Not to be outdone by Chinese communists sporting Five Year Plans, Bill Shorten has given us his:
It has six points:
Let’s go through each point.
- Labor is proposing to invest an extra $40bn in education over 10 years versus the Coalition baseline. The Coalition largely has this money earmarked for the company tax cut.
- Similar to Coalition.
- Labor’s decarbonisation plan is much better and cheaper than the Coalition’s if they proceed with carbon trading including government issued permits. The Coalition’s Direct Action plan remains virtually unfunded. On manufacturing, we need to improve competitiveness not just bail folks out.
- Similar to Coalition.
- Similar to Coalition.
- The major difference here is negative gearing reform. Labor’s child care proposal is to wind back the recommendations made by the Productivity Commission. A bad idea.
As a basic economic management blueprint the Labor “plan” is superior to that of the Coalition given that it:
- education investment will have a greater economic impact than corporate tax cuts that largely flow offshore;
- carbon pricing is far superior to paying polluters to close in terms of equity, efficiency and cost of the Budget assuming Labor uses it;
- scrapping negative gearing reform is a structural tax reform so vital that it cannot be overstated. It will permanently lower Australia’s interest rate price deck, land prices and currency, massively boosting competitiveness.
It is the tip of the iceberg but it is a solid start versus no start at all from the Coalition. The biggest risk is that it will all be ransacked as the Budget collapses given it is based on the fantastical PEFO.
Shadow Treasurer Chris Bowen has also basically given up on retaining the AAA ratings, from The Age:
Revealing the opposition’s budget timeline, Mr Bowen told ABC Radio: “Based on the government’s figures, we would get back to budget balance in the same year as the government, 2020-2021.
“Both the government and the opposition will have deficits over the [four-year] forward estimates, that is true. And it is true that we won’t have the same degree of fiscal contraction over the four years, but we will get back into balance in the same year.”
Mr Bowen said the Coalition’s four-year projections were based on a “fantasy” given they included billions of dollars in blocked spending cuts that are unlikely to ever pass the Senate.
By contrast, he said Labor will deliver a better budget bottom line over the decade by making long-term structural forms like scaling back negative gearing.
Mr Bowen said Labor would release its full costings, including its four and ten year budget projections, later in the campaign.
It’s all the way with more debt for both parties but Labor at least has the beginning of reform agenda that may turn that around eventually.
Full document.
