How people power put Labor’s franking credits policy to rest

Bill Shorten’s tilt at government was undone by Chris Bowen’s franking credits push. Picture: AAP

No one realised it at the time, but in Sydney on October 30 last year the ALP election loss was being planned by a remarkable group.

They were people who had come together as a result of Chris Bowen’s plan to end cash franking credits.

I was invited to speak and join the discussions. In that room was the community power that would play a huge role in preventing Bill Shorten being prime minister.

We are used to community power being exercised in the street with protests, or via massive media campaigns. Retirees don’t march in the street but they belong to connected organisations which enable them to become a massive political force if they are aroused.

When Chris Bowen devised the scheme to end cash franking credits, he convinced his leader Bill Shorten that this was an attack on the rich. My first reaction was that the rich would not be affected and that the ALP would therefore not raise the money it was projecting.

Then came the remarkable research by the president of the Self Managed Superannuation Fund Association, Deborah Ralston, who showed that up to 1.4 million people were in Bowen’s firing line and there were at least 1.1 million people who would be hit hard.

These people were not rich. Rather, they were battlers trying to self-fund their retirement and the average impost of $4,000 would be a big blow.

Suddenly I realised that with so many people being hit, the ALP would indeed raise the billions it projected, albeit not from rich people.

At the time Graham Richardson said that there was no way retirees could organise to fight.

I suspect Chris Bowen had the same view. But in that room there were 11 remarkable organisations with the databases and contacts to reach almost every one of those 1.4 million people.

Some organisations were regional, like WA Self Funded Retirees, or Gold Coast Retirees, but most were national bodies.

Not every one of the people due to be affected belonged to the organisations, but there were connections to members of Probus, Rotary Australia, and others. These organisations were not involved, but their members helped spread the word.

In my discussions at the meeting ,the associations bemoaned the fact that franking credits were “turn off” words that few understood. We had to find a new way of describing the Bowen measures. I had a not insignificant role in the selection of the title: “retirement and pensioners’ tax”. We put the word “pensioners” in the tittle because Bowen had a select group of government pensioners in the gunsights as well. To my mild annoyance, the Liberals reduced to the title to “the retirement tax” but nevertheless there now was a clear set of words that did not mention franking credits.

Politicians were involved at the October 30 meeting, including MP Tim Wilson and Assistant Treasurer Stuart Robert, and their roles would be important to give people the chance to use the political system. But it was the power of the databases and connections in the October 30 gathering that delivered at least a million votes to the Coalition. Many would say they would have voted for the Coalition anyway.

Wrong. Retirees were appalled at the spectacle of three prime ministers in three years and many had originally planned to vote against the Coalition.

When you have connected community groups, digital journalism is incredibly powerful because the articles are emailed around or put on social media. As is his right, Chris Bowen wrote articles that were very critical of my commentaries. What stunned me was that in one of them he actually counted the number of franking credit commentaries to that date: 17.

But I was just getting started. There were a lot more to follow. And when Bill Shorten said cash franking credits were a “gift”, the retired community went ballistic. And the rage doubled when they discovered many could avoid the retirement and pensioners’ tax by joining an industry fund. And when Bill Shorten attacked accountants, the retirees’ accountants added to the passion.

In many articles I kept showing Chris Bowen how, if he was unhappy about franking credits, he could levy the tax on a fair basis.

Retirees would have accepted that. Instead, he told the million-plus people in the firing line to vote for the Coalition if they did not like it. En masse that’s exactly what they and their families did. It will be a long time before politicians again take on the retirement community.