June 30th 2018

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Articles from this issue:

COVER STORY NSW electricity grid now at 'crisis point'

EDITORIAL China's pivotal role in Trump-Kim summit

CANBERRA OBSERVED Throwing our 8ยข in the ring over sale of ABC

OPINION Why populism has become popular among the populace

MEDIA Ramsay Centre gets all that' left from ABC's Drum

ENERGY Solar panels leave hidden carbon footprint

NATIONAL AFFAIRS Adelaide Archbishop Philip Wilson conviction conundrum

ENERGY Don't let our waste go to waste: energise it

OPINION We've moved from low standards to no standards

LITERATURE AND CULTURE Christian humour through the ages: Dante, Chaucer and Cervantes

ECONOMICS Trump, China, the WTO and world trade

WHY BREXIT? A tight little island


MUSIC Contrary emotions: Following and leading the beat

CINEMA Incredibles 2: Just the average family of superheroes

BOOK REVIEW The main driver of our foreign policy

BOOK REVIEW Commitment at risk of obliteration



EDITORIAL By-elections a trial run for next federal election

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By-elections a trial run for next federal election

by Peter Westmore

News Weekly, June 30, 2018

Prime Minister Malcolm Turnbull has drawn the battle lines for the next election by securing passage of his $144 billion tax reform package through Federal Parliament and, in the process, defining a clear difference from Labor on the issue.

Spot the corporate tax cutter.

With Labor ahead in the opinion polls, and many voters believing that the policies of government and opposition are almost indistinguishable on issues such as foreign affairs, economic management and the environment, the Prime Minister has been trying to find an issue that clearly differentiates the Government from Labor ahead of the next election.

He believes he has found it in taxation policy, but it remains to be seen whether the Australian people will buy it.

The Government’s tax-reform package includes changes to personal tax and to the corporate tax rate.

Personal tax cuts

In relation to personal tax, income-tax cuts will be delivered in three stages over seven years. The first stage involves giving low and middle-income earners a tax offset of up to $530, which they will be able to claim when they lodge their 2018–19 tax return next year.

People earning up to $37,000 a year will get a maximum offset of $200, while people earning between $37,000 and $90,000 will get a maximum offset of $530. Separately, the Government will increase the 32.5 per cent tax bracket from $87,000 to $90,000, saving a person earning $90,000 about $135 in tax.

From July 1, 2022, it will extend the 32.5 per cent bracket to include those earning up to $120,000. From 2024, it will remove the 37 per cent tax bracket altogether, so that those earning up to $200,000 only pay 32.5 per cent tax from then on.

There will then be a single tax bracket from about $40,000 to $200,000.

In relation to the corporate tax rate, the Coalition Government proposes to cut the company tax rate to 25 per cent from 30 per cent by 2026–27.

Bill Shorten and the Labor Party are totally opposed to the company tax cuts, and support the personal income-tax cuts only for low-income workers.

For most people, all this is very complicated. Although surveys have shown that most people support a cut to the company tax rate, it is unclear whether they feel sufficiently strongly about it to change their votes.

Bill Shorten’s opposition to the tax cuts is unashamedly based on the politics of envy. It characterises the Government’s corporate tax cuts as a subsidy for the “big end of town”, “large multinationals and the big banks”, and the personal tax reforms as a benefit for wealthy individuals like Malcolm Turnbull.

It is clear that some in the Labor ranks have misgivings about Shorten’s tactics. Left-wing Labor frontbencher Anthony Albanese has stated publicly that Labor wants to have good relations with the corporate sector, provoking some anguish among his party colleagues.

In giving the Whitlam Oration in Sydney, the Shadow Minister for Infrastructure criticised the Turnbull Government but used words that apply at least equally to his own leader.

He said that many people from working-class backgrounds are not members of unions because they were beneficiaries of Gough Whitlam’s education reforms.

“They became the first people in their families to go to university, work in the professions and non-unionised industries, or start their own business. We cannot afford to ignore this demographic,” he said.

Mr Albanese criticised the Government for trying to pit unions and business against each other. “Division is worse than doing nothing,” he said. “It saps national energy. It gets you nowhere. A better course would be to seek to enlist competing interest groups as partners in progress by encouraging collaboration and compromise.”

A very different message from that given by Mr Shorten.


And that is why the five by-elections to be held on July 28 become important.

The by-elections were called in the wake of the dual-citizenship saga, and involve by-elections in the seats of Braddon (Tasmania), Longman (Queensland), Mayo (South Australia), and Fremantle and Perth (Western Australia).

Four of the five seats were formerly Labor seats, and Mayo, traditionally a Liberal seat, was won by a candidate from Nick Xenophon’s party.

The Liberals have announced that they will not contest the relatively safe Labor seats of Fremantle and Perth, so the focus is on the other three seats.

Historically, governments lose by-elections, and no government has won a by-election from the opposition for a hundred years.

But the mood of the electorate today is different, and observers have said it is possible that the Liberal Party could win all three, if the swing is large enough.

Hence the by-elections are being seen as a trial run for the next federal election, and both Labor and the Government have announced that they will campaign on the issue of tax.

Peter Westmore is publisher of News Weekly.

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Last Modified:
April 4, 2018, 6:45 pm