Brown.
She’s never run a small business and her experience includes being a political chief of staff to a forgettable Labor shadow minister in Stephen Conroy.
Having helped oversee much of the Budget chaos, Ms Brown is about to take “well-earned leave” according to Ms Wilkinson.
This is the Treasury which provided advice, but can’t find the modelling for a Senate hearing, on all of the May Budget changes that have blown up in the Government’s face.
Treasury claimed the negative gearing and capital gains tax changes for residential investors wouldn’t crater the housing market and not see rents rise.
Well hello, welcome to Australia six months later when the housing market is in chaos and we’ve stopped building enough places to ease skyrocketing rents. Australians are on track to lose one trillion dollars of collective wealth.
We have a Treasury that blithely signs off on reckless spending yet models inflation as somehow coming down.
Multiple changes to trust structures, new tax minimum rates and perverse outcomes for newborns and widows have all resulted in highly embarrassing backflips by the Treasurer and the PM.
Even today neither Treasury nor the Government’s own ministers can categorically say their changes won’t hit some small businesses with a 60 per cent effective tax rate.
Accountants are modelling the advice required for businesses will be in the billions of dollars and not produce one extra ounce of economic productivity.
The problem is Treasury seems to adore big multi-national companies that largely avoid paying tax while wanting to punch down on mums and dads just trying to run a family business.
There’s pride in working for your own business. Not everyone aspires to the life of being a careerist public servant or cosseted politician.
There seems to be a collective Labor view that the answer to the question “How do you create a small business in Australia?” is “start with a bigger one”.
US president Ronald Reagan summed up the sort of thinking that sits at the heart of Treasury and this Government’s philosophy when it comes to small businesses.
“If it moves, tax it. If it’s still moving, regulate it. If it stops moving, subsidise it”.
The May Budget has been a rolling disaster of supposedly unintended consequences requiring backflip after backflip.
Business was already hurting, managing wafer thin cash flows and an endless burden of more and more complex regulation before being told in the Budget they were to blame for the Government running out of money to splash against the wall.
The gross inexperience is having real world impacts.
People are hurting and while those responsible might not see it, the reality is this Budget has smashed confidence and attacked small business like no Budget ever before.
Cameron Milner is a former Queensland Labor State secretary