It’s hard to imagine circumstances in which the federal Labor Party could have made a greater hash of its high altitude, tax policy backflip.
The only thing they got right was to time it to coincide with the nation-stopping Tokyo Gold medal by swimming sensation Ariarne Titmus. Still, that just added to the appearance this was politics over policy for anyone paying attention.
On Monday Labor dropped a decision all close watchers of national affairs had long anticipated and already had crossed off their election bingo cards.
The third tranche of the Morrison Government’s reward-the-rich tax cuts – worth $170 billion over a decade and starting in 2024 – which Labor had already waved through would stay and those dollars in the pockets of high income earners were safe.
At the same time, other 2019 tax policies blamed at least in part for Bill Shorten’s loss would go. Labor was no longer going to remove the concessions on negative gearing of income for owners of existing investment properties or wind back the equally generous capital gains tax discount.
No wonder the Property Council and Housing Industry Association were ordering champagne (click-and-collect, no doubt).
Apart from making vanilla brand talking points about creating “certainty and stability”, Labor barely sought to defend its Gold medal capitulation.
Shadow treasurer Jim Chalmers kept talking about where the focus should be, no doubt hoping to take any focus off what Labor’s shadow cabinet had done.
The preferred focus was “the economic cost of the government failure on vaccines and quarantine and now JobKeeper” and on “what Australia looks like in the future, not in re-prosecuting their last election campaign.”
What neither Chalmers nor his leader Anthony Albanese talked about was any alternative policy response, despite the shadow cabinet having discussed other options for most of this year.
Top of the list was to leave the top tier tax cuts in place for anyone earning up to $180,000 but imposing a higher rate for higher income earners. This was going to be sold as a one-off, deficit-busting levy, but by this week there was not enough courage in Labor ranks for such a scaled back approach.
If Labor was committed to a positive platform for reform it would be looking at the yawning gap in housing affordability which its negative gearing and capital gains proposals would go some way to mitigating.
As recent polls show, housing affordability remains a hot issue for voters, even in these COVID-obsessed times – three in five Australians agree that young people have no chance of getting into the housing market.
Will Labor do something? Probably. Will it be enough? Most likely not.
This is the hard policy corner in which Labor has put itself. They were always going to be there but now is close to the worst time.
If Labor had thought this through, instead of yet again just seeking to be politically clever, they would have junked the policies on tax and associated high end concessions in the shadows of the last election loss.
Labor lost the election in May, 2019. The party received the wordy but reasonable review of that loss in early November of that year and has really done little in response since then, other than pay the document’s presence occasional lip service.
Albanese, Chalmers and the other architect of those policies that failed, former shadow treasurer Chris Bowen (who continues to be remembered for his “if you don’t like it, don’t vote for us” invitation), should have interred the lot before Christmas 2019.
This would have achieved a couple of things: Labor would have listened and acted in quick time to the public mood (beyond what the branch members might or might not think) and there would have been 18 months of clear air to work out something else to fill the resulting void.
It would have been smart politics, good strategy and prevented the inevitable from looking more political than it might otherwise have appeared.
Too much information
That needs to be considered. The closer to an election you take what is a fundamentally political decision, the more political it looks. The public do not like guided tours of sausage-making.
This used to be simple, entry level political science. Now it appears beyond the ken of our alternative government.
Of course, the fact these policies were going to be discarded was never really in question. In discussions with caucus members there wasn’t any support for junking negative gearing or dispensing with the capital gains concession, but there was a genuine mood for doing something on housing affordability.
The answer to these questions is the $10 billion, 30,000-dwelling social housing pledge which goes a long way – but not all the way – to meet what is now a decade-long unmet need. This is a very worthy policy but leaves that larger group of middle-Australia, working young families who can’t get into the housing market, any further along.
The other aspect of this week of Dervish-grade spinning by Albanese and his colleagues is its obsession with process. All explanations were mired in the process of getting to this point, how the matter was steered through the party’s formal committees and where this left Labor in the lead up to the election.
That placement in the game schema of the road to the polls was about politics not about policy. It was the process that mattered. The public see through a lot more than they used to – fed by the self serving, echo chamber news feeds of Facebook and YouTube (now the main sources of news for most people). They see the process and they hate it.
If this decision, as inevitable as it was, had been taken 21 months ago, the voters might have forgotten it ever happened.