Labor’s capitulation on tax policy may help them regain government, but what then?
That’s the headline and standfirst for my latest piece in Inside Story. Key paras
What can be said with more certainty is that, even if Labor wins the 2022 election, its capitulation on tax policy will make holding office for more than one term very difficult. The concession on negative gearing, while regrettable, was mainly symbolic. The lost revenue could be made up in other ways, or else with tolerance of a modestly higher budget deficit.
But the tax cuts are big. They will cost the budget around $15 billion in their first year of operation and the cost will rise steadily after that. That’s more than the entire annual value of the spending commitments Labor took to the 2019 election, which would have reached $11 billion in 2022–23, according to the Parliamentary Budget Office.
In other words, to offset this concession, Labor would need to abandon its entire program, and then find even more savings.
2 thoughts on “Recipe for a one-term government”
It’s almost as if Labor saw themselves described as Liberal Lite and challenged themselves to embody the moniker like never before. What do you think is the likelihood of a minority government, with the Greens’ holding the balance of power and forcing Labor further to the left?
The Greens are certainly pushing this as their dream scenario and argue it’s achievable, even likely. I’m far from convinced it’s achievable, but it certainly seems like a historic opportunity for them in both chambers of government.
In the senate they currently have 9 seats (1 in each state, 2 in WA, VIC, TAS), but only 3 of them (in the states with 2 senators) are up for re-election. They could potentially retain those 3 and win up to another 3, i.e. picking up an additional seat in the states where they currently only have 1 senator. With Labor moving to the right this seems achievable and in a tight election should ensure that only bipartisan motions can pass without The Greens’ support.
In the house of reps, Bandt will certainly retain Melbourne and there is a chance they could snatch another. I think this is even more unlikely than winning 3 seats in the Senate, but again in a tight election where the government currently has a one seat majority, two seats to the Greens may be all they need for balance of power in the house too. The seat of McNamara in Melbourne is likely one of their best chances, they were about 3.5k votes (out of 101k) away from winning it at the last election, and its been subject to a favourable redistribution which has moved a significant Jewish population (who preference Greens’ last due to their pro-Palestinian stance) into a neighbouring seat.
So they’re in striking distance in both chambers of government and if there was ever a policy platform that saw left-leaning voters opt for an alternative to Labor this must be it. I suppose the questions of interest then are a) how likely is this scenario (balance of power in one or both chambers), b) how much scope would there be for The Greens to demand concessions when Labor’s platform is built on being as close to the LNP as possible, c) what chance would Labor have of retaining government or preventing new legislation from being ripped out if the public didn’t vote for those policies (i.e. they voted for a platformless Labor and got some Greens policies instead – carbon tax all over again).
Welcome to the era of the career politician. Leadership, setting agendas, prosecuting arguments all come with political risk. Labor has decided winning isn’t everything thing, it’s the only thing. Life is much simpler as a weather vane. Which is tragic, because Labor got so many policy issues right in the 2019 election, among them revenue raising to pay for those policies.Labor can well afford to lose some of its votes to the Greens knowing full well that most of those Greens votes will flow back to them as second preferences under our compulsory preferential voting system. In Labor’s case this breeds arrogance and complacency. An optional preferential voting system would put the cat among the pigeons for both major parties. If you want my vote, earn it.