Voters instead, are embracing the Labor agenda which promises funding for schools, hospitals, education and training that will be fully funded from tax policy proposals that raise money in what economists call a progressive way – that is, increasing the tax take on those with high incomes and high wealth. Not giving tax cuts “to the big end of town” as Labor likes to say, by ending the tax distortion of negative gearing for those investing in established dwellings, reducing the capital gains tax concessions and getting rid of excessive dividend imputation refunds raises a lot of revenue and does it in a way that reduces inequality.
And voters can see this.
They demonstrably like this approach.
The Labor line that pitted “tax cuts for banks and big business versus funding for schools and hospitals” is no socialist plot as some of the more extreme commentators suggest. Rather, it is giving the electorate what they desperately want for their families in a world where job security, genuine cost of living pressures and incomes growth are increasingly fragile. The policy contrast could be phrased along the lines of what’s the point of having a globally competitive company tax structure if a significant proportion of the population can’t get decent health care, or their kids don’t get great teachers, or are left without an opportunity to pursue a trade or are saddled for a mortgage-like student debt when they finishing the university degree?
It all boils down to the fact that voters are switched on, they do listen and they vote in a way that will best enhance the key aspects of their lives.
In other words, voters only want access to services that make their life better. This is even if they have a pay a bit more tax or miss out on the opportunity to negatively gear an investment property, can’t get huge refunds on holdings of shares that pay fully franked dividends or fiddle their affairs to pay less tax via capital gains.
Labor recognise this and it is why it remains a hot favourite to win the Federal election. It is not clear what the Government can do to change its policy strategy of the last few years without further compromising its credibility.
And when you stop and think about it, what’s wrong with voters wanting good schools for their kids, good health care for their families and a more rapid move to a budget surplus, all paid for by a more progressive tax system?