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Shortens big spending Bombshell

Tuesday, April 26th, 2016

If Bill Shorten is troubled by the government’s taunts that he’s addicted to taxing and spending, there was no sign of it last night. The Opposition Leader fronted an audience of undecided voters at the Sky News People’s Forum at the Redcliffe RSL in Brisbane, and was in a generous mood. No one left empty-handed.

The first questioner asked about the plight of Arrium steel workers. Shorten suggested all government-funded projects should use Australian steel and even raised the prospect of taxpayers co-investing to keep this “vital” industry afloat.

Next came a question on the exorbitant cost of childcare. Shorten promised to allocate more money to “childcare priorities” (although what this actually means is unclear). A mature-aged woman unable to find employment was told Labor would offer greater incentives to employers to hire older workers. A self-funded retiree was told Labor would consider reversing the tougher assets test for the part-pension. Shorten also hinted at more generous GP rebates, a better NBN and increases in the superannuation guarantee for all workers. And of course there was the recurring references throughout the night to Labor’s already announced $37 billion pledge on school funding.

It was a far cry from the last Labor leader who brought the party from opposition into government. Back in 2007, Kevin Rudd made a virtue of his fiscal restraint. When John Howard made $10 billion in spending commitments in his campaign launch, Rudd offered a more prudent approach. “I have no intention today of repeating Mr Howard’s irresponsible spending spree”, he said. “Unlike Mr Howard, I will heed the warnings of the Reserve Bank.”

Back then the budget was in surplus (although not for much longer, as it turned out). Today the budget is still $36 billion in the red. Yet the Opposition Leader clearly believes more spending is the path to victory. On childcare, the NBN and health, Shorten was dropping clues at the Redcliffe forum.

Government head-kicker Peter Dutton was quick to label Shorten the most reckless Labor leader since Gough Whitlam. He suggested Shorten spent the night “tipping money out the door” instead of showing some responsibility.

But here is the key difference. Where the government says this spending can’t be afforded, Shorten thinks it most certainly can. He’s already announced plans to hike cigarette tax, restrict future negative gearing to new properties, halve the capital gains tax discount, tax the superannuation earnings of the wealthy and hit multinationals. And this may not be the end of it.

The general assumption is Labor has already unveiled all of its revenue raising plans. The campaign will be used to spend the money. But don’t be surprised if there’s another revenue bombshell to come. Could the 30% private health insurance rebate be in Labor’s sights? Could other areas of spending that favour wealthy individuals or corporations be on the chopping block?

Bill Shorten isn’t playing it safe in this campaign. He’s no small target. Despite this week’s Newspoll, Shorten knows he’s the underdog and has to gamble with some bold moves. He wants to offer the extra spending on schools, hospitals, GPs, childcare, the NBN and more while also pledging a healthier budget bottom line than the Coalition. He will upset plenty of voters at the top end, but they’re not the ones he’s worried about.

In just over a week, parliament will resume for what’s most likely to be the final sitting before the election. As soon as the Senate “refuses to pass” the ABCC bill, we will know the election date is confirmed as July 2. Bill Shorten has used the past few weeks campaigning in marginal seats around the country, honing his message to the voters who will decide the outcome. Malcolm Turnbull hasn’t been in many marginal seats during this time. He’s instead been igniting and then trying to extinguish spotfires on tax and education, before settling on a new campaign line about “living within our means”. It’s hardly an inspiring slogan, but could be effective.

Turnbull will use the Budget next month to draw a sharp distinction with Labor over economic management. For an economy in transition and a budget deep in deficit, he will argue, more spending is not the answer. The big question is, will voters accept the case for budget responsibility and repair or go for the guy offering something for everyone?

SWITZER BROKER

Author: Lynne Cox

She is a Mortgage Broker and holds an Australian Credit Licence # 365386. She has been involved in the Mortgage Broking Industry since May 1996 but has been involved in small business since 1977. Lynne is a licensed finance broker. She was the President of the Finance Brokers Association of Australia until March 2004 where she is now a Life Member, and she was also a Member of the Finance Brokers Supervisory Board until it disbanded in October 2003.