Small business is set to lose the benefit of a tax cuts to companies to Childcare following Shorten $3 Billion promise for families. This represents $1600 per child.

Many small business have companies and these are the drivers of the current economy. Lower taxes generally result in higher profits which are often reinvested to create more jobs. It’s likely the tax cuts will prevent the next recession. The economics of this has given way to a hand out of cash to families for Childcare. Shorten has put Childcare and job taking before job creating. Rather than create jobs he is demanding jobs. Of course those who get Childcare benefits are getting $1600 pa per child.

One must remember a similar and more expensive scheme proposed by the Abbott government never got off the ground. It can be said special rights have been put before equal rights as Childcare is more targeted to special interest and the effect of tax cuts were more universal, employers and employees.

Abbott’s scheme crashed, which would have been a disaster on small business. Only a small percentage of women would have gained, older women and women without children got nothing, we await the Shorten Childcare fate. The election will decide it then the cash has to be found as it’s not costed.

By Terry Murphy Simple Economics for general comment.