between bolstering political support for the Morrison government while maintaining a veneer of fiscal rectitude.Such as claiming that the massive tax breaks he’s handed out to the country’s legion of small businesses are actually designed to address one of the country’s most pressing economic problems – our dismal performance on productivity.Now, in the months leading up to this budget, Frydenberg found himself in an enviable position.
And that might inspire a prudent Treasurer to devote some of the extra tax revenue that he’s collected from the latest surge in commodity prices to reinforce the resilience of the Australian economy. He’s clearly more interested in providing massive tax breaks to small businesses – a key Coalition constituency – as an inducement to them to digitalise their operations and spend more on staff training.
But Frydenberg’s largesse to small business goes even further. He’s also allowing them a 120 per cent deduction for the cost of sending their staff to external training courses, at a cost of some $550 million to the nation’s coffers. But it’s ludicrous to claim that subsidising small businesses to update their websites or to send their staff on training courses amounts to a coherent policy that will deliver productivity improvements or increase the fundamental resilience of the economy.