Paul Keating’s claim that it was Bill Shorten’s failure to understand the middle class that lost Labor the ‘unloseable’ election has been rubbished by party stalwarts.
Mr Keating’s intervention has raised eyebrows given his public and private urging of Mr Shorten to embrace franking credit reforms, which became known as the ‘retiree tax’.
The former prime minister did not criticise those reforms in his remarks, which follow his public endorsement in a joint statement with Bob Hawke before his death.
But he did suggest Labor should have devoted more of the proceeds to tax cuts, not new spending.
Labor frontbenchers past and present say Mr Keating’s remarks are wrong because it was the failure to secure a greater number of working-class voters in Queensland and Western Australia that was the problem, not the middle class.
Labor Senator Kim Carr told The New Daily the idea that Labor’s policies were rejected by the middle class is not supported by the data.
“I really admire Paul Keating, enormously. But I think statistically the evidence is against him,” Senator Carr said.
“The Labor Party’s problem was that we were not able to connect to blue-collar communities in sufficient numbers, in Queensland and Western Australia.
“The Labor Party had committed to important changes in education, health, and housing. Our messaging was wrong, not the policy. On climate change, I think we failed to understand just how deep the anxieties about the future for working-class communities.”
Mr Keating told the ABC’s 7.30 on Tuesday it was Mr Shorten’s failure to understand the middle class that was the problem.
“If you’re talking about the Labor Party and why it lost the election, it failed to understand the middle-class economy that Bob Hawke and I created for Australia,” he said.
“And so much of the Labor Party’s policies were devoted to the bottom end of the workforce and the community paid for it by cuts in tax expenditures.”
Rather than devote the proceeds of the ‘retiree’ tax revenue to greater expenditure on health and education, Mr Keating suggested a better plan would be to devote the money to tax cuts, including reducing the top marginal tax rate to 39 per cent.
“If the cuts in tax expenditures had been a ploy, it would have been tax reform and a much more successful outcome, but the Labor Party was increasing the top rate of tax from 45 per cent to 47 per cent which, of course, you know, in public, I opposed.
“The top marginal rate in Australia shouldn’t be a jot over 39 per cent.”
The former PM’s remarks have opened up a split between Mr Shorten, Mr Keating and his protege Chris Bowen.
“The problem with all of that is the middle class voted for us. It was the working class that was the problem. The swings were not in those areas. Those areas held. I mean, all the data is there,” a senior Labor source said.
Mr Shorten declined to comment on Mr Keating’s remarks, but a supporter highlighted Mr Keating’s election record was not stellar.
“Keating got us a two-party-preferred vote of 46.37 in 1996. The Coalition primary was nearly 48 per cent in 1996. Just saying,” he said.
Mr Shorten secured a two-party-preferred result of 48 per cent at the 2019 election.