Seven years ago this April, my predecessor as shadow treasurer, Joe Hockey, got to his feet in London to declare the “age
of entitlement” over. He didn’t declare any specific policies, just
that budgets were under so much pressure that people who receive support
from governments needed to get used to less support, more standing on
their own feet.
As his successor as shadow treasurer, I actually agree with where he was coming from. The problem was twofold, however: the Liberals didn’t have the gumption to announce who would be hit by his policies in advance (in fact, they actively misled people by promising no cuts to health, education, the pension and the ABC and SBS).
The second problem was that when they did tackle the age of entitlement, in the 2014 budget,
they targeted people and services that could least afford it:
pensioners and basic and important public services including health and
education.As his successor as shadow treasurer, I actually agree with where he was coming from. The problem was twofold, however: the Liberals didn’t have the gumption to announce who would be hit by his policies in advance (in fact, they actively misled people by promising no cuts to health, education, the pension and the ABC and SBS).
Labor has taken a different approach. Not only have we been absolutely upfront and explicit about our plans, we’ve identified those areas of the budget that haven’t received enough attention in the debate and have been under-analysed by governments.
Primary school civics students are taught that the federal government funds health and education, defence and foreign affairs. But they won’t know that, for some of these areas, the government allocated more money to tax concessions – many of which were created years ago and have been left in “set and forget” mode.
Did you know, for example, that the federal government spends $8bn on childcare, but $11.7bn on negative gearing and capital gains tax concessions?
It spent $5.2bn on public schools in 2014-15, but $5.9bn the same year on being the only country in the world that sends tax refunds to shareholders who haven’t actually paid any tax?
Or were you aware that the federal government spends $1.8bn on Tafe and skills but forgoes $2bn a year because we let family trusts distribute income to family members tax-free or at lower tax rates?
Our pledge to tackle these tax expenditures means the Liberals can run a scare campaign against Labor. That’s a given that we were fully aware of when we announced the policies.
But if we are going to increase our investment in important public services in a fiscally prudent way, we have to recognise that many of the tax concessions that some people have been used to as an entitlement are no longer sustainable and need to be reformed.
And the only way they are ever going to be is by a government that has the courage to seek a mandate to do so.
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