You could feel the disappointment at The Australian yesterday, when it was forced to report that the scare campaign against Labor’s proposal to end the franking credit refund rort had failed to register with voters, with opposition to Labor’s proposal falling four points to 48%.
The fall is not much bigger than the poll’s margin of error, so let’s just say there’s been no shift in voter sentiment on the issue either way. That will disappoint both The Australian and The Australian Financial Review, which have been running aggressive campaigns against Labor’s policy. Of course, both newspapers are normally to be found savaging taxpayer largesse to the undeserving, but retirees, especially well-off retirees, make up much of the readership of both, so their campaigns are entirely understandable.
The Liberals, too, have been aggressively campaigning against Labor’s policy, complete with a taxpayer-funded parliamentary inquiry into Labor’s “retiree tax”. Tim Wilson’s remarkable bungling of the inquiry has, of course, been discussed in painful detail by the Nine papers.
There are other reasons, however, why the campaign, in the words of The Australian, “has yet to resonate”. Much of it has been conducted over summer, when voters are paying even less attention to politics than usual. Presumably that will change, especially as the election nears — although bear in mind that even then, great swathes of the population will have no interest in the election.
Then there’s the demographic problem. According to Newspoll, 59% of over-65s oppose Labor’s policy, as do 50% of over-50s. This compares to Essential Report data from March last year, which showed 46% of 0ver-55s opposed the policy. Below 50 years, voters are either evenly split or, if they’re younger, support Labor’s policy — both Essential and Newspoll had 41% of 18-34s supporting the policy.
So, not surprisingly, opposition is strongest among older voters. But there are many kinds of older voters — some benefit from the current rort, many do not. Essential found just 14% of people received a handout under existing franking credit arrangements — 15% received a tax deduction (i.e. they own shares but also pay tax on their other income) and 64% received nothing at all. And, yes, actual beneficiaries of the rort are unhappy about Labor’s proposal: 65% of those receiving a handout (i.e. the 14%) oppose Labor’s policy. But only 23% of voters who don’t get the handout oppose it.
So — bearing in mind that Essential data is around a year old, although Newspoll suggests things haven’t changed significantly in recent months — for the scare campaign to bite, either people who don’t benefit from the rort have to get angry about it, or the 35% of people who benefit from it but who don’t object to the policy have to be convinced to change their minds. And the campaign isn’t finished at that point — then it has to convince people to change their vote, not just their minds.
That’s where it gets more difficult: Coalition voters are already opposed to Labor’s policy — 47% object to it. In contrast, 17% of Labor and Greens voters oppose it, and 32% of “other” voters. It’s the non-Coalition voters who don’t like the policy who have to be convinced by the campaign — they already think it’s a bad idea, the trick is to shift their voting. And how important is the issue? Important enough to shift votes? If they’re some of the 14% of people who actually benefit from the rort, maybe. But it’s probably a fair assumption that if you’re part of the 86% of people who don’t benefit from the rort currently, you’re unlikely to shift your vote on the issue.
So, the campaign has to target a small demographic: Labor and Greens and “other” voters who currently benefit from the rort and oppose the policy, and encourage them to shift their vote, and those who don’t object to the policy even though they benefit from it, and swing them to opposing the policy enough to change their vote.
Even if that happens, there’s the problem that these older voters are normally in Coalition-held seats anyway: the ten seats with highest proportions of over-55s, according to Electoral Commission data, are Lyne, Gilmore, Hinkler, Wide Bay, Cowper, Richmond, Flinders, Page, Mayo and Mallee. Labor certainly has its sights set on Gilmore and might dream about Flinders, although it is more likely to envisage Julia Banks taking that with Labor preferences.
Most of these seats are more likely to come under threat from independents (Mayo is already held by Rebekha Sharkie; Rob Oakeshott is having a tilt at Cowper) than Labor. But it is possible the issue could cause trouble for Labor in Lyons and Braddon in Tasmania — they’re 15th and 16th on the list of seats with the highest proportion of older voters.
The scare campaign could yet bite Labor — if it is maintained all the way to the election, if it hits the right sub-demographic, if it is effective enough to elevate what is a minor issue for all but the recipients into a vote-shifter. But the result is more likely to be that it shores up the Coalition’s vote in seats which were mostly out of Labor’s reach anyway. It’s an interesting political experiment being conducted in real time, and will be fascinating to watch.
This just proves what a bunch of idiots are in the current Coalition. Focusing so much energy & attention on a policy that impacts a rapidly decreasing percentage of the voting age population, whilst utterly ignoring the tens of thousands of 18-30 year old voters who joined the electoral roll to participate in the SSM Postal Survey, is tantamount to electoral suicide.
Given the ALP’s inability to explain any of it’s regular backflipping into the neoliberal policy swamp, the only threat to this policy trinket is whether or not the extreme conservative rabble can get their shit together.
This ‘scare campaign’ demonstrates the banal veniality of modern politics. The Libs are attempting to scare people with an outright lie to preserve a payment that they can’t even defend on any logical ground. The same dishonest tactics will be rolled out in respect of winding back illogical negative gearing and capital gains tax relief. The logic of negative gearing is that if you can afford a 2nd house then all those who cannot must subsidise your patently poor investment. But one the snouts are in the trough, it is an outrage apparently to remove the trough.
That’s what annoys me most about this. The only way they can make this sound scary to the general populace is by lying and misleading people into thinking that this affects “poor retirees” and is a new “tax” rather than just ending a handout to rich people. The fact alone that this is how they’re trying to sell it should be reason enough to not trust the Liberal party with running government.
‘..those bloody Socialists ! First it’s changes to negative gearing and CGT that’ll hurt Mums and Dads , now they’re after Grandma and Granpa’s franking credits. They don’t respect family, let alone family values. Heathens !’
Hey Mac – you’ve just given the bastards a poster!
I am getting tired of working for a living AR, ya reckon I could get a gig at Hate Radio with that sorta spiel ?
Of course the coalitions campaign against franking credits has no momentum, would you put a boy scout in the lead tank to invade Poland if it was a battle you must win, of course not, you would put the best man you had available, but this political rabble puts Tim Wilson in charge, totally out of his depth, with minimal experience in political tactics and virtually no knowledge of the subject he`s prosecuting and of timid political nature he was all ways destined to fail, shorten has out thought and out fought this rabble from day one, got rid of Abbott, Turnbull and now Scomo yet these coalition clowns continue to under estimate him on a daily basis.
Saugoof, sadly, like Wilson you don`t understand the franking credit issue either, it does only impact on low income retirees because a couple under $80,000 P/A do not pay tax, these people have worked and saved hard to fund their modest retirement by going with out during their working lives while paying their taxes for many years and in doing so save the tax payer the cost of a couple of aged pension payment throughout their retirement lives, say a couple retires on a combined aged pension of $35,000 P/A and lives 10 years, thats $350,000 even more if they live longer, so the self funded couple save the tax payer that amount, not to mention the savings on health care if they are able to maintain private health cover, a typical self funded couple on a combine income of $45,000, will lose $12,000 P/A if these franking credit change are passed, hardly a millionaires income, they will be then forced to sell down income producing assets, probably at a loss, to draw down money to supplement income and pretty soon forced onto a part or even full pension, thereby becoming a cost to the taxpayer, not a saving while the wealthy retiree still maintains his franking credits, and remember, these franking credits are paid by the company not the government, most European countries allow all retirees including self funded or superannuation retirees to get the aged pension and super, including Britain, and our politicians driving these proposed changes are able to not only receive their generous taxpayer funded pensions and associated other benefits but they can work and receive other income as well, so I suggest you and others ignorant of the real facts on this matter forget your greed and resentment of ordinary people looking after their retirement and focus on the real issues facing this country, E.G climate change and political corruption for starters.
As a tax law lecturer told us at Uni, the only logic in tax law is the government needs revenue and it will get it somehow. But it stretches credulity to accept that if you pay no tax, you can still get a refund. This sort was started by Howard and never made sense although in the early days of the rort, the impact on government revenue was minimal. Then our ethical financial advice industry got on to it and tipped many clients into high-dividend shares. The low income self-funded retirees this will adversely effect will, in my view, just have to cop it and if that makes their self-funded retirement unviable, they get a part pension. And Brian, it is material – >$3b cost over the forward estimates.
Well, it really depends on your definition of “pay no tax”. The whole point of dividend imputation is that tax paid by the company is imputed to be _your_ income, so these low income retirees _have_ paid tax – the company has paid it on their behalf, so IMO.
Chris Bowen the other day made the nonsense argument the other day that if all the shareholders in Telstra etc were retirees, then Telstra would pay no comany tax. Which is actually fine, the tax is paid in the hands of the shareholders. It’s no different to a company paying all it’s earnings (and therefore no profit) out as wages – no company tax (wages are a cost), but tax is paid in the hands of employees.
In my view, all dividends should be untaxed, and tax should be paid in the hands of shareholders. Dividend imputation is actually a rort for the rich who pay tax on their dividends at the company tax rate and not their personal marginal tax rate.
I am certainly one of the older voters being in my late seventies that do support the Labor policy on this completely stupid company tax rebate being refunded to shareholders. It was brought in by the Howard/Costello gang of wealth transferrers to the rich & it is quite frankly bad, bad policy. Also it makes company tax look a joke to the companies that do pay tax when it is handed back to individuals.
country guy, methinks thou play loose and fast with the truth, clearly you either are ignorant of the facts on this franking matter or just a rusted on party member/staffer who will believe anything their masters tell them, sadly these poor ignorant people exist on all sides of the political fence, unable to think for themselves and their cranium space filled on a daily basis with party propaganda, political party hacks do nothing to promote their parties and are simply party hacks who only preach to themselves, the candidates members that are the future for our system are the ones that will not always follow the party line but speak up for, and represent the views and needs of their constituents, labor has a once in a lifetime chance to be the true party of and for all the people, but if they blow it, like the liberals/nats have, then they will slowly and surely, seat by seat, be replaces with true independents, this franking credit issue is simply a copy of coalition dirty tricks to divide the voters by creating a group of people to hate to turn voters off the real issues confronting all of us, and country guy, dont bother trying to convince me of your bona fides as I think I have you well and truly worked out, as a labor member/ worker of many many years I have upset both the left and right of the party, met most of the past federal leaders and worked on many elections state and federal and frequently opposed party lines on a matter of principle so personally, I dont really give a stuff who I offend if I think they are politically ignorant, or just plain stupid or morally wrong, and this policy covers all of those.
I’m not convinced the scare camping is directly about shifting votes. It serves two other purposes:
1. It animates the Liberal base – older, wealthier people – to donate money to the Liberal Party, which they desperately need;
2. It relagtes the daily procession of Liberal cock-ups and own-goals to further down the headline list.
2. Doesn’t this whole fiasco count as its own, quite sizeable, cock-up?