Not being Abbott is not enough for Labor

LABOR should now stop repaying Tony Abbott for the six years of obstructionist bastardry during the time Labor was last in Government – for Labor’s own sake and the sake of the nation.

Generals can learn from old battles, but they make a grave mistake if they think the next war can be won solely by copying the tactics and strategy of the previous campaign.

Bill Shorten should not imagine that by merely repeating what Abbott did in Opposition that Labor will glide into office. Abbott was viciously personal; opposed for the sake of opposing; exaggerated and misrepresented; and built his campaign around three negatives: repeal the mining and carbon taxes and stop the boats. And he made himself a small target.

It was a successful formula, but to repeat would be to face the paradox of Shrodinger’s cat – the act of observation changes the state of what is observed.

The act of running an election campaign is almost certain to change the state of the electorate for next time, so the rerun is less likely to work.

Abbott won, first and foremost, because he was not Labor. Shorten should not expect to win, first and foremost, because he is not Abbott.

So, rather than repaying Abbott for the six years of Opposition it should revisit an earlier time Labor was in Government. It should now repay the Coalition for what the Coalition did in the 1980s when it did not obstruct Labor’s economic reforms and did not oppose for the sake of opposition or generate a scare campaign.

Two major reviews landed on the Government’s desk last week. They both deserve serious consideration. One was on tax and the other was on competition policy.

The fact that both reiterate the obvious things that economists and sensible commentators have been saying for years, if not decades, is neither here nor there. Indeed, that suggests that the proposals of both reviews should be adopted unless a very cogent case is made for not doing so.

Labor could take a lot of comfort in getting on the front foot by responding to the reviews more actively. To date, Shorten has played the small target. “We need to see the full detail of the Government’s proposals, blah, blah, blah . . . .” The subscript being: “If we can make the slightest bit of political capital out of the government proposing any changes we will.”

Labor should now go through the recommendations and state which ones it agrees with. Better still, list them in order of priority.

The comfort Labor could get from this lies in the fact that a lot of the suggested tax changes are to wind back the foolish largesse of the Howard-Costello years. That Government, given the choice between, on one hand, building up the tax base and wealth funds in the boom years or, on the other hand, using benefits of the boom to buy votes, invariably went for the latter.

They happily scrapped the reasonable-benefits limits for tax-free superannuation pay-outs, so people with millions in superannuation paid no tax on its withdrawal from the fund.

Remember that smirk on Treasurer Peter Costello’s face when he announced no tax on superannuation withdrawals for retirees aged over 60.

Remember a similar smirk on his face when he announced the halving of the capital gains tax.

The Howard-Costello government also eased the means test on the pension.

And worse of all, to add to our woes it increased immigration and gave hand-outs to couples to have more children – “one for Mum, one for Dad and one of the nation”, Costello smirked.

Increased population is one of the main reasons we are in such a jam and cannot keep up with the infrastructure demands it puts on us.

So Shorten should be identifying the elements of the tax review and saying to the Government: we will not oppose these things.

For every dollar of woe in Australia’s public finances caused by Labor’s overspending, there are two dollars of woe caused by the erosion of the revenue base by two Coalition Governments. First by the Howard Government’s tax concessions to wealthy superannuants and capital accruers and its hand-outs to middle-class families. And then by the Abbott’s Government’s abolition of the carbon and mining taxes.

While it is on the subject of tax, Labor should push for a “Tobin” tax – a tax at an extremely low rate upon high-volume, short-term (we are talking seconds and minutes here) capital transactions which manipulate share prices. This would raise about $1 billion a year and put a brake on speculative share transactions which are done at the expense of superannuation funds and mum-and-dad shareholders.

But of equal importance, Shorten must also accept the key recommendations of the Harper competition review.

There the argument is harder because good public policy faces well-heeled entrenched interests. Those interests can buy the sophisticated sophistry and access to media outlets to propagate it for quite small amounts of money compared to the benefits they reap from the status quo.

Expect the pharmacy industry to launch a scare campaign pitched at the aging and sick to ward off the dismantling of their anti-competitive pharmacy location rules. Expect the taxi industry to paint a picture of passenger exposure to violence and fraud if Uber is permitted to enter the market openly.

Neither side of politics in Government has much chance against such campaigns. But if they can both agree to rebuff them, the public will see these campaigns for the self-serving exercises that they are.

So rather than a small target, negative campaigner, Shorten should rework the electoral landscape to present Labor as a responsible, constructive force which will forsake short-term political advantage in the national interest.

Such an approach might be more likely to yield electoral success in 2016 than the old small-target strategy.
CRISPIN HULL
This article first appeared in The Canberra Times and Fairfax Media on 5 April 2015.