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In drawing up its plans for the election, Labor gave up on looking for policies to offset spending. Neither side is pretending it has a plan to pay for what it promises. By Mike Seccombe.

The inside story of Labor’s election promises

Labor leader Anthony Albanese campaigning in Cairns earlier this month.
Labor leader Anthony Albanese campaigning in Cairns earlier this month.
Credit: AAP Image / Lukas Coch

To start with, there were 150 policy announcements: $100 billion in spending commitments to be rolled out over 10 years and a complex set of tax changes to pay for them. The Labor Party’s pitch at the 2019 election was the most ambitious since John Hewson’s Fightback! package in 1993.

The result was the same, too. Like Hewson, Bill Shorten lost what should have been an unlosable election. Labor’s primary vote in both the senate and house of representatives fell to its lowest level in at least 30 years.

In the report prepared by party elders after the loss, Labor posed the inevitable question: “Does this spell the end of big, bold policy platforms?”

The answer arrived at by the review’s authors, Craig Emerson and Jay Weatherill, was essentially yes.

 

Their report found several factors contributed to Labor’s loss, among them an unpopular leader and “a weak strategy that could not adapt to the change in Liberal leadership” to Scott Morrison. The big one, however, was simply that the party promised too much.

“The sheer size, complexity and frequency of Labor’s policy announcements” before and during the 2019 campaign “had the effect of crowding each other out”, they wrote. Emerson and Weatherill advocated that the “nature, size and breadth of pre-election policies should be carefully considered ahead of the 2022 election”.

The authors did not specify which promises should be junked or which “signature policies” should be retained; but their report made it abundantly clear a big-spending and particularly a big-taxing campaign should not be repeated in this election.

Emerson is happy to see the extent to which the advice has been heeded by the party and its current leader, Anthony Albanese.

We have yet to see all of Labor’s policy announcements or their full costings, but it’s clear the party has reduced its spending commitments, sharpened its messaging and narrowed its focus. It is campaigning on a smaller number of social policies and quality-of-life issues, foremost among them health, education, aged care, childcare, climate and environment. It has given up on major economic reform.

The tax changes proposed in 2019 – winding back negative gearing and capital gains tax concessions and closing the loophole on franking credits – were widely endorsed by economists and civil society groups concerned with growing wealth inequality. Those policies were among the first to be abandoned.

This was done on instinct. As Emerson tells The Saturday Paper, “We couldn’t find evidence that any individual tax measure cost Labor the election. It was the size and complexity of the whole taxation and spending deal that was put in front of the people that was frightening.”

Yet the curious thing about the results in 2019 – and it is key to understanding Labor’s policy emphasis in 2022 – is the demographics of those who were frightened and those who were not.

The relatively well-off were not scared. Electorates with larger numbers of people receiving franking credit refunds or making use of negative gearing on properties, who would be negatively affected by the changes, swung to Labor. So did electorates with a high proportion of tertiary-educated voters earning more than $100,000 a year. Inner-city seats in general swung to Labor.

Among the groups where Labor lost votes, the review found, were those living outside cities or in coalmining communities, or those who were members of ethnic communities, practising Christians or Queenslanders.

Most concerningly, the ALP continued to lose support among a section of its traditional base of “lower-income … economically vulnerable workers living in outer-metropolitan, regional and rural Australia [who] have lost trust in politicians and political institutions”.

Political scientists politely call this group “low-information” or “low-engagement” voters. They are essentially the same cohort who swung to Donald Trump in the United States, to Boris Johnson in Britain, and to right-wing populists elsewhere in the world.

The political right has benefited hugely by frightening these voters, and the Morrison Liberals made easy meat of the ALP’s tax policies. The proposed franking credits reform was effectively described as a “retiree tax” and the Labor leader proposing the broader tax reform plan was labelled “the Bill you can’t afford”.

The Coalition parties not only campaigned relentlessly against the tax proposals Labor was putting up, but also, dishonestly, against tax changes Labor was not proposing, such as a “death tax”.

In the end, it was just too confusing for the low-information voters, and they decided no change was better than change they didn’t understand.

The frustration, says one Labor frontbencher, is that “the scare campaign worked against Labor in seats where people had the least to lose by the new taxes and most to gain by the promised spending”. In summing up, he says: “It wasn’t a rational backlash.”

This election, the party is proposing just two easily understood tax changes. The bigger one, announced this week, is to raise some $1.9 billion by closing loopholes used by multinational companies and to make them pay a minimum 15 per cent tax rate. The other change is a cut, to make electric vehicles cheaper.

These are seen as changes the Coalition cannot misrepresent. Voters don’t like multinationals. When it comes to electric cars, attitudes have changed a lot since the last election. Labor’s belief is that the kind of scare campaign Morrison fomented last time won’t fly again. People now know EVs will tow your boat and are cheaper to run, as well as being a major part of the necessary response to climate change.

In fact, climate is one of the areas to which Labor still plans to commit serious money, although none of the 26 priority policy areas listed on Labor’s website is headed “climate change”. Instead, it comes under the heading of “powering Australia”, and the emphasis is heavily on the economic, rather than environmental, benefits of more renewable energy.

The big-ticket item is a $20 billion low-cost financing scheme to build new grid infrastructure, which Labor says will spur $76 billion in total investment, create 600,000 jobs and reduce average power bills by $275 a year by 2025.

“Power is very big. We spent a lot to make sure the numbers were rock solid,” says a shadow minister. “We don’t normally commission modelling from opposition. But we decided it was important to do that, just in order to have had something that was unimpeachable.”

It was considered necessary after the last election, where the government produced modelling claiming Labor’s emissions reduction targets would cost average Australians money. The modelling was later comprehensively debunked, but only after it had done its work.

While Labor has slightly reduced its emissions reduction target this time, from 45 to 43 per cent by 2030, it has set out a more detailed plan for achieving it, including a gradual reduction in the amounts of greenhouse gases major businesses can produce. Importantly, most of the business community is supporting it and the policy is an extension of the so-called “safeguards mechanism” put in place by the current government. Both factors make it hard to credibly attack.

At the last election, Labor suffered by attempting to deliver different messages to urbanites concerned about climate change, and regional voters, particularly in Queensland, concerned about their jobs.

This time, the message is consistent: Labor will support fossil fuel projects so long as they stack up economically. It is an assurance reliant on the likelihood that the private sector will not finance new coalmines. No doubt it’s a bit of a cop-out, but it might placate voters in coal seats.

“But we actually don’t need the coal seats to win,” says one shadow minister who worries that Labor is lagging behind public opinion on the necessity of more aggressively addressing climate change.

To prove the point, this frontbencher suggests drawing a series of circles out from the GPO of all major Australian centres. “Our vote is going up in the first 20 kilometres. If we can hold our vote in the 30- and 40-kilometres radiuses, we win on the back of Brisbane, Sydney, Melbourne, Adelaide, Perth.”

Straddling the divide between inner-metropolitan voters and the rest has been increasingly tricky for Labor over time. The party is pulled left in the cities by the threat of the Greens, and right elsewhere by its traditional working-class base. The Emerson–Weatherill review found that in the period 2016-19, Labor enjoyed a swing to it after preferences of 1.12 per cent in inner-metro areas, and a swing against it everywhere else, growing bigger with distance.

However, that is only part of the demographic picture of a country that is increasingly fractured politically.

Data compiled by the Australian Election Study, which has analysed voting behaviour since 1987, showed that in 2019 electors were “more divided than at any other point on record”, says University of Sydney political scientist Dr Sarah Cameron.

Men were 10 percentage points more likely to vote conservative than women, a big change from a couple of decades ago, when women tended more conservative. While younger voters have always tended further to the left than older ones, that division has become far more pronounced over recent cycles, Cameron says.

In 2019, three-quarters of Coalition voters identified an economic issue as their top priority, while “for Labor voters that issue of priorities was split between health, at 32 per cent, environment, at 29, and economic issues, at 25 per cent”.

Cameron’s colleague on the study, Ian McAllister, professor of political science at the Australian National University, points to a couple of other findings relevant to the coming election.

One is that people born since 1980 are not only “very strongly centre left” compared with previous generations, probably because of their high rates of tertiary education and connections through social media, but also more likely to carry their progressive politics into middle age.

A second is that while an increasing proportion of voters – about two-thirds – say they make their voting decision after consideration of the parties’ competing policies, “what we see not just in Australia but across the world is that people just don’t see all that many differences between major political parties”.

His third observation is that for the past three elections, “people feel pretty badly off economically, and they feel that the government’s not going to be able to do very much about it”.

Assemble these demographic pieces, and it explains a lot about the current election campaign. It suggests, for example, why Scott Morrison is so often kitted out in high-vis and a hard hat: he’s reinforcing the bloke vote. It also helps explain why he loudly endorsed the views of some transphobic Coalition candidates: they reinforce his commitment to the conservative Christian and ethnic vote.

On the Labor side, it explains why some relatively small improvements to Medicare are at the top of its list of policy priorities, along with cheaper childcare, reforms to aged care, and more funding for schools, TAFEs and universities.

Labor is seeking to reinforce its advantage with female voters. As McAllister and the data attest, it is women who are more likely “to be concerned by aged parents, or the education of children, childcare … or going to the doctor, those sorts of things”.

Events, too, have conspired to undermine the government’s traditional advantage on economic management. As one former senior minister notes, Labor does not have to fear attacks about the cost of its policy offerings.

“What’s changed between [the last election] and now is that they can’t generate the same hysteria about budget deficits,” he says. “They can’t get the same sort of traction because they’ve sent the budget deeper into deficit and debt than anyone ever contemplated. So, it’s a completely different discussion from three years ago, as it is everywhere else in the world.”

A senior campaign source is honest enough to concede that at some stage the issue will have to be confronted but, for now, he says: “They’re not offering any revenue measures, and neither are we.”

“We’ve deprived them of their major scare campaign, and we’re going to get on with winning an election based on Labor principles about jobs, industrial relations and climate change.”

Inflation, the Australian Bureau of Statistics told us this week, was 5.1 per cent over the past year. This is roughly double the rate of wage growth and well above the 2 per cent to 3 per cent range the Reserve Bank deems acceptable. It will now increase interest rates, possibly as early as next week.

The government’s excuse that the inflation is caused by global forces might be largely true, but it only reinforces the perception identified by McAllister that the government does not actually wield much power.

Of course, this affects all Australians, but some more than others: renters, young people trying to buy a house, those with little bargaining power in employment, young families and women, and people on fixed incomes are disproportionately impacted by increases in the cost of living.

Inflation on non-discretionary items such as food is much higher still. This is a major focus for Labor’s campaign, because it speaks to a group that the party needs to win.

Who are doing the grocery shopping in most households? Women.

Who are more likely to work in the broken aged-care system? Women.

Who make up the majority of underpaid teachers? Women.

Who fill the majority of insecure jobs? Women and young people.

Which party has the more ambitious plan to address these issues? Labor.

The ALP is traditionally more trusted on industrial relations and therefore more credible in its promises for wage growth – including unequivocal support for any Fair Work Commission determination for more pay for aged-care workers and promises to amend the Fair Work Act to make job security a consideration and to make underpayment of workers a criminal offence.

When asked his priorities a couple of weeks ago, Morrison counted them off on his fingers: “Jobs,” he said, five times. But the issue for people struggling with cost-of-living pressures is pay.

As Labor reminds the voting public at every opportunity, it has learnt the lesson of the 2019 election. There are now fewer messages, repeated more often.

“Last time around,” says one shadow minister, “we were announcing things and then we were kind of moving on to the next thing after a few days, whereas this time you can expect aged care, childcare and those other core messages to be perennials.”

The other “perennial” of this campaign is accountability. Labor is targeting the widely perceived Morrison traits of shifting blame, going missing and refusing to accept responsibility for mistakes. Core to that, it is focusing on the government’s broken promise to establish a national integrity commission.

It’s all part of the small-target strategy, says a shadow minister. “Sure, we’re not offering them a big-policy vision. But on the other hand, if we keep this election as a referendum on Scott Morrison, we get in, don’t we? The strategy pays off.”

It’s not that Labor has abandoned its values, he says; it’s that it is determined that it should not become the issue.

The risk, he says, is that something happens that makes Labor the issue, such as Albanese’s day one stumble over the jobless rate, only worse, or it happens in the home straight.

“Then,” he says, “people might be tempted to say, ‘We don’t like Morrison, but we don’t know what the other guy stands for.’ Then the small target backfires.”

So far, however, it all seems to be breaking Labor’s way. Even Albanese’s forced absence from the campaign trail due to Covid-19 has, in the view of Labor, not done any great harm. It has allowed others in the team to shine, notably campaign spokesman Jason Clare and shadow Foreign Affairs minister Penny Wong.

We’ll know in a few weeks, but the indication right now is that Labor remains well on top. The cut-through slogan of this election is that everything’s going up except your wages.

As Craig Emerson says: “My sense is that the Australian people are up for changing the government. Now they just want to be reassured it’s a safe change.” 

This article was first published in the print edition of The Saturday Paper on April 30, 2022 as "The inside story of Labor’s election promises".

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Mike Seccombe is The Saturday Paper’s national correspondent.

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