Don’t fall for Labor scare campaign
CLASS warfare is lazy, cynical politics but it’s also highly effective – and that’s why opposition leader Bill Shorten has embraced it with such gusto.
The politics of envy can be a reliable vote winner for those whose ambitions outweigh their abilities. Labor will run a class-based campaign at the next federal election and it’s set to be so deeply dishonest that the bogus Mediscare campaign will look ingenuous in comparison.
It’s a stark departure from the Labor party led by Bob Hawke and Paul Keating which unashamedly promoted economic reform, deregulation and appealed to aspirational voters. Old Labor’s raft of economically liberal policies laid the foundation for 27 years of economic growth but Shorten’s Labor has abandoned those principles for cheap populism.
Shorten has vowed to roll back the majority of the Coalition’s $144 billion 10-year tax package that passed the Senate on Thursday.
It’s a bold move for the Opposition to go to an election promising to rescind legislated tax cuts. Yes Minister’s Sir Humphrey Appleby would call it courageous but Labor has been emboldened by a government that has failed to prosecute straightforward arguments. The Coalition is better at governing than politicking, although the tax package triumph may yet be the election-winning masterstroke the Turnbull government desperately needs.
That the plan got through the feral Senate intact is an enormous win for the government and credit must go to Finance Minister Mathias Cormann and Treasurer Scott Morrison, along with the PM who refused to budge when the crossbenches pushed for the package to be split.
Cormann in particular deserves praise for his leadership in the Senate; securing the support of every crossbench senator with the exception of GetUp! darling and former Labor party member Tim Storer is no small accomplishment.
The package is in three parts with stage one primarily benefitting low and middle income earners, coming into effect on July 1, while parts two and three address bracket creep and will see the removal of the 37 per cent tax bracket.
If fully implemented – and that’s a big “if” given phases two and three do not begin until 2022 and 2024 respectively with the final changes taking place in 2028 – the reforms will deliver real benefits to workers in all categories.
Those carrying the greatest tax burden will belatedly get relief as will the middle class who have been victims of bracket creep and stagnant wage growth. The cuts will eventually see 94 per cent of Australians pay no more than 32.5 per cent tax on their earnings.
But Labor has pledged to repeal the second and third stages because it gives relief to those who make the greatest contribution to government coffers.
Shorten’s efforts to set the haves and have nots against each other has seen him spouting about “accelerating inequality” and going down the path trodden by Bernie Sanders in the US and Jeremy Corbyn in the UK, although Shorten is adamant Labor’s lurch to the left is not influenced by what has happened overseas.
“I am influenced by the hundreds of thousands of conversations with people I’ve met since I’ve become leader of the Labor Party,” he said last year.
I wonder how he has time to formulate policy when engaged in “hundreds of thousands of conversations” but then again he may have got his figures wrong. Labor has a knack for doing that.
This is a party that has not returned a federal Budget surplus since the 1989-90 Budget of the Hawke-Keating government.
Last week we learned there’s a $10 billion hole in Shorten’s retiree tax policy with Treasury analysis showing a massive shortfall. Shorten continues to push claims that are utterly absurd but may appeal to low information voters who don’t look beyond the 10-second soundbite on the news.
In his budget reply, Shorten claimed a doctor on $200,000 would be on the same tax rate as a nurse on $40,000; but Treasury figures show that under the government’s plan the doctor would pay a little over $60,000 in tax, or about 30 per cent of total income, while the nurse would effectively pay only 11 per cent, just under $4500.
The unions are also pushing this dishonest line, with the ACTU putting out a statement last week claiming the tax cuts would “entrench inequality, as low income workers’ pay the price for handouts to people earning $200,000”. Isn’t it cute that the militant Left thinks being able to keep more of the money you’ve earned is considered a “handout”?
Labor is keen to push the notion that the rich don’t pay their fair share but that might be popular among socialist loving millennials but it is utter bunkum. The truth is the top 10 per cent pay about 50 per cent of the income tax collected.
Meanwhile, close to 50 per cent of households contribute no net tax as the benefits they receive from the government outstrip any tax they pay.
If the tax cuts are implemented in full, including abolishing the 37 per cent tax bracket, those earning above average incomes will continue to carry the heaviest tax burden with the top 20 per cent of taxpayers still contributing 60 per cent of all income tax collected, just as they do now.
And as Scott Morrison has pointed out, the 4 per cent of people on the highest income tax brackets pay 30 per cent of all income tax.
LABOR IS KEEN TO PUSH THE NOTION THAT THE RICH DON’T PAY THEIR FAIR SHARE BUT THAT MIGHT BE POPULAR AMONG SOCIALIST LOVING MILLENNIALS BUT IT UTTER BUNKUM.
IS