Wednesday 20th of June 2018

going for gold .....

going for gold .....

By dividing, Labor hopes to rule again. But this admission of failure repudiates its most successful period in office.

The theme of the Gillard government's election campaign has now emerged into the light of day. Although no one in Labor has yet stated it clearly as a single coherent idea, it's to be a campaign on "values".

In particular, Labor is portraying itself as the party of fairness for the worker and the average family. It will try to present the Liberals as the party of the rich, the bosses and the multinational corporations.

Labor hoped that the Liberals would be provoked ... The Liberals, however, are fully alert to Labor's provocations on industrial relations. 

By drawing the contrast as starkly as it can, Labor plans to force voters to make a choice between Julia Gillard and Tony Abbott on this central question - which leader cares more about fairness for the ordinary worker, the average family, the little guy?

It's a concept based on division, pitting the rich against the rest, dividing the boss from the worker, alienating big business from the consumer.

You can see three of the important strands of this theme starting to emerge in government policy in the last few days. One is working conditions, another is tax on superannuation, and third is treatment of technology multinationals.

To make it work, however, Gillard needs Abbott to buy into the fight, to oppose the government, to put himself in the corner with the bad guys, to stand up for "unfairness". Will he take the bait?

First, working conditions. The Minister for Workplace Relations, Bill Shorten, made announcements on four consecutive days this week of incremental new measures for the protection of working conditions of "modern families".

This is the renaming, incidentally, of the electoral demographic that was previously known as the "working family". The working family was overworked to the point of ridicule in earlier Labor campaign rhetoric and has been retired in favour of the "modern family".

It's the new name for the same target group - families living in outer-metropolitan areas where the typical father works full-time earning about $50,000 to $90,000 and the mother earns another $20,000 to $30,000 working part-time. In other words, the bulk of the population in the typical marginal seat.

On Monday, Shorten announced that the government would change the law to broaden the categories of workers entitled to ask their employers for flexible working hours.

On Tuesday, he announced that workers being bullied would have a new right to ask Fair Work Australia to intervene; at the moment it's up to the state WorkCover bodies and has nothing to do with Fair Work Australia, the industrial umpire.

On Wednesday, he announced proposals to give pregnant women some extra flexibility in their work arrangements and maternity leave.

On Thursday, he announced that the government would amend law to allow workers the right to demand that an employer "genuinely consult" over roster changes.

This welter of announcements puzzled industrial experts. Some of the changes had been recommended by the independent review into the Fair Work Act, but some had not. There was no detail attached to any of them. And the whole exercise evidently was conducted in great haste; it emerged in Senate estimates hearings that Fair Work Australia had been consulted on the most dramatic of the changes, on bullying, only in the previous week.

In other words, this was a campaign announcement, not the considered proposal of an orderly government. And the overarching intention? Labor hoped that the Liberals would be provoked into opposing some of these changes.

That way, it could accuse Abbott of being the enemy of the worker, the oppressor of the pregnant mum, the bullied junior, the hard-working battler. The Liberals, however, are fully alert to Labor's provocations on industrial relations. They will not seek to block any such changes, according to members of the Coalition leadership group.

Second is superannuation. At the moment, the people who put the biggest sums into superannuation get the biggest benefit. In other words, the rich. The Treasury frets that the size of the tax concessions on super are too big, too expensive, and need to be reined in.

As the May budget approaches, Gillard is considering doing exactly this, cutting the generosity of the tax concessions for workers on higher incomes.

Overall, Treasury reckons that super tax-breaks will cost the tax system $32 billion this year and rising to $45 billion in 2015-16.

It estimates that super tax-breaks were worth $900 a year to an average earner in 2009-10, but worth $10,600 to someone in the top 1 per cent of earners. There is a ready-made case for Gillard to say that the concessions are too generous, and that while ordinary workers can keep their benefits, the rich will have to have theirs trimmed to make the system sustainable.

The Prime Minister has ruled out any changes to one key area that's now untaxed - the government won't put a tax on super when a worker withdraws it, she says.

But she has carefully declined to rule out changes to two other key tax breaks; the government is toying with the idea of increasing tax on the money that high-income earners pay into their super accounts, or on the investment returns as they accrue each year, or both.

The savings to the tax system would be illusory - richer people would simply divert money away from super and into some other low-tax investment, probably real estate. The Treasury wouldn't be much better off, and Australia's crisis of housing affordability would only get worse. But, for political purposes, it could work well for the Gillard government to play on envy and resentment.

Would Abbott be tempted into this fight, allowing Labor to paint him as the defender of the privileged rich? The Liberals have already given Gillard a head start.

The Coalition has promised to scrap a tax break that Labor has given to 3.6 million lower-income workers. Under Labor, while everyone else pays a 15 per cent tax on their contributions to super, this group pays no tax. It's worth an average of about $500 a year per person to lower-income workers.

Abbott promises to remove this tax break because it's funded by the mining tax, and the Coalition is pledged to repeal the mining tax. Labor is taunting Abbott already as the man who wants to smash the poor.

Third is the government campaign against international tech giants. Apple, Microsoft and Adobe declined invitations to appear before a parliamentary committee to explain the "Australia tax" that they apply to the products they sell here. The consumer advocate Choice has shown that Australians pay about 50 per cent more than Americans for identical music, software, games and hardware. For one Microsoft product, a software development program, you could buy a return airfare from Sydney to Los Angeles, buy the program at the US price, and still save money.

So the committee has now taken the extraordinary move of ordering the three to appear on March 22. "In what's probably the first time anywhere in the world, these IT firms are now being called by the Australian Parliament to explain why they price their products so much higher in Australia compared to the US," says Labor's Ed Husic.

The Liberals are not opposing this campaign, but as Labor broadens its attack to a wider range of multinationals, it will come under some industry pressure to do so. It won't have too much trouble resisting.

In short, Labor is seeking an old-fashioned, populist, left-wing fight based on envy and resentment. The usual shorthand is "class warfare". It's the exact opposite of the approach proposed by Kevin Rudd: "One of the difficult things about leadership is uniting a nation rather than dividing it," he said last October. "The easiest thing to do in national political life is to divide us; to divide our country, to divide our people. It's an easy script, historically on grounds of race or even religion, sometimes in terms of class."

It's also the repudiation of the electoral model created by the Labor governments of Bob Hawke and Paul Keating. Their economic reform program created a surge in the number of self-employed people and independent contractors, and a long decline in the share of the unionised workforce. Australia now has more self-employed people than union members.

As Keating said in 2005, "the Labor Party has given up the middle-class, middle-ground, sole-employer, self-employed, small-business voter that Bob Hawke and I generated for it." It didn't believe in the economic model of a free and competitive market economy, and it lost the electoral model of a progressive party that can thrive in that economy, he said.

So why is Labor reverting to an antediluvian model of socialist politics as its electoral theme? First, it doesn't have a lot of options. It can't very well campaign on competence, especially after its extraordinary series of blunders managing the budget.

And it can't expect to win an election on trustworthiness, after the betrayal of Rudd, the broken promise on carbon tax, and, once again, the trail of broken promises on budget surpluses and the mining tax.

So it will pursue a furious campaign against Abbott as a man who can't be trusted to look after the interests of the ordinary worker, the "modern family". The implicit Labor message: "We may be incompetent and untrustworthy, but at least we're on your side."

As this unfolds, anxious eyes in the two main parties dart nervously to the Labor backbench, checking for any sign that Rudd may be preparing a move for the Labor leadership. He's not. The way the Gillard team is performing, he doesn't need to.

Gillards Discordant Old Song