Labor’s policy gift to Coalition
The government can use the opposition’s tax agenda as an election-winning plank
The Coalition has done its best to make itself unelectable. But voters don’t just ask whether the government deserves to lose, they also ask if the opposition deserves to win — and a good look at the Labor Party’s policies should make it even less electable than today’s government.
The Liberal Party needs voters to be thinking about their immediate economic self-interest rather than whether or not Malcolm Turnbull should still be prime minister.
The challenge for Scott Morrison and his team is to shift the focus off personalities and back on to policy, because that would finally be playing to the Liberals’ strength and Labor’s weakness.
The Libs should be focused on how Labor will put people-smugglers back in business, send power bills through the roof, shut heavy industry, give the country’s most thuggish union a veto over policy, and take thousands of dollars out of ordinary people’s pockets.
These are the inevitable consequences of shutting offshore detention, the 50 per cent renewable energy target and the union-inspired, worse-than-Gillard workplace relations policy.
Above all, as a potential election winner, there’s an opening for a strong campaign against all of Labor’s new taxes.
There’s the higher top rate of income tax, the crackdown on trusts, the negative gearing changes that will make your house worth less and your rent cost more, and then, Bill Shorten’s biggest single gift to his political opponents, the end of franking credit rebates that will take thousands of dollars out of retirees’ pockets. Properly explained and exploited, this policy should mean not one retiree who’s not an old-age pensioner would vote Labor.
Before 1987, companies paid tax on their profits and company shareholders subsequently paid tax on any dividends that were paid out of those after-tax profits. In other words, company profits were double-taxed: once when they were earned and again when they were distributed.
To encourage investment, the Hawke-Keating government introduced so-called franking credits so shareholders could deduct from their personal tax liability any tax that already had been paid on the shares they owned. This helped shareholders with taxable income but not those with little or no income against which these credits could be deducted.
So the Howard government extended the principle by paying franking credit rebates to low income shareholders, typically pensioners or retirees, whose personal tax was less than the franking credits on their shares. This is what Labor now wants to reverse.
Treasurer Josh Frydenberg has excelled at getting opinion pieces into major newspapers attacking Labor’s “retiree tax”.
He’s pointed out that 900,000 self-funded retirees with shares will lose, on average, $2200 a year; and that 200,000 self-managed super funds that have invested in Australian companies will lose, on average, $12,000 a year because they don’t pay enough tax to gain the full benefit of franking credits on the shares they hold.
The trouble is most voters don’t read these articles, so Frydenberg needs to get the message directly to everyone affected by Labor’s $54 billion raid on thrift. Looking to the year ahead, just about every accountant and financial adviser in the country will be warning their newsletter clients about Labor’s potential hit to their income. The question for the Coalition is whether it’s too exhausted or punch-drunk to fully capitalise on it.
Ross Fitzgerald is emeritus professor of history and politics at Griffith University.
The Australian January 7, 2019, p 10.
Learn from the past
Ross Fitzgerald clearly described the appalling consequences that would beset the nation should a Shorten-led government be elected (“Labor’s policy gift to Coalition”, 7/1). Malcolm Turnbull was often urged to carry the fight up to Labor.
He failed, and the result was a loss of 15 seats and almost a loss of government. I hope the Coalition has learned from Turnbull’s failures and will now focus on Labor’s detrimental policies, shift focus from Coalition personalities and concentrate on government success and the sound policies being implemented, and to finally accentuate its strengths.
N. Bailey, Nicholls, ACT
Ross Fitzgerald’s (“Labor’s policy gift to Coalition”, 7/1) call for the Morrison Coalition to seek victory by attacking the Labor Party’s policies misses a key point: the Morrison government has yet to provide voters with its own vision for Australia’s future. Simply attacking Labor is not enough.
Peter Smith, Lake Illawarra, NSW
The Australian, January 8, 2019 , p 11