Gillard could win by raising taxes

Professor Dennis AltmanProfessor Dennis Altman

First published on The Conversation on 28 March, 2013.






It is ironic that just as our politics become increasingly presidential, so too do the two contending party leaders become increasingly unpopular. Indeed, both parties increasingly campaign as if the choice for the future of Australia was a totally negative one, with Liberal attacks on Gillard and Labor’s campaign increasingly centred on keeping Abbott from becoming prime minister.

It is hard to think of a more limited view of what politics are about, or indeed a better reflection of why more and more people are disillusioned by mainstream political debate.

Let’s assume the Labor caucus are not prepared to take the Rudd gamble, on the perfectly sensible assumption that one does not undo one stupid decision by making another. In retrospect, Rudd should not have been knifed, but the lessons from New South Wales are that another change of leader may lead to a short-term bounce in the polls, but cannot save a government.

Rather than spending a week in the Rooty Hill RSL, which suggests the prime minister has forgotten her insistence that she is governing rather than electioneering, Gillard might have a long talk with President Obama about his successful strategy for re-election.

The lesson Gillard might take from Obama’s victory was that he won by defining a sharp policy divide between himself and the Republicans. He was not afraid to adopt both economic and social policies that, in American terms, were clearly progressive.

Gillard might claim she is doing this through some undoubtedly good policies but when it comes to rallying the Labor base she has fallen into the trap of focusing on unions at a time when less than 20% of Australian voters are union members. In a recent speech to the AWU a, the prime minister claimed the party was neither progressive nor a social democratic, but rather one based on a continuing link to the labor movement.

But many of the reforms of which Gillard is proudest are, in fact, progressive and social democratic, such as support for community service workers and plans to increase funding for education. To link the party so closely to the union movement is to make it harder for Labor to persuade a majority of the electorate that they do, indeed, represent the interests of all Australians.

The Liberals, too, are talking about new government initiatives. Tony Abbott has attacked Labor for not doing enough to relieve traffic congestion in the very suburbs in which she plans to spend next week. In both cases, the obvious question is how can the government pay for a plethora of popular reforms, whether these be for schools, hospitals, national disability or infrastructure.

Barack Obama responded to a similar question by focusing on the extraordinary perks of the American tax system for the very rich, and took head-on the Republican insistence that nothing justified tax increases of any sort.

Maybe Labor needs to do just this: while our tax system is not as absurd as the American, there are extraordinary perks for the wealthy through superannuation arrangements. And as the Greens have pointed out, elements of both the mining and carbon taxes effectively reward polluters and major corporations.

But every time Labor has tried to raise these issues, as Wayne Swan has done on several occasions, they retreat in confusion at the first cries of class warfare from the opposition and the Murdoch press.

Perhaps Gillard’s only option now is to spell out in a series of unambiguous statements the reality that if we want better schools, better health care, better public transport and a fair go for the least privileged, this will mean paying for them, reversing a twenty year cycle of assuming that we can simultaneously lower taxes and improve services.

Labor risked forfeiting the debate on greater social justice and equality with their now abandoned commitment to a budget surplus. Now they need go further and spell out the real costs of their vision for a fairer society, and how this can be paid for.

Were they able to do so they, like Obama, they would highlight the reality that their opponents are more committed to protecting the perks of the wealthy than they are to a better deal for most people.

There would, of course, be the predictable outcry from the well organised interests who carefully ignore the fact Australia has lower taxes than most comparable societies.

But at least it would allow Gillard to create a real point of difference between Labor and her opponents on the right, and, even, perhaps, to dispel the deeply held belief that politicians will only say what their most immediate audience wants to hear.

Dennis Altman is a Professorial Fellow at La Trobe University and Director of the Institute for Human Security.