The budget certainly helps them to get moving. If a small business has an annual turnover of less than $2 million, from now until 30 June 2017 there’s an immediate tax deduction for every item purchased up to $20,000 (the threshold used to be $1000). Cars and vans, kitchens, machinery, computers... anything under $20,000 bought for that business is instantly 100% tax deductible. There is more: the company tax for these businesses is cut from 30% to 28.5% - the lowest small business tax rate in more than 50 years - and there’s a fringe benefits tax discount on mobile electronics. All in all, it’s a $5 billion boost to GDP over two years. Quite an adrenaline hit for the economy.
This is the opposite of ‘trickle-down economics’ – the idea that economic benefits provided to big businesses and upper income levels will indirectly benefit poorer members of society when the resources ‘trickle down’ and so benefit all. It’s an idea that is now widely discredited in international economic circles.
The Treasurer expressed his rationale very clearly in his budget speech:
Our future growth will come from growing small business into big business.Every big company in the world started small.Every big idea in the world came from just one person, or a handful of people working together.That is why tonight, I am announcing a package of measures that will make a genuine and permanent difference to small business in Australia.
It’s a good rationale, and it’s clear that it will have a genuinely positive impact.
So I wonder why this same rationale is not part of the government’s approach to stimulating the arts. The distribution of resources seems to be away from the ‘small businesses’ of the arts and more towards the top end. In fact, its approach to the arts is closer to the debunked ‘trickle-down’ approach.
Details are still emerging, but we know these things for sure:
- There will be no reduction in the Australia Council’s funding to the 29 major performing arts companies – these are the ‘big businesses’ of the arts. In 2013-14, the Australia Council gave $102 million of its $199 million grant budget to these organisations.
- The Australia Council must find $7.3m worth of ‘efficiencies’ over four years. The budget papers say explicitly that ‘these savings will be met through reduced funding to the ArtStart, Capacity Building and Artists in Residence programmes’ - programs very much about emerging artists and the ‘small business’ end of things.
- A new, Minister-led National Programme for Excellence in the Arts will be established, taking three core programs from the Australia Council - Visions of Australia, Festivals Australia and the Major Festivals Initiative. $110m will be redirected over four years from the Australia Council to this new body.
So, some questions arise.