Apologies to whoever said perception is 90 per cent of reality but it describes the budget better than I could.
In fact, it was more 99 per cent reality and 1 per cent fact and that's not the criticism it sounds.
On the contrary, it's had an extraordinary impact on the sharemarket and, perhaps unfortunately, the dollar. Who would have thought Joe Hockey could bring down a budget that was a bit too successful?
All right, early days yet. And the dollar's jump over US80¢ has everything to do with the US dollar weakening because the long expected rate rise in the US keeps getting delayed, at least in the market's view.
The budget might reach into every nook and cranny of our national life but don't tell me it influences the US dollar.
It takes a central banker to know another one and our Reserve Bank predicts the Fed will still hike rates before Christmas, so that's that. Whether it will cop a US80c dollar for another six months, though, only time will tell.
Where was I? Oh yes, the post-budget share prices of the big retailers such as Harvey Norman, JB HiFi and even, gasp, Myer suggest shareholders are more enthusiastic than shoppers at the moment.
So why is the budget all perception? Because the centrepiece was the small business tax cuts which, unusual for an item of revenue lost, have been oversold.
You'll recall they applied to businesses with sales below $2 million and consisted of a 1.5 per cent cut to 28.5 per cent on profits and up to $1000 for unincorporated businesses (both starting on July 1), an upfront write-off of any assets bought costing less than $20,000 (with no cap on how many there can be)
The $5.5 billion package that Hockey goes on about is the cost over four years. For the coming year the tax breaks for Tony's tradies cost a modest $500 million. I know company tax applies to the previous year, and there's barely two months of this one to go – my, time flies – but that's the problem.
There's a long wait to next year's tax return to get the benefit and even the $20,000 won't count until this year's return is filed. By the way, a business depreciation pool can also be immediately deducted if the balance is under $20,000.
In 2016-17 the tax breaks will cost $1.75 billion, still barely a drop in the budget ocean.
Even if Tony's tradies do their thing, by any stretch of the imagination the rest of the budget is pretty bleak for retailers.
The childcare subsidies go straight to the childcare centre so I'm not sure they'll generate a shopping spree. Maybe pensioners who are sitting above the lowered top threshold will hit the shops running down their assets before they're caught in two years. I guess there'll be a lot of cruises.
But the budget forecasts lacklustre wage and job growth in the coming year, which can't be good for retailers.
Twitter@moneypotts
