“Fuck business.”
No, that wasn’t Bill Shorten yesterday, that was the Conservative UK Foreign Secretary, Boris Johnson, when asked recently about business worries about Brexit and the likely departure from the UK of large corporations like Airbus. “Fuck business.” From a Tory. Cue outrage in the UK.
Shorten may as well have said the same thing though, given the gasps of horror that greeted his confirmation that — as was previously reported weeks ago by Phillip Coorey — Labor would roll back company tax cuts for medium-sized firms, with turnovers between $10-$50 million. Small business will keep their tax cuts, but around 14,000 businesses (or around 1.5% of businesses) will face a tax rise if Labor is elected and is able to pass legislation to roll back the tax cut threshold to $10 million. Cue outrage.
From a policy perspective, it’s a no-brainer. Capping the cuts at $10 million will regain most of the cost of the current, legislated cuts, which is just under $30 billion over a decade. Are there better uses of, say, $20 billion than as a windfall for medium-sized businesses? True, small and medium-sized businesses have greater difficulty borrowing or raising capital, so they’re more likely to invest the after-tax windfall than large corporations — as we’ve seen from the US, and as we’re seeing in Australia, large corporations will simply hand the windfall to investors. And as Saul Eslake has shown, it’s medium-sized firms, not small business, that have performed best in job creation in recent years. But even if 49% of businesses between $10 million and $50 million invest the windfall, it’s a poor result compared to, say, the infrastructure investment that could be funded by the government with the foregone revenue, or the extra nurses and doctors hired.
Politically, it’s anything but a no-brainer. Shorten continues the crazy-brave act, daring the government and the press gallery to throw everything they can at him, despite the apparent liability of looming byelections. Some of us are old enough to remember when the central charge against Shorten was that he believed in nothing but his own ambition. Now, apparently, he believes too ardently in a left-wing agenda. Labor’s broader gamble is that the old wedge politics of the neoliberal era are done with, that voters believe the economy no longer works for them and that being bribed with $10 a week of their own money while wages decline and corporations and the very rich rake it in isn’t going to cut it.
But which corporations? Certainly big business — one of the most toxic brands in the polity — along with politicians themselves. But small and medium-sized businesses are different. Australians identify more with them. In this week’s CEDA survey, respondents equated small and medium businesses with blue collar workers, “people like you” and themselves personally — and in dire contrast to large corporations, which they viewed as the prime beneficiaries of economic reform (and rightly so).
Maybe that’s all about small business versus big business — the local shop versus the giant corporation that leaves you on hold for an hour — and people don’t have strong views, or even a strong definition, of “medium business”. But perhaps this is where Shorten’s crazy-brave act finally comes a cropper. Somewhere between “fuck business” (perhaps, just as only Nixon could go to China, only a Tory can say “fuck business”?) and “small and medium businesses are just like me” is a line that Shorten may have crossed. We’ll see.
You won’t hear it from the press gallery, but voter disenchantment with business-as-usual — with the emphasis on business — still runs very deep.
Shorten has made a very smart political move, he can now go to an election with plenty of money to fund health, education and social services, he knows full well the voters want services restored and are willing to pay a fair tax to get it.
Why don’t we hear from the press gallery about voter disenchantment with politicians and business-as-usual? Is it because journalists are just brothers and sisters from another mother? Building voter disenchantment with business-as-usual led to the election of Trump. Politicians, and journalists, who ignore the phenomenon in Australia do us all a disservice.
Yet another piece focusing upon the politics of a policy rather than an actual solution (to be fair, Mr Keane did go to both places, he just questioned the wisdom of being honest). Cutting taxes is the same as cutting services and Australian voters have had a gutful of cutting services.
We have had five years of bending over for business and things have gone from bad to worse. Shorten is trying something different – he’s signaling to the public that Labor is returning back to the fold (snail pace for all that) and is that really a bad thing? Of course the Government media unit (Newscorp) will scream like a banshee, but is it Labor’s job to service the requirements of the big end of town? The Australian’s readership will never vote for Labor no matter how many speeches Albo gives about kissing the hand that wacks down the proletariat.
I say that for the first time in years Labor has given a clear policy choice and don’t be too sure that in next election the public will automatically fall in behind the LNP.
Well said, Nudiefish!
They need to change more to shift me from being a Greens voter. Refugee policy, encryption policy, two that I can think of off the top of my head.
Can you imagine an Australia where business doesn’t run government?
I agree that there is a great deal of dissatisfaction throughout the electorate. But politicians seem unable to identify the source of that dissatisfaction, or are at least not courageous enough to publicly identify it. In my view, the r>g phenomenom that Thomas Piketty so eruditely identified, exacerbated by the neo-liberal destruction of wealth re-distribution policies since the 1980s is the source of that dissatisfaction. Although most punters will not be able to articulate the Piketty argument, many know by observation and experience that the very rich are getting richer at an alarming rate and the rest of us essentially pay for that by getting poorer.
The party that articulates that problem and proposes solutions will accrue a great deal of political ‘capital’ (pun intended). But that will require great political courage in the face of the deafening inane claims of ‘class warfare’ and other puerile derisions from those who own the media and the channels afforded big business by the commercial media. At least Shorten and Labor are at last coyly pointing to the problem. Surely the torrent of evidence that big, and even medium sized, business cannot be trusted must be astutely marshalled by Labor and The Greens (The Hayne RC, the Dreamworld Inquiry etc etc). And the solution, I suggest, is Piketty’s solution – concentrate more on the taxation of wealth and less on the taxation of income. Yes, that will require a great deal of international cooperation for policies that effectively reverse the trends of wealth inequity to start to work. But all other developed nations are experiencing that same billowing dissatisfaction in their respective populations. And the international community has already demonstrated a deal of cooperation on attacking tax havens, albeit shocked into that by the Panama Papers etc. We just need a government here that understands the underlying problem and the energy to engage internationally on wealth inequity. At the very least, the political party that makes a go of it will attract a great deal of support here. Therefore, I hope Shorten gets a bit more ‘crazy brave’. In my view, he is at least heading in the right direction.