Labor has set out to win this election by resuming the class war it lost in 1949. Bill Shorten, like Ben Chifley, promises to relieve hardship with a wholesale redistribution of wealth between the haves and have-nots.
The Conservative Party vehemently opposed this pernicious socialism which is precisely why we need more Australian Conservatives Senators in the Senate to stop Labor’s rot. Vote “1” Australian Conservatives in the Senate.
The Australian reports, the costing of the opposition’s policies released on Friday raised more questions than it answered.
It did demonstrate two things, however. First, that Shorten and Chris Bowen have convinced themselves the government actually does have money of its own and that it does not depend, as we previously thought, on money collected from its citizens in taxes or borrowed on their behalf.
Second, that the claim that they will fund their schemes by taking from the top end of town was just a smokescreen. They plan to extract a mere $2.3 billion more from multinationals over the next decade, a rounding error compared with the $233 billion in additional income tax they plan to extract from middle and upper-income earners.
Sadly, even that won’t be enough to satisfy Labor’s spending plans. Which is why Shorten is going after the pool of middle-class savings most of us were putting aside for retirement.
Just when we thought the socialist genius for finding new things to tax had reached its limits, along they come with a new one.
Treasury has spent 20 years or more pondering the challenge that arises when the number of retirees rises faster than the number of income-earners.
Labor has found a solution to that: when the income tax base declines, you tax the retirees.
Labor’s new revenue stream is a sin tax on thrift.
By the middle of the fourth term of a Shorten government, it will have helped itself to $118 billion of our hard-earned savings. Another $58 billion will be swiped from our superannuation savings and pension funds by removing franking credits, and $30 billion will disappear from what Labor calls removing superannuation concessions, but what the rest of us call changing the rules to feed the government’s spending habit.
Another $32 billion will be extracted from investments in residential real estate intended by most to provide a nest egg for retirement.
Labor’s thirst for revenue, in other words, will be satisfied by taking from the middle-class, the people who strive for a standard of living above the average and practise the virtue of thrift to save for their retirements.
These were the people Robert Menzies set out to defend, the people in constant danger of being “ground between the upper and the nether millstones of the false war” between classes.
The triumph of the Australian middle class is a defiance of socialism. Successive governments of left and right have recognised the sanctity of the private home by declining to tax capital gains. Tax concessions extend to residential property investment through negative gearing and a 50 per cent discount on capital gains tax.
Investment in superannuation has played a part, though not as large a part as it might have done, had Paul Keating followed the example of most other countries by making deposits to superannuation funds tax-free as an incentive to save, and taxing the proceeds on the way out.
A Shorten Labor government will square the circle by taxing both.
A larger chunk is held in residential property, including 2.6 million investment homes owned, mostly, by middle-class people of modest means. Three-quarters of those who claim negative gearing earn less than $100,000 and almost a third vote Green or Labor.
The middle class, said Menzies, were envied, “by those whose benefits are largely obtained by taxing them”.
Never was that more true than today. Shorten’s so-called “fair go economics”, like Chifley’s vision of welfare, is that it pretends to be an exercise in redistributing money from rich to poor.
Its effect, however, is very different. It amounts to the expansion of an emboldened public sector at the expense of a dispirited middle class.