Big-Spending Labor's Hubris Is a Huge Mistake
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Big-spending Labor’s hubris is a huge mistake By Josh Frydenberg Australian Financial Review (AFR) Saturday 22nd December 2018 1101 words Page 17 | Section: Perspective 432cm on the page Big-spending Labor’s hubris is a huge mistake ●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●● Comment Josh Frydenberg ●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●● Back in December 2013, in the wake of Labor’s election loss, shadow treasurer Chris Bowen rose to his feet at the National Press Club. He said for the Coalition to be a success, it needed to pass four economic tests. First, unemployment must be below 61⁄4 per cent. Second, Australia must be in the top 10 wealthiest countries. Third, Australia’s AAA credit rating must be maintained; and fourth, tax to GDP must be Chris Bowen, right, at the ALP conference in below 23.7 per cent. Adelaide. PHOTO: ALEX ELLINGHAUSEN On each count, the Coalition has not only met these benchmarks, but exceeded them. drive prices down, Jim Chalmers says prices Unemployment is at 5.1 per cent, will go up, and Joel Fitzgibbon has a bet significantly below the 5.7 per cent it was each way, saying prices will go neither up when we came to government. More than nor down. 1.2 million new jobs have been created in the In fact, Labor’s negative gearing changes past five years with the number of women are such a shambles, they can’t even tell you and young people in the workforce at record the starting day of their policy, which, if highs. Australia remains in the top 10 delayed, will blow a $6 billion hole in their wealthiest countries in the world, with budget costings. living standards rising through the year, Labor’s retiree tax is also ill-timed and ill- whereas they were falling under Labor. conceived, breaking years of bipartisanship Australia is one of only 10 countries with a around the principle of double taxation. AAA credit rating from all three leading In fact, when Howard and Costello credit rating agencies, with Standard & introduced the full refundability of franking Poor’s praising our ‘‘fiscal prudence’’ and credits, shadow treasurer Simon Crean said ‘‘budget performance’’. ‘‘we have no difficulties supporting the At 23.1 per cent, our tax-to-GDP ratio is proposal’’ as ‘‘it improves the current well below both our speed limit of 23.9 per taxation situation faced by low-income cent and the benchmark set by Bowen. investors, especially retired Australians’’. It’s a tad ironic, or one could even say The impact of this policy will not only be hypocritical, to see Labor at last week’s felt by more than 900,000 individuals and national conference walk away from a 200,000 self-managed super funds who will commitment to putting in place a tax-to- be worse off, but also by the many GDP limit, saying to do so would be ‘‘an Australian companies whose ability to raise arbitrary cap’’ and ‘‘not fulfil any useful capital and grow their businesses has, in the economic purpose’’. past, been enhanced by their offering to This is because there is no limit to Labor’s Australian investors of fully franked appetite for tax increases. dividends. The burden of Labor’s new tax is In contrast, the mid-year budget update showed the economy is growing strongly and the government’s books are in their best There will be one group shape in more than a decade. This has been achieved without imposing new taxes. of big winners if Compared to what was estimated at Shorten gets the keys to budget time in May, the deficit for 2018-19 has been cut by two-thirds, the surplus for The Lodge. The unions. 2019-20 has almost doubled, and the cumulative surpluses over the forward estimates have doubled to more than also extended to discretionary trusts, $30 billion. The rate of spending growth is superannuants and income earners, be they at 1.9 per cent, less than half of what we policemen, school teachers or crane inherited, and the lowest level of any operators. government in 50 years. No one is spared from Labor’s far- The number of working-age Australians reaching tax grab. However, there will be on welfare is at its lowest level in 25 years one group of big winners if Shorten gets the and net debt to GDP is coming down from keys to The Lodge. The unions. 18.2 per cent today to just 1.5 per cent in 10 While Kevin Rudd, Peter Beattie and years. These are numbers Chris Bowen and others have sought to distance themselves Labor could only dream of, given when they from the CFMMEU, Shorten has grown only were last in government growth was lower, closer. They were in the front row at the unemployment was higher, debt was rising national conference and in government at more than 30 per cent per year, and they’ll sit at Labor’s cabinet table. investment was in freefall. Industry-wide bargaining, the abolition Labor couldn’t even deliver a surplus of the ABCC and widespread industrial despite being blessed with the best terms of disputation would be a consequence of a trade in more than 100 years and iron ore Labor government, haunting business and prices that were consistently more than damaging the economy. double what they are today. There is no clearer sign of things to come This makes a mockery of Bowen’s when Shorten said ‘‘as Labor leader, I still desperate attempt to belittle Australia’s and think like an organiser’’, and the head of the the government’s economic success by ACTU says it doesn’t think there is a saying the MYEFO numbers merely problem with breaking the law. reflected ‘‘global strength and domestic The differences between the major weakness’’. How pathetic. parties at the next election are clear. What would lead to domestic weakness is The Coalition has delivered a strong and Labor’s plan to impose $200 billion of new growing economy, with MYEFO confirming taxes on Australian families and businesses. next year’s budget will be back in the black. Chief among them is Labor’s plans to In contrast, Labor has a big-taxing, big- abolish negative gearing as we know it and spending, pro-union agenda that will increase capital gains tax by 50 per cent. squander the hard-fought gains of the past Even Corbyn and Sanders’ new bedfellow, five years and derail our positive economic Labor president Wayne Swan, said when he trajectory. was treasurer it would be ‘‘economically At the national conference, you could see disastrous’’ to abolish negative gearing as their hubris, declaring victory, to quote Labor’s plan will hit home owners and Bowen ‘‘before getting to the finish line’’. renters alike. Such a presumptuous attitude is a Bowen has revealed he needed to take his mistake, as between now and election day negative gearing policy to the shadow there is a long way to run. P cabinet 19 times, but his colleagues still can’t ●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●● get their lines right. Bill Shorten says it will Josh Frydenberg is the federal Treasurer. AFRGA1 001 Licensed by the Copyright Agency (Australia). You may only copy or communicate this media item with an appropriate license. The media item remains the legal property of Delivering Print, Online, TV, Radio & its original creator. Copyright Streem Pty Ltd, 2018 Social media intelligence in realtime..