A Very Sophisticated Election
This is a very sophisticated election. This was typified by Labor’s costings that were released on Friday. As Labor leader Bill Shorten told party followers on Sunday, these were the best figures produced by an opposition in fifty years. This was mainly due to the Parliamentary Budget Office who produced the costings. PBS figuring provided Labor with the trifecta: higher spending; bigger tax cuts and larger surpluses. However, as excellent as it is, the Labor costings plan is not without risk. The Opposition refuses to release the assumptions that the PBO used to cost its policies in years 2 to 4 of what would be its budget. We can assume that it used the assumptions which Treasury adopted in the Pre-Election Fiscal Outlook but the Reserve Bank has cast doubt on these numbers and revised them down. For example, Treasury has assumed that wages will grow by 2.75% in 2019/2020 while the Bank forecasts that wages will grow by 2.5%. This 0.25% gap could make a big difference to the amount of income tax collected by the next government. There is also the threat that the Senate will not pass Labor’s special revenue measures: the franking credit cash refunds; negative gearing and the halving of capital gains tax concessions. We also don’t know what the PBS assumptions were about behavioural change on the part of people who are going to lose money because of the abolition of tax concessions. They could change their investment patterns which could mean that Labor comes up with a lot less revenue than predicted in their costings. The same risk applies to the Coalition’s budget but they don’t have the same baked in high levels of expenditure. If things go pear-shaped for a Labor Government then they will have to raid the surpluses. The Liberal Party launch was also very sophisticated. It presented Scott Morrison as a down to earth problem solver who addresses real life problems. His speech adopted a technique first used by Ted Kennedy when he ran in the Democratic primaries against Jimmy Carter. Mr Morrison talked of meetings he’d had with individual voters in marginal seats and the ways the Coalition had solved their problems. He also talked about his own background growing up in a house owned by an aunt, which she shared with his family and the fact that he attended public schools (he didn’t mention his stellar career as a child actor). This was all designed to counter Labor claims that he is associated with the ‘big end of town’ and to distinguish him from Malcolm (Mr Harbourside Mansions) Turnbull. His speech was an appeal to ordinary Australians who do not want the Government to dominate their lives. “I believe that Australia is a promise to everyone who has the great privilege to call themselves an Australian. It’s the promise that allows Australians quietly going about their lives to realise their simple, honest and decent aspirations,” Morrison said. “Quiet, hardworking Australians – an Australia where, if you have a go, you get a go. Where you’re rewarded and respected for your efforts and contributions.” Scott Morrison had an announcement for young couples wanting to buy a house. He said that a Coalition Government would guarantee the first 20% of a mortgage for couples with an income of less than $200,000 and singles with an income of less than $125,000. He also promised $4 billion to build the East-West link in Melbourne as well as money to combat peri-natal depression. Labor was quick out of the blocks to attack the housing announcement, which they described “as a desperate move” until they realised what a game changer it could be. They then announced that a Labor Government would introduce the same measure. Pinching your opponents policies while at the same time bad-mouthing them, now that’s sophistication.