To win the election, it's not just about getting the policies right, but bedding down the key priorities and Bill Shorten delivered in spades last night. Former Federal MP Craig Thomson goes behind the policy battlelines.
IN POLITICS, it is always about priorities. Whilst both the left and the right rarely concede publicly that an opponent’s policy has merit and they prefer to attack the policy as being unequal, ineffective or not achieving desired result, it is often not that a policy proposal is wrong. It's just a judgment call on whether it should be the Government’s priority.
Sometimes when governments are out rightly stealing a policy and than there is no acknowledgment at all e.g. Labors position on cigarettes, multinational tax avoidance and super for the well off, to name a few.
This is not the worst idea for a government as it undermines the Opposition’s points of difference but eventually they will get caught out if all the good ideas come from the other side.
There is no greater time for determining policy priorities than at a budget and in an election and right now we have the double whammy.
So let's look at some of the key policies of the budget and assess them firstly in terms of merit but more importantly in terms of priority.
The key measures on the revenue raising side in this budget appear to be bipartisan. That is raising the prices of cigarettes, taxing multinationals a little bit more fairly and revenue for changes to superannuation for the rich. It is, of course, no surprise that this is bipartisan as the Government has largely adopted or indeed built upon the already announced oppositions position on these issues. So that must be a tick for the Government.
Multinational tax crackdown bunkum! $4billion is natural dividend of putting back 1000 of the 4000 sacked ATO staff https://t.co/qfSxRYVxVN— Sandi Keane (@Jarrapin) May 5, 2016
However, is hardly terribly innovative or raising enough revenue that will redress the budget deficit or the spending desires of the community. That means we need to look to savings and spending priorities.
The Government has made small and middle size business and, indeed, over 10 years large business a budget priority. The rationale being that less tax paid by business, the more people are employed. Indeed, this has some economic basis supporting this proposition albeit the strongest motive for business is not job creation but profit maximisation and, therefore, undoubtedly, some of those tax cuts will of course just go straight to the companies’ bottom line. But on the face of it a reasonable attempt to stimulate employment.
Tax cuts by moving the tax threshold up to $87,000 the Government argues, is an affordable tax cut to those being caught by bracket creep. Again, on the fact of it, its a reasonable proposition. It also fits with the Government mantra of being a government that wants lower taxes. Unfortunately, the reality of tax to GDP shows the Liberals are the worst offenders.
Stephen Koukoulas from The Kouk has debunked the Coalition's bafflegab that Labor is the party of “higher taxes” using the Coalition’s own December 2015 MYEFO.
In an article published last month entitled: ‘Election Facts: Which side taxes the most?’, Koukoulas trumpeted:
'... hold onto your hats, because the facts are frankly, amazing.'
Here are the Top 10 years of tax to GDP ratios since 1980-81 and the government in power at the time:
2004-05 24.3% Liberal
2000-01 24.2% Liberal
2005-06 24.2% Liberal
2002-03 24.0% Liberal
2003-04 24.0% Liberal
2006-07 23.7% Liberal
2007-08 23.7% Liberal
1986-87 23.3% Labor
1987-88 23.2% Labor
2001-02 23.2% Liberal
(Note: The Turnbull government gets an award for the next highest with the projected tax to GDP ratio of 23.1% in 2018-19).
Even more extraordinary are the facts of the 10 lowest tax to GDP ratios since 1980-81. All 10 are under Labor governments. All 10.
Here they are:
1992-93 20.0% Labor
1993-94 20.0% Labor
2010-11 20.0% Labor
2009-10 20.2% Labor
1991-92 20.7% Labor
2011-12 20.9% Labor
1983-84 21.0% Labor
1994-95 21.2% Labor
2012-13 21.5% Labor
2013-14 21.5% Labor
And the source for these numbers are the MYEFO released by Treasurer Morrison and Finance Minister Cormann in December 2015: http://www.budget.gov.au/2015-16/content/myefo/html/index.htm’
The infrastructure fund is probably welcomed by all as a good initiative if it succeeds in its aim of underwriting and kick starting much needed and often delayed infrastructure though I note the much planned and talked about east coast inland rail is still in the "planning phase".
I do expect it to be used for a bit of good old-fashioned pork barreling however in the election campaign rather than been used on a best project cost benefit analysis basis.
Neither the opposition or the Government are expecting to return the budget to surplus anytime soon although this is unclear from the erroneous government comments they are "living within our means" and " not spending what we don't have." Of course they aren't doing either otherwise there would be a surplus...that is self-evident.
Economic management is also a difficult one for this Government to win with debt and deficit significantly higher now than when elected.
So other than slogans, these issues aren't going to cut it with a more sophisticated and switched on electorate.
The difficulty for the Government is not that its centre pieces are without merit when seen in isolation, but the prioritising of these by the Government over other issues adversely effected in the budget is where the real problem for the Government lies. I am sure when we see cuts to education, health higher education, provision of dental services it gives us a real picture of the government’s priorities.
The Government seem not to be about the aspirations and indeed needs of the community but rather they are running the country like a big corporation — less tax, greater profit and services to be paid for by those that can afford them.
The Opposition should forget petty attacks on " those missing out on tax cuts" and concentrate entirely on what the priorities of this government are. It is not about the issue of a right or wrong policy but about the choice of policy. The Turnbull Government has made a serious error in believing that people will buy into the Government’s priorities as being in their interests.
The Government’s policy priorities are not necessarily without merit but whilst the community see less funding for the essential services that affect us all – health, education, dental care and higher education – it is an argument they can't win and will cost them many seats ... maybe even government.
Craig Thomson is former federal Labor and Independent MP for Dobell.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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