Working people are over hearing neoliberalism is good for them – and Labor is lapping it up

Extract from The Guardian

Labor party

Bill Shorten’s new tax on trusts policy being unveiled this weekend is part of a hard-headed calculation to be more assertively progressive

Labor has been emboldened by the positive public reception to the measures it has already taken on capital gains tax and negative gearing. Photograph: Alamy Stock Photo

Katharine Murphy Political editor

Friday 28 July 2017 13.21 AEST Last modified on Friday 28 July 2017 13.51 AEST

We need to begin our thinking this weekend with the New South Wales Labor conference. Last time Bill Shorten went to the state conference, he outlined plans to overhaul negative gearing. This weekend in Sydney, the Labor leader will take a new policy on the taxation of trusts to the comrades.
In among the flurry of motions and conference floor scraps about scripture in schools, and tenants rights and no new subsidies for coal mines and a debate that will bring Labor one step closer to recognising Palestine – Shorten will lay down another important marker about Labor’s economic policy.
A cynic might say Shorten is laying out a new policy on the taxation of trusts to stay one step ahead of an economic policy debate which has been bubbling away within his own ranks, and he’s doing it in NSW because bringing a gift basket to the Sussex Street knees-up is only polite when you rely on their institutional backing for the stability of your leadership.

While the cynical insider take contains an element of truth, seeing events entirely through that prism misses the broader point that Labor federally has taken a hard-headed political calculation that there is only one way for centre-left politics to go post global financial crisis, and that’s assertively progressive.
The party has been emboldened by the positive public reception to the measures it has already taken on capital gains tax and negative gearing – policies that were once considered the political equivalent of a suicide note.
Labor’s economic repositioning reflects a view that working people are now well over being told that neoliberalism is good for them.
Several decades into globalisation, technological disruption and rolling structural adjustment, soothing mantras written and authorised by the plutocracy don’t seem to cut it. People now want a larger share of the economic pie.
Bill Shorten and his treasurer, Chris Bowen, have been clear they won’t cop a “Buffett tax” (which has emerged as the proxy battle in Labor ranks about whether economic policy is sufficiently muscular, and by muscular, read redistributive) – but they’ll cop policies delivering similar objectives.
Hence Shorten’s gift basket to the NSW conference on Sunday. Call adjusting the tax treatment of trusts a downpayment on the Buffett you have, when you won’t have a Buffett.

Labor’s repositioning won’t stop with tax policy. Industrial relations is likely to make an appearance at the NSW conference over the weekend, and also federally, as soon as next week.
Labor’s workplace spokesman, Brendan O’Connor, will give a speech to the Sydney Institute next Wednesday making it clear that the ALP will overhaul workplace relations laws if it wins the next election.
This is a significant signal from O’Connor, given workplace relations has been softly, softly territory for Labor in recent political history.
The inequality debate, and the clear evidence of wages stagnation in the economy, gives Labor political cover to open a conversation about whether employees currently have sufficient bargaining power in the system.
Sustained wages stagnation – and the negative flow-on effects of that for economic activity and growth – suggests we might have a problem. Just ask the Reserve Bank governor.
Now of course business will start jumping out of the trees, and the Coalition will paint Shorten as the hapless puppet of the trade union movement, and the usual conservative media organs and shock jocks will rant themselves hoarse in predicting the imminent decline and fall of civilisation, and Maurice Newman may be sufficiently moved to write a column about Venezuela.
But Labor isn’t pitching into a vacuum. The political overture is to workers who know that they lack relative bargaining power, and struggle to land a pay increase.
This week we’ve seen the Turnbull government attempt to fortify itself against Labor’s advancing campaign machine by arguing Labor’s inequality narrative is a complete crock.
Scott Morrison says Labor is cynically overstating the inequality problem to play to populist sentiment and justify a bout of class warfare and wild-eyed redistribution.
There may be an element of truth Morrison’s analysis, depending on which data you look at, but if your strongest rebuttal point is a public seminar about the intricacies of the Gini coefficient, then sorry Scott, you’ve already lost.
You’ve lost in two ways. You’ve been pulled into fighting the core, daily, political battle entirely on Labor’s turf and terms, rather than setting the agenda through the articulation your own economic policy.

And if all you’ve got in your arsenal is the same, tired old defence of trickle down, and a snazzy data analysis, you will not cut through. The Coalition appears intent on trotting out aspiration as its trump card at a time when the mood of the country seems to have swung to post-aspirational territory.
So Morrison, sadly, but typically, is all pith and no orange. If the government wants to go toe to toe with Labor on competing visions for economic policy, the treasurer needs to do himself a big favour, and find something meaningful to say. Pronto.
We need to take a moment now to consider some broader connotations associated with inequality and fairness, and the now widely held, and deeply corrosive perception, that there is one rule for some people and another rule for others.
This week in politics, we’ve had a serious scandal about water allocations, we’ve had Tony Abbott talking about the importance of promises while walking back one of his own, we’ve had a crossbencher (apparently) wishing away the inconvenience of (possible) British citizenship, and a Cabinet minister having to step aside because he may be ineligible to sit in the parliament.
Let’s just call it another #auspol week, chock full of bad vibes and bad looks.
The outgoing resources minister, Matt Canavan, didn’t assist the bad vibes and bad looks when he took a moment on his way into the departure lounge to note he’d had the singular honour of representing the mining industry in the people’s house.

Matt Canavan, Facebook

Canavan’s heart-swelling tribute to coal central was a neat little case study about the perceptions gap between the political class and the people it is supposed to represent.
The people who sent Canavan to Canberra – the voters – aren’t sending him there as mining’s man, they are sending him there as their man, to represent their interests, and, of course, the national interest.
Political parties need to have that sentiment very much front of mind if they want to start formalising the zeitgeist debate about the gross iniquity of societies being structured with one rule for one and another rule for others.
Eva Cox put this very well this week when she noted the inequality debate in this country is fuelled not just by measurable economic factors, but by the increasing phenomenon of voters feeling profoundly disconnected from people in power.
“These are toxic effects that need to be fixed, not just through adjusting tax or individual payments,” Cox said in a piece for The Conversation.
A political debate about inequality needs to transition in very short order to cover concrete action on integrity in politics, otherwise I think the voter discount factor, the default meh response, is going to remain pretty high.
Cox put the current conundrum facing Australian politics very succinctly by posing a dead simple question.
“Who do you trust? Increasingly the answer seems to be: nobody”.