Comment: When 'fairness' doesn't cut it, ALP surprises with policy

Opposition Leader Bill Shorten (AAP)

A funny thing happened this week. Amidst the dross of Tony Abbott skolling a beer, or skulling, or however you want to spell it, a very small amount of policy found its way to the fore – and even more surprising, it came from the ALP.

The ALP, mindful perhaps that while no one seriously expects it to release a full suite of policies anytime soon, realises it needs to at least look like it has a suite of policies ready to release should the need arise.

It’s that line every opposition has to straddle – being an opposition which just opposes everything (a pretty easy job really, so long as you have the discipline to keep doing so even in the face of logic and consistency; Tony Abbott was the master at this) –  and also presenting yourself to the voting public as the alternate government.

Despite what the polls might say, most voters at this point in time are not really thinking about an alternate government. Most voters would not even be thinking about another election and would likely react with surprise to hear the last federal election was over a year and a half ago rather than just last year sometime.

But it’s never too early to start laying a few alternate-government foundations – nothing overly special, nothing too presumptive, and nothing too controversial, but at least something that gives an indication of where you believe your priorities lie.

Thus far the ALP’s alternate government policies have mostly been reactive to the Abbott government – thus Bill Shorten would like to make it very clear that he is not for changing Medicare or the university funding regime.

"It’s never too early to start laying a few alternate-government foundations – nothing overly special, nothing too presumptive, and nothing too controversial, but at least something that gives an indication of where you believe your priorities lie."

There have also been a few more independently framed policies. Essentially these could all be grouped under the banner of “fairness”. Mostly they are semi-subtle responses to how last year’s budget blew up in the face of Joe Hockey, Tony Abbott and any minister who was unfortunate enough to have a major policy attached to it.

But talking about fairness by itself won’t cut it, because when it comes down to brass tacks, voters want the budget to not just be fair, but also not in deficit.

The belief that a surplus is in some way an example of superior economic management has been woven very deeply into the nervous systems of voters. You can’t undo that belief from opposition. The Rudd/Gillard governments had a chance to change the budget narrative while in power after the GFC, but woefully and almost purposefully failed to do so. Thus we remain in a position where for all the talk about fairness, there remains the need to demonstrate a desire to pay for all those fair policies (and do so as well in a fair way).

And among the moves by the ALP thus far has been their going after lost company tax – for such a policy appeals in the sense that it targets not just the wealthy companies, but those who are skating around on the very thin ice of legal taxation minimisation schemes.

This week saw the ALP again look at those whom it believes could afford to pay some more tax – namely retirees on very large superannuation accounts.

"The Rudd/Gillard governments had a chance to change the budget narrative while in power after the GFC, but woefully and almost purposefully failed to do so."

The talk of taxation exemptions for superannuation has been increasing in volume over the past six months. That earnings from superannuation are tax free and that with not a great deal of skill wealthy people over 60 can avoid paying a lot of tax by contributing to their superannuation fund has come under the microscope of a number of policy think tanks and even last year’s Commission of Audit.

Given the Treasury estimates that the revenue forgone each year due to superannuation not being taxed like income is around $27.3bn, you can understand why many are thinking it is a good place to start looking at increasing Australia’s tax revenue.  

The ALP this week began its look in that direction by suggesting that super earnings above $75,000 a year be taxed at 15 per cent. As far as harsh attacks on the wealthy go, it was pretty weak. You would need to have around $1.5m in your super fund to get to that point. And given someone who was earns $90,000 a year from their super would under the ALP plan now get $87,750 – in effect paying a mere 2.5 per cent tax on their earnings – it’s clear we’re not exactly talking communism. 

The reaction from sections of the media has been quite humorous. Back in 2012 when then Treasurer Wayne Swan introduced in the Budget a measure to reduce the concessional contribution for superannuation of those earning over $300,000 from 30 per cent to 15 per cent, it was viewed as a big whack on the rich. The Australian for example led with a front page that suggested Swan and Gillard were akin to leaders of the Soviet Union.

This time round, when the ALP is suggesting lowering this concession to include those earning $250,000, the reaction has been pretty humdrum – the response has been that they really haven’t done enough, and that they also need to look at pension expenditure as well.

But the policy development didn’t end there. On ABC’s 7:30, ALP Treasury spokesperson Chris Bowen also delicately dipped his toe into the waters of negative gearing. But to avoid the wrath of boomers, he did so only in a manner in which he was very clear no one who currently is taking advantage of the system could in anyway be hurt.

It’s no surprise that the opposition isn’t being too bold on the policy front. The bolder it gets the greater the opportunity Tony Abbott and co get to shift back to the opposition mode that makes them feel so comfortable.

For all the talk of the desire for alternate policies and the wish for a policy fight, the real world of politics and media coverage intrudes. Those waiting for the ALP to release a book of policies will wait in vain. The LNP ran dead on every issue except those it wanted to talk about – the carbon tax, asylum seekers. 

We can expect the ALP to do the same.

For now – with still around 18 months to go till the next election – we will need to be content with these baby steps into potentially contentious areas of retirement incomes and people’s investments and hope the bold policy will eventually come.

Greg Jericho is an economics and politics blogger and writes for The Guardian and The Drum.

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