Just when the thirtieth consecutive Newspoll loss for the Turnbull government is looming, and it looks ‘Goodnight Irene’ for Malcolm Turnbull and the Coalition, along comes Bill Shorten and his shadow Treasurer, Chris ‘I want Bill’s job’ Bowen.
Labor’s Tuesday announcement of sweeping tax changes, its centrepiece the changing of dividend imputation rules to snatch excess tax credits from millions of Australian shareholders contributing to their own retirements, is an unexpected lifeline for a struggling government. Resorting again to class-war rhetoric, Labor is playing up its tax wheeze hitting ‘high-wealth shareholders’, the Real Housewives of Point Piper and Toorak allegedly living the high life on ill-gotten gains while poor widows starve and the ill go untreated.
‘Today the Labor party does what we do best: big, bold economic reform’, crowed Mr Bowen. ‘This is exactly what Labor should be doing. It fits perfectly within the ethos of the party’, wrote an admiring Peter Van Onselen in the Australian. The object of their satisfaction is the $59 billion in revenue this tax grab’s estimated to bring in over the next decade, and the formidable war chest it offers an opposition confident of shifting to the government benches before long.
Mr Shorten’s real targets, however, are not large superannuation funds, and certainly not those providing rivers of gold for unions and gravy train directorships for union leaders – industry super funds (those ridiculously expensive TV ads where people make odd-shaped logos with their hands). Industry sources think these big beasties will barely be affected, if at all. No, this Bowen therapy is aimed squarely at Self-Managed Super Funds, the principal retirement savings vehicles of millions of ordinary working and middle-class Australians: tradies, small business owners and sole traders as well as high-end doctors, lawyers and listed company CEOs.
According to Labor, SMSFs are a rolled-gold rip-off for the rich. To their users, however, they’re a key to maintaining a reasonable standard of living in retirement after a lifetime of contributing to their families and the community, without having to fall back on the aged pension, and otherwise minimising their calls on the taxpayer in their golden years.
Many would once have been called ‘Howard’s battlers’, having already dutifully answered then Treasurer Paul Keating’s 1990s call for those who can to make reasonable provision for their own needs. Indeed, many of them live in the very marginal suburban electorates that Mr Shorten still needs in order to capture the Treasury benches.
Yet instead of taking SMSF small investors to its socialistic, what’s-yours-is-mine heart, Labor hates the real generators of wealth in this country: the Australian middle class. Messrs Shorten and Bowen are convinced that they can coast their way to electoral victory by continuing to play the mug politics of envy that almost got them there in 2016. Their smug complacency attacks the prudence of the very group whose support will be electorally decisive, and for whom 28 consecutive Newspolls show their despair with Team Turnbull’s direction – or lack thereof.
And it’s not just voters with SMSFs who should worry: it’s the 37 per cent of Australians whom the ASX estimates hold shares. What’s stopping mean Mr Bowen from snatching back imputation tax credits from all Australians whose modest dividends add to their employment income?
In his Tuesday speech, Mr Shorten completely ignored the incubus of ever-growing public spending and fiscal indiscipline gorging on the productive economy. The magic pudding economics of Labor’s 2016 campaign still prevail, and that’s Mr Turnbull’s great opportunity. If he, Scott Morrison and the ever-reliable Mathias Cormann have been offered manna from heaven, this is it. Needing a big revenue windfall to fund Labor’s big spending-promises, Mr Shorten offers an open goal: this trio must show some deft political footwork and kick one.
Mr Morrison and Senator Cormann are framing this year’s Budget, likely the government’s last big roll of the political dice. Facing likely defeat, they have nothing to lose. What’s stopping them sticking to their guns on productivity-stimulating company tax reform, but also restoring Tony Abbott’s comprehensive taxation white paper process? And why not relieve the burden on taxpayers by demonstrably targeting wasteful spending and committing to reducing the bloated government monster by at least five per cent? They can show voters some traditional Liberal values and go boldly where Labor dares not tread.
But if the Coalition really wants to be fair dinkum in protecting Australians’ super, they simply should repeal Kelly O’Dwyer’s cash-grabbing 2016 $1.6 million transfer cap on superannuation accounts. It’s a bit rich for the government to attack Labor’s brazenly threatening middle-class retirement savings when they themselves have form in that department.
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