Jumping at shadows

It doesn’t matter if it’s not true. Even the ABC is pretending like it is. “Having proven willing to take the political risk of breaking that promise,” the national broadcaster noted this week, “the government has now faced questions on whether it will move against other policies deeply loathed within some corners of Labor, but which the party committed to keeping at the federal election.”

This sounds like news, except it isn’t. Outside opposition briefings, there is no credible suggestion that the government is planning changes to negative gearing or to franking credits. The “questions” to which the ABC refers are a figment of Peter Dutton’s underactive imagination.

The Coalition is forever going back to elections it has already won. It would love if every three years a John Howard-shaped groundhog eased his way out of a burrow, shaking dirt from his eyebrows, and announced he would decide who came here and the circumstances in which they would come.

Failing that, the party would settle for the crude outline of Scott Morrison saying the Labor Party’s intention was to “tax you to death”. Even better if the leader’s name meant something like “bill”.

This is the fantasy now being indulged. The logic was made plain by Peter van Onselen, a contributing editor at The Australian: “Jim Chalmers all but confirmed on Monday that Labor will make changes to negative gearing when he categorically ruled out doing so. That’s what his word is worth these days.”

These words are the newspaper equivalent of telling your little brother to stop hitting himself. They are a family drive to Forster-Tuncurry. They perfectly describe the second-hand Ford Fairlane in which too much of this country’s political class is travelling.

According to the latest figures from Treasury, deductions on property interests account for more than $27 billion a year in forgone government revenue. A grift on capital gains taxes costs another $47.5 billion.

These numbers are central to the inequality that shapes this country. Negative gearing and the capital gains tax discount are the original sins in Australia’s housing crisis. Any reasonable government would be working to address them.

Instead, the opposition pretends Anthony Albanese might do something and that is enough to ensure he does nothing. For a week, every press conference is about a policy that does not exist – with the sole purpose of ensuring it never will.

When Labor lost the 2019 election, it turned its back on vital reforms to housing and investment income. The party marched back into meekness. It decided the only way to win was not to try. Last week, the party challenged this slightly. It fixed a foolish policy inherited from a foolish government.

Hopefully, it is a sign the government might now consider some of the structural issues in the tax system. Perhaps it might consider the thumb that sits on the scales of wealth in this country. On the evidence of this week, it is doubtful – although that doesn’t mean it’s not worth hoping for.

This article was first published in the print edition of The Saturday Paper on February 3, 2024 as "Jumping at shadows".

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