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We can’t afford Abbott-style scare campaigns

Fairfax mastheads are considered legacy products.

Fairfax mastheads are considered legacy products. Photo: Getty

Taking questions in Melbourne on Friday, Bill Shorten couldn’t resist a dig at News Corp journalists in one of his replies.

Mr Shorten had been asked by a reporter from The Australian whether changes to fringe benefits tax and capital gains tax were “on the table”, whether revenue from carbon pricing would help Labor close the funding gap in its current budget plans, and what he thought the future was for negative gearing tax breaks.

All of those topics are political hot potatoes, so without giving away too much Mr Shorten said he hoped The Australian would allow them to be fully debated rather than launching a “scare campaign”.

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Labor suffered just such a scare campaign over the introduction of carbon pricing in 2011 – a significant factor in the election of Tony Abbott as prime minister.

It is no coincidence that Mr Shorten chose a reporter from The Australian for his acerbic aside – that paper played a prominent role in fostering Mr Abbott’s insupportable assertion that the emissions trading scheme was a “wrecking ball” through the economy.

Other News Corp publications were worse – the Daily Telegraph took the prize with its April 2013 story ‘Carbon collapse – catastrophe as a firm fails every hour’, in which it noted that 11,000 small businesses had gone bust under carbon pricing, without mentioning that 187,000 businesses had been created in the same period.

As detailed previously, stories like that helped drive down consumer trust in those mastheads, well below the (also falling) trust levels in Fairfax papers.

Bill-Shorten

Bill Shorten: mixed messages on scare campaigns.

It will be interesting to see in coming months how those two major news publishers respond to the unfolding reform agenda of the Turnbull government.

Mr Shorten doesn’t want a scare campaign on the fringe benefits tax, capital gains tax, negative gearing or carbon pricing … but he does want one on the GST.

It’s unlikely that News Corp mastheads will oblige, but does that mean it’s Fairfax’s turn? We should all hope not.

Suddenly Australia is on the brink of significant economic reform, larger in scale than anything seen since John Howard’s introduction of the GST or Paul Keating’s introduction of enterprise bargaining and the super guarantee.

On the one hand (and despite it not yet being confirmed by the government), the move toward a higher value-added tax (the GST) seem inevitable – and could easily be made into a boon for working Australians, contrary to Labor’s pre-emptive scare campaign.

On the other hand, Labor is hinting at greater and greater in-roads into a range of productivity-sapping tax handbacks – including those Mr Shorten was asked about on Friday.

Australian newspapers

Australian media need to abandon scare campaigns on government policy. Photo: Getty

But neither of those major reforms will get up if sections of the news media take antagonistic and partisan positions on policies that most economic thinkers broadly agree on.

Mr Shorten spoke on Friday about the Australian tax system showing a ‘bell-shaped’ relationship between income levels and contributions to the tax revenue needed to run the country.

What that means is that at low-income levels, people pay little tax. The tax load grows as you move into the middle-income brackets, but then declines again for the very wealthy.

That’s a problem for which both sides of politics will present solutions: the Coalition via a GST increase offset with compensation; Labor with cuts to the generous tax-minimisation schemes offered to wealthy Australians.

I have already argued that the latter is less likely to win political support because there are simply too many people using those legal tax minimisation schemes. They would have to be slashed to balance the budget, and human nature being what it is many will find it hard to put national interest ahead of the advice they receive from their accountants.

But whether we’re discussing reining in tax breaks or raising the GST, the important thing to remember is that both are genuine economic reforms – the kind that Tony Abbott would have ripped apart from opposition, or hastily taken off the table as Prime Minister.

Mr Abbott’s political expediency on these issues was brought into clearest relief by the outgoing Treasurer Joe Hockey, who admitted in his last speech that “through a comprehensive review of the tax system I endeavoured, and failed, to keep all options on the table”. Yep, Tony took ’em off.

Well, some of the options are making a comeback and it’s incumbent on the news media to examine them on their merits.

And, of course, it’s the responsibility of audiences to spot partisan scare campaigns and file them appropriately – in the nearest rubbish bin.

Read more columns by Rob Burgess here

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