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Nick Cater: exposing Shorten the unthinkable

Nick Cater: exposing Shorten the unthinkable

Bill Shorten is skating on thin ice. Should the looming spate of by-elections prove a flop for Labor, Billy ‘liar’ is likely to crash through that ice that has for too long supported him. Dislike for Shorten is growing within the Party as thoughts turn toward Albanese or the hungry Chris Bowen. No doubt many more will compete for the trough.

Nick Cater writes:

To the extent that Bill Shorten’s tax policy could be described as Marxist, it owes more to Groucho than Karl.
“Those are my principles,” the comedian is reputed to have said, “and if you don’t like them I have others.”

Source: News Corp

As Groucho Marx said, if you can fake honesty

Shorten’s income tax cuts for low and lower-middle earners have the hallmarks of populism; a simplistic response to superficial diagnosis of the income stagnation besetting the economy. Labor will deliver “fair dinkum tax cuts”, Shorten told parliament last week, “bigger, better and fairer” than those promised by the government.
Shorten’s previous principles on income tax were outlined in a 2005 tax policy he released as Australian Workers Union secretary.
“Union chief joins call for big tax cuts,” announced the front-page headline in The Age. “Top rate should be 30c, says Shorten.”
Had Peter Costello been reckless enough to adopt Shorten’s proposal, it would have delighted the rich, reducing the tax bill for a $1 million salary earner by $170,000.
Yet this too was “fair dinkum tax reform”, Shorten assured ­The Age.
“The problem is escalating, as bracket creep drags more unionised wage earners into the top tax trap with every pay rise …
“The top marginal income tax rate thresholds should be raised to create a fair, productive and competitive tax system.”
Shorten’s proposal was a fiscal train crash; the National Centre for Social and Economic Modelling estimated it would blow a $44 billion hole in the budget.
Even so it would be preferable to the unappetising dish Shorten is offering now, one that offers an ­incentive to stay poor, and further shifts the burden from the millions who pay no net tax and those in the top quintile. It recognised that lowering taxes increases the incentive to work and invest.
By focusing entirely on the bottom end, Shorten’s new plan sends a warning to low-income earners that they will be punished if they get above their station.
Leigh Sales pointed out this flaw when she spoke to Shorten after his speech. What would happen to a teacher who had the audacity to become a principal and was rewarded with a salary of more than $120,000? Where was the fairness in that?
Once again Shorten found himself wedged between his class war and reality. “I’m not going to say someone on $120,000 is an amazing salary,” he conceded.
If $120,000 a year is not the threshold from battler to exorbitance, how about we raise it by 50 per cent? “Is $180,000 a year rich?” Melbourne radio station 3AW’s Neil Mitchell asked ­Shorten two years ago.
“No it’s not,” the Opposition Leader replied.
Ken Henry provided a solution to the threshold conundrum when he was asked by Labor to review the tax system in 2008. His solution was to simplify the tax scale by cutting out brackets. Henry recommended a flat rate of 35c in the dollar on income between $20,000 and $180,000 a year. It would remove the complexity beloved only by tax agents, and ­reduce the disincentives to industry and thrift. Its generous tax-free allowance on the first $20,000 kept it progressive. A worker on $40,000 would pay income tax on only half their salary, while someone on $100,000 would be levied on four-fifths of it, and so on.
Scott Morrison promised something similar in his budget last week by promising to abolish the 37 per cent tax bracket entirely in 2024-25. Workers earning more than $41,000 will pay 32.5c in the dollar until they hit $200,000.
Shorten rejected the plan out of hand, which caught no one by surprise, since Labor has rejected just about every other piece of advice Henry had to offer, including cutting corporate tax and abolishing the renewable energy target to mention just two. Morrison’s proposal was “another mate’s rates tax plan from the Liberal Party”, sneered Shorten, that would entrench “growing inequality and a greater sense of unfairness in this community”.
A prodigious ability to argue that black is white is useful in politics, but it will get you only so far. The art of politics, as Robert Menzies famously said, is the art of ­persuasion, not spin.
Australian voters do not fall easily for confidence tricks, which is why, all things being equal, they will reject Shorten’s package, fair dinkum though he claims it to be. They will be suspicious of what Shorten brags is his trifecta — higher taxes, higher spending and the ability to pay down debt. After all, paying down debt has never been federal Labor’s thing, and if it is to acquire a taste for it, it is unlikely to be under Shorten.
Whatever is driving Labor’s polling results, it certainly isn’t Shorten, a man who became the party’s leader without apparent conviction. Last week’s budget reply speech, almost certainly his last, was a chance to show if he ­believes in anything, other than himself.
His rating as preferred prime minister dropped in yesterday’s Newspoll to a meagre 32 per cent, eight points behind where Tony Abbott was in 2013 at the same point in the cycle.
It could be that Shorten has exhausted the potential of the politics of pessimism in a nation with a strong cultural resistance to feeling sorry for oneself. Full employment and 26 years of economic growth are not the conditions in which the narrative of haves and have-nots is likely to thrive.
The overwhelming sentiment is aspiration, the hope that every year will be better than the last and the expectation of keeping the ­rewards of one’s labours.
For a measure of how close last week’s budget comes to hitting that mark, and how badly Shorten may have missed it, look to the millennials, a generation with everything to aspire to.
A clear majority of 18 to 34-year-olds who expressed a preference expect to be better off be­cause of the government’s meas­ures, the biggest tick of approval since the pre-financial crisis budget of 2008. It touches the depths of the populist’s fears. What if his ­solutions are not popular?
Nick Cater is executive director of Menzies Research Centre.

{ 19 comments… add one }
  • Jack Richards 15/05/2018, 8:20 am

    There was a time, about a century ago, when our forefathers thought an eminently fair tax was “a shilling in the pound” i.e. 5%. Now were supposed to celebrate because it will mostly be 6/6 in the pound.

    Paying tax, not just income tax, but tax on everything else really shits me. I wouldn’t mind so much if it was spent wisely but it’s not. Literally billions are squandered each year in foreign aid to countries and people who make no secret about how much they hate everything about us; to every sort of whacko group with an axe to grind who get a grant; to illegal immigrants who have no business being here in the first place, to “refugees” who, collectively, can still manage to be 95% welfare dependent after 10 years; to worthless infrastructure schemes like the un-used de-sal plants and SA’s giant battery, to an endless line of academics to promote whacko causes and Marxism in universities, to disgusting policies like “safe schools”, to the submarines, the joint strike fighter, pumping water uphill so we can create “clean energy” when it comes back down – and then there’s the cost of all the pollies benefits and superannuation and their regular overseas junkets.

    On Sunday I went to town and filled up my car – 40% tax on every litre, bought two packets of smokes – 400% tax – and a bottle of whisky – 56% tax. Grrrr!

    • Bushkid 15/05/2018, 9:24 am

      Very well put, JR.

    • Bwana Neusi 15/05/2018, 3:28 pm

      Not to mention the zero pension for those super-annuants conned into saving their shekels with the expectation that it will augment their paid for pension.

      Notice that neither major party has been prepared to talk about that – as far as they are collectively concerned, its done and dusted.

      Now who and what else can we screw?

    • Rob 15/05/2018, 4:22 pm

      Despite a housing glut, particularly of apartments in Brisbane, greedy “developers” are destroying the once pleasant suburb which has been my home for seventy years by overloading it with five and six story monstrosities, after crossing the palms of local council members who gave approval despite vociferous protests and went home chuckling over their thirty pieces of silver.
      To get their hands on properties the “developers” have been paying outrageous prices to owners who would not otherwise consider selling.. This has inflated property value to the extent that “Comrade Commissar Pebblechook’s” bully boys are now demanding that I pay a property tax for the privilege of staying in my own home.
      As a correspondent to”XYZ” recently wrote, “Taxation is theft”.

      • Penguinite 15/05/2018, 7:31 pm

        And guess what will happen to prices for established houses will do when the developers have secured a majority of the easy stuff. They’ll do a Coles “Down Down the prices are DOWN!

    • TommyGun 15/05/2018, 4:46 pm

      Well said, as usual, Jack.
      I’m currently in Russia, where everyone pays 13% flat tax.
      That’s it; 13%. Pauper or billionaire; 13%.

      Makes it pretty hard to come back to land of “let’s screw the worker as hard as we can” (aka Australia.)

      In Australia you not only pay income tax, but then you get taxed on everything you buy (10% GST). But don’t forget much of the cost of alcohol, petrol, cigs etc IS TAX, so then you’re paying TAX on TAX with money that has already been TAXED!

      Jeez; too much for me already.

  • angry 15/05/2018, 8:21 am

    Kangaroo Court of Australia | Bill Shorten – Victoria police rape investigation


  • angry 15/05/2018, 8:22 am

    Shortens “aspirational” world 2030 « JoNova


  • angry 15/05/2018, 8:22 am

    The Pickering Post – SHORTEN THE RAPIST


  • angry 15/05/2018, 8:23 am

    Opposition Leader Bill Shorten targets super in bid to save $14 billion over 10 years | The Courier-Mail


  • angry 15/05/2018, 8:24 am

    Franking credit refunds: why I called Shorten a goose on national TV – Money magazine


  • angry 15/05/2018, 8:26 am

    Shorten promises $100 billion of pain for no climate gain | Herald Sun Andrew Bolt Blog


  • Penguinite 15/05/2018, 8:26 am

    Perspiration beats aspiration every time! We will all be better off sans Shorten!

  • Albert 15/05/2018, 8:31 am

    Having to wade through this crap on a daily basis to find out what it is that our useless politicians have buggered up next has brought me to the end of the line. I just can’t be bothered with their criminal stupidity any more.

  • Philip 15/05/2018, 8:55 am

    Let’s say I earn $40k pa. My neighbour works twice as hard and earns $80kpa. Is it fair or equitable that he pays four times the income tax that I do?

    Should I flash my last tax return before Woolworths adds up my grocery bill or the restaurant works out the cost of my salad and chips? Should the fuel in the bowser be priced on a sliding scale depending on my last pay check?

    A flat rate tax of .25 in the dollar is not only fairer but we could do away with 75% of the sponges in the Tax office and the Treasury. They could join the 75% of redundant drones who used to work in CentreLink after we introduce a basic income for everybody.
    All of those present no hopers could go and get real jobs which actually contribute to the Country’s economy.
    Trouble is the unions wouldn’t be happy. We know who really runs the country, don’t we?

  • Lorraine 15/05/2018, 9:16 am

    Shorten the nobody man from nowhere, that appeared every time a camera was turned on, when the mine disaster in Tasmania drew attention , Shorten was there as the UNION man the UNION compassionate man. The Union man in the fray for himself and only him self. Time marches on and he is the same Billy fooling one and all. He is the man of the people, the working class, the always angry because some other body has worked really hard, received an education and bettered themselves. Class warfare and jealousies will bring on the followers . Has he gone to far , we need to keep him out of the Lodge, you may like ALBO but he is also left and the Fishwife no thanks

    • angry 15/05/2018, 10:06 am

      anthony ALBASLEAZY and his disgraceful comments regarding the ANTI CARBON TAX CONVOY to canberra several years ago…….


  • DT 15/05/2018, 3:46 pm

    Anthony “The Italian” Albanese.

    • Joe Blogs 15/05/2018, 7:22 pm

      “Albanese” is Itie for “slightly affable socialist bullshit artist cum run’n’tug aficionado”.

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