AFR vomits on the election

Mr Turnbull is going to the people on Saturday as the only political leader with both a genuine economic growth agenda and a commitment to reduce the burden of government rather increase the disincentives of higher taxation. The Coalition’s proposal to phase in a cut to the corporate tax rate from 30 per cent to 25 per cent during a decade would boost economic growth by attracting foreign capital and know-how and, according to the consensus of economists, fatten the pay packets of the workers Labor claims to represent. It is Bill Shorten’s class-based dismissal of this singular economic growth policy that defines Labor’s doleful populism. In an act of fiscal recklessness, by its own figuring Labor would deliberately add to the deficit during the next four years and threaten Australia’s AAA credit rating. And Mr Shorten’s promise of big surpluses in a decade rest on what Labor admits would be the highest tax take as a share of income in the nation’s history.

Worse still, Mr Shorten’s resort to crass populism and the outdated politics of class comes from a once-reforming centre-left party that has refused to free itself from the trade union and factional control that so defined the Rudd-Gillard years. Mr Shorten’s party is financed by the habitually law-breaking Construction Forestry Mining and Electrical Union.

…Australia’s fundamental challenge now is to avoid the political populism sweeping many other rich nations, just as it is to avoid the extreme monetary policy experiments employed by leading northern hemisphere central banks. Instead, Australia needs to rekindle its reformist recent past in transitioning from the resources boom to exploit the new phase of Chinese economic development, the upside of digital disruption and the reshaping of global supply chains. Rather than retreat into the politics of redistribution, capital-importing Australia needs to sharpen its incentive structures, recover its productivity growth and expand the nation’s income pie.

Come on, AFR, this kind of partisan rubbish does not serve the national interest. For instance, yes, Labor is wedded to the unions but:

• Labor’s negative gearing changes are a far deeper structural reform than Turnbull’s company tax cut;
• the former is the only policy in the election that represents an economic plan for the post-mining boom adjustment;
• the overwhelming majority of economists have condemned the tax cut and endorsed negative gearing reform instead. Representing it otherwise is a bald faced lie;
• if you want to avoid political populism arsing from inequality then, again, negative gearing reform is far superior to tax handouts for foreign shareholders, and
• why is Turnbull’s populism everyone else’s fault?

The correct framing for the election for any serious national business newspaper is the following:

• Australia faces a very deep and protracted post mining boom adjustment;
• the principle challenge is to repair Australian competitiveness and productivity, meaning sacrifices by both labour and capital;
• the Brexit phenomenon underlines that this must be by shared sacrifice or political instability will persist undermining policy;
• unions need to give ground on wages, big business needs to embrace competition, innovation and disruption to boost productivity;
• we need a structural tax reform agenda to boost productivity;
• all sides need to embark on fiscal repair not blame each other.

Both parties have failed this agenda but Labour is less distant from it than the Coalition, largely owing to negative gearing reform and a corporate tax cut that we cannot afford.

In the end it is the AFR that is as much the problem for Australia prosperity as is any political deadlock.