I often trip myself up, spouting strong opinions without all the facts. I suspect this is about to be one of those occasions.
Deficits don’t worry me too much (I’m too young to remember the bad-old-days of high deficits and spiraling inflation) and, as a generally optimistic, gung-ho entrepreneur, I’m all for a stimulus package (unusual times call for unusual measures). But there are a few aspects of the Federal Government’s planned stimulus package that make no sense to me.
I’m no economist, so maybe you, dear Anthillians, can help me out.
In particular, I’m a little miffed about the 30 percent rebate on the purchase of assets priced over $1,000.
It sounds smart. It will encourage spending (in theory). But let’s look at this from the perspective of an SME.
Look around you (please play along).
What items would you personally be wanting to spend over $1,000 on right now?
If you’re a very small business (perhaps a SOHO), you might consider a new laptop or PC (or Mac) for you or a staff member. Whereas you may have spent $900 on this relatively big ticket item for a small business last week, you’ll now spend $1,200 (or more).
That’s great for retailers (Go Harvey!). But, unfortunately, a third of your wad will immediately disappear offshore (Go Intel!).
What if you run a cafe, a boutique or another retail venture? What would you spend more than $1,000 on? A new espresso machine? A cash register? Once again, we’re talking about imported items.
As I cast my net wider and start to consider some of our own larger suppliers here at Anthill, I see the same trend. Our printers might wish to upgrade their German machinery. Our distributors might wish to consider some nice new European vans.
So, where does this leave the highly innovative, Australian companies? Growing businesses that are staff-poor and aren’t, necessarily, hungering for assets? Entrepreneurs who have the drive to create new products and services that they intend to export one day and bring new, foreign dollars into our local economy?
Wouldn’t it make more sense to create some sort of tax incentive for the employment (or retention) or staff? Wearing my publisher’s hat, I know that’s where the majority of my overheads go. And I also know that given an extra bit of financial wiggle room, that’s where I’d spend any extra bucks.
The term ‘Human Resources’ seems to imply that staff are assets. (Humans as a ‘resource’, like coal.) Perhaps our PM could allow SME business owners to apply a liberal interpretation of the term. If that were the case, I have plenty of ‘assets’ that I’d like to invest in right now. 😉