Safeguard taxpayer money, even during a pandemic

By making himself a small target, especially on taxation, Anthony Albanese has shrewdly avoided the mortal damage Bill Shorten and Chris Bowen inflicted on their doomed high-spend, high-tax campaign to win office in 2019. Frustrated by the lack of opportunities to score easy points from Labor, Finance Minister Simon Birmingham has had his calculator out to tally up what the opposition’s pandemic policies would add to the nation’s record deficit. It is pure political campaigning.

But attacking each other’s costings is legitimate at this stage of the electoral cycle. Judging by the figures reported by Geoff Chambers, Senator Birmingham’s exercise was worthwhile. The spending initiatives called for by Labor would have cost taxpayers an additional $81bn and increased the nation’s already record deficit by 20 per cent. It is more concerning that the party’s calls for free rapid antigen tests for all and $300 vaccine incentives, including for those who were already vaccinated, suggest that Labor, despite the admirable discipline imposed on his colleagues by the Opposition Leader, has not lost its taste for big-spending, government-centred solutions to the nation’s most serious challenges.

The government calculates that free RATs for all would have cost taxpayers $5bn. The $300 handout to encourage vaccinations would have cost $6bn – for nothing. In early August last year, when Mr Albanese proposed the payment for every citizen and resident who would be fully vaccinated by December 1, 41.9 per cent of adults over 16 had received one jab and 20.24 per cent had received two jabs. By December 1, the figures were 92.5 per cent and 87.2 per cent respectively. Australia’s vaccination rates, as Senator Birmingham says, show “how wasteful this policy would have been by getting double dosed for the right reasons without the need for a Labor cash splash”.

As opposition frontbencher Andrew Leigh has done, Labor is entitled to attack the Morrison government over billions of dollars in JobKeeper payments that went to companies with revenue that was going up, not down. The impact of that criticism is blunted, however, by Labor’s arguments that JobKeeper should have been expanded and extended. Doing so, government figures show, would have cost taxpayers an additional $45bn. Extending the coronavirus supplement to December last year, which the government ended on March 31, would have subtracted another $25bn from the budget bottom line. As temporary welfare payments were wound back during the pandemic, Labor, the welfare lobby and unions tended to argue such action was premature and unwise. The Australian consistently argued for temporary, proportionate spending support.

From an economic perspective, scrutiny of parties’ spending records, promises and taxation policies is one of the most beneficial aspects of robust election campaigns. It is something voters should expect to hear more about as the federal election, due by the end of May, draws nearer. Judging by the opposition’s febrile reaction to Josh Frydenberg during question time on Tuesday, delving into such records, even from long ago, can be unwelcome. While noting that Mr Albanese supported the raft of new taxes on retirees, housing investors, superannuation and business at the 2019 election, the Treasurer also said Mr Albanese, at an earlier Labor conference, had moved a motion in favour of death duties. He quoted Mr Albanese telling the conference: “I am pleased to move this resolution, calling upon the government to consider the imposition of an inheritance tax.” The ensuing argy-bargy brought question time to an end.

The welcome surge in jobs and tax receipts has lopped $24.5bn off this year’s deficit, but debt levels are on track to exceed $1 trillion, as Chambers writes. If the AAA credit rating is to be retained, both political sides should make fiscal discipline the hallmark of their election promises and avoid the idea of raising taxes.