By Denis Bright
In the traditions of outstanding Address in Reply Speeches from the Labor Party since the days of Andrew Fisher in 1909, Bill Shorten has delivered an outstanding appeal to a fractured nation with the politics of hope.
Supporting the Consumer Revolution and Save Medicare Initiatives
The Address builds on the positives in the federal LNP’s own budget with a commitment to fair wages and an extension of the federal government’s own tax offset. This will now benefit income earners to a taxable income of $48,000 with an additional $1,080 in annual take-home pay from 1 July 2019.
These changes alone will detract from the shrill appeal of cross-bench parties in the less affluent electorates in all mainland states. Labor vote cannot go higher in Tasmania without threatening the career of the left-leaning member for Denison who usually supports Labor on crucial economic issues.
Labor will oppose implementation of Phases 2 and 3 of the Federal LNP’s tax relief for higher income earners to the benefit of spending commitments in the forthcoming election campaign:
Labor has signalled it is likely to support doubling the offset, which Bill Shorten proposed in 2018 in his budget reply. But the proposal to flatten tax brackets beyond 2024 would provide a significant point of difference between the two major parties, allowing Labor to oppose high income tax cuts at the May election.
Flattening tax brackets in 2024, as proposed in the 2018 budget, and lowering the rate to 30%, as revealed on Tuesday, would contribute to a cumulative total tax cut of $1,205 a year for a person earning $50,000, $1,955 for someone earning $80,000, $3,040 for a person earning $100,000 increasing to $11,640 for those earning $200,000 or more.
Frydenberg defended the changes as a “long-term structural reform”, which would ensure that 94% of taxpayers paid no more than 30c in the dollar in tax and “incentivise and reward hard work”.
Funding accountability will be enhanced by removing the worst excesses of franking credit payments to retirees whose income from share portfolios does not exceed the current tax threshold of $18,200. The overall cost of franking credit payments has blown out to $6.6 billion. This is approximately one third of the cost of all payments to the NDIS in 2818-19:
Labor’s Fully Funded Plans for the Future
Labor extends the LNP’s commitment to end the freeze on increases in Medicare Payments to practitioners and specialists with a $2.3 billion commitment to reduce the costs of cancer treatment. Access to MRI Units to detect cancer will be increased with particular emphasis on outer-suburban and regional areas. Early diagnosis will also reduce the costs of cancer treatment and in the case of skin cancers these costs can be reduced by more adequate prevention programmes. Preventative programmes can also be extended to aspects of reproductive health to reduce the costs of STDs and abortion procedures.
The Plan for the Future will also address climate change with pragmatic carbon emission targets that can be reinforced by the installation of household batteries with appropriate subsidies to users of extensive solar units at a cost of up to $2,000 per household.
The energy initiatives will be supplemented by controls on clearing of native vegetation and planning measures to support transport-oriented development (ToD Projects) for our cities and the attraction of investment to the regions with particular emphasis on Northern Australia.
All these changes will require support staff in NDIS, aged care programmes, technical support for TOD Projects and other transformative ventures. This justifies Labor’s commitment to tertiary education with an emphasis on overcoming training deficiencies in the IT sector:
Bill Shorten will commit Labor to spend $200m on Tafe campuses and promise to almost double the number of new apprenticeship offered by the Coalition in Tuesday’s budget.
The commitments in Shorten’s budget reply on Thursday amount to $440m of new spending, including $330m to deliver 150,000 apprenticeship subsidies in areas with skills shortages.
The package builds on Shorten’s promise last year to waive fees for 100,000 Tafe students and doubles the investment in campuses from $100m to $200m.
Scott Morrison is expected to call the federal election shortly after Shorten’s reply and education is likely to be one of Labor’s strong suits because it is an area where it can offer higher social spending as a dividend for tax reform.
Labor has already promised an additional $14bn over 10 years to public schools, universal preschool access for three and four year olds, at the cost of $1.7bn, and to reverse the freeze on commonwealth grants to universities.
In Tuesday’s budget the treasurer, Josh Frydenberg, promised a $525m skills package that contained $55m of new money and redirected $463m of unspent money from the Skilling Australians Fund.
The centrepiece of the Coalition’s package is $200m to create 80,000 apprenticeships by doubling incentive payments to employers to $8,000 per placement and giving $2,000 payments to new apprentices. Labor’s policy matches the amount of those subsidies but extends them to 150,000 places.
Labor’s $200m building Tafe for the future fund will be spent to re-establish Tafe facilities in regional communities that have lost campuses or courses, build new facilities in growing areas, provide new equipment and expand course offerings.
Shorten said the budget was a “cynical pea and thimble trick” which had cut Tafe, skills and apprenticeship programs despite the fact Australia has 150,000 fewer apprentices and trainees than when Labor left government in 2013.
Labor’s Plans for the Future consolidate the LNP precedents and should be a safe bet for voters in swing seats.
Beyond Precedents: The Need for Sustainable Investment Multipliers
Short-term economic development initiatives aside on both sides of the political aisle, Australia has not come to terms with initiative to attract the right mix of investment in both public and private sectors to sustain a balanced development agenda.
The federal LNP’s plans for a consumer revolution to extend the mining boom and the property market brings too much uncertainty investment for the future in a middle ranking Australian economy which is no global financial hub like Wall Street, the City of London, Beijing or Tokyo.
The consumer revolution might bring more investment in online warehouses, tourist infrastructure and Uber food outlets, but not the balanced investment to bring consensus to a more fragmented and stressful society.
The latest RBA Chart Pack shows the extent to which new age investment based on market-forces, favours the capital cities in Eastern Australia from Brisbane and the Gold Coast to Adelaide with a preference for Sydney and Melbourne:
Mainstream politics is not yet rectifying these financial blind-spots which require a new range of commercial investment sources as recommended by the Business Council of Australia (BCA). The BCA is still too conservative to extend its vision to Asian Belt and Road Investment and Infrastructure Options which need not be unilaterally from China but from China as the vibrant financial hub of the Indo-Pacific Basin. China has been willing to repair its old disputes with Japan, Taiwan and Vietnam and turn them into trading and investment partnerships.
Ironically, this engagement with the Indo-Pacific would save Australia in billions of unproductive defence investment in favour of ports and regional investment projects across Northern Australia about which the federal LNP and populist cross-benchers have fantasized for decades.
Bill Shorten’s address in reply offers a conventional start to a better orientation with closer immediate engagement with New Zealand and the Pacific Islands on a transformation which requires an extended period of Labor Governments at federal and state levels along the Scandinavian development model which reaches beyond the nasty politics of debt and division (Matthias Cormann in The Australian 24 August 2017, pay-walled):
Finance Minister Mathias Cormann has laid down the economic gauntlet to Bill Shorten, describing Labor’s policies as akin to communist East Germany’s, in a speech to the Sydney Institute last night designed to set the philosophical and political battleground for the next election.
In one of the most direct attacks on the Opposition Leader by a Turnbull cabinet minister since last year’s election, Senator Cormann accused Mr Shorten of being an economic charlatan attempting to take Labor back to the era of socialism by committing to more than $150 billion worth of new taxes.
He accused the Opposition Leader of a shameless descent into the politics of envy used by past socialist leaders. “As he looks ahead to the next election, he has made the deliberate and cynical political judgment that enough Australians have forgotten the historical failure of socialism,” Senator Cormann said.
“The Berlin Wall came down 28 years ago, which means roughly 18 per cent of Australians enrolled to vote were born after the fall of the Berlin Wall and the failure of a system of government that destroyed the economies of eastern Europe.
“Bill Shorten now believes the politics of envy will work for him politically if not economically; that people will believe him when he pretends that the path to a better life for them is to tax their neighbours, their friends and their family members harder; to demonise aspiration and go after hard-working Australians and successful businesses.
“His rhetoric is the divisive language of haves and have-nots. It is socialist revisionism at its worst.”
Let the unproductivity of this rhetoric speak for itself as the federal LNP in 2019 adopts many of Labor’s tax package suggestions in its own consumer revolution strategies.
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