Anthony Albanese borrows from Kevin Rudd on spending

Anthony Albanese to invoke Rudd mantra and declare he will be a cautious spender as PM.

Opposition Leader Anthony Albanese. Picture: Flavio Brancaleone

Anthony Albanese will invoke Kevin Rudd’s “economic conservative” mantra and declare he will be a cautious spender if he ­becomes prime minister, putting an end to an era of high-spending promises from Labor.

The Opposition Leader will use a speech to the McKell Institute on Thursday to lay the groundwork for a more cautious approach to economic management, shifting from the tax-and-spend approach that led to Labor’s embarrassing election loss in 2019.

He will also use the speech to attack the government over its management of the aged-care system and demand next week’s budget include measures to improve treatment for dementia patients.

Referencing his childhood in a housing commission with a single mother, Mr Albanese will say that “money was always tight at our place”. “So Mum also taught me the value of a dollar,” he will say. “That’s why, when it comes to thinking about government spending, I am cautious. Labor will never leave behind those who need government support.

“But it is also important to recognise that government investment can produce a return through economic growth. That’s why investment in education and training spreads opportunity.”

Ahead of the 2007 election, Mr Rudd moved to smash perceptions Labor could not be trusted on the economy by calling himself an “economic conservative” and ­accusing the Howard government of being profligate.

This approach was jettisoned during the global financial crisis as his government spent big on stimulus packages which helped Australia avoid a recession.

After Tony Abbott’s controversial 2014 budget, then-Labor ­leader Bill Shorten made short-term political headway by opposing many of the budget cuts and launching a class-war campaign against the Coalition.

Labor went to the last election promising to spend an extra $14bn on schools over a decade­, as well as big-ticket health items, such as its $2.3bn cancer package and its $2.4bn dental care package. To balance the budget given its spending commitments, Mr Shorten proposed revenue measures — including crackdowns on concessions in franking credits, negative gearing and superannuation — that were easily weaponised by the Coalition and led to Labor’s surprise loss.

Mr Albanese’s first announcement this year was a promise a Labor government would make no changes to the dividend imputation system, while senior Labor MPs say he is also moving to drop pre-election plans to crack down on negative gearing concessions for property investors.

In a move that will upset some Left faction MPs, the change in ­approach will lead to lower spending commitments in health, education and social welfare.

However, Mr Albanese reiterated plans to increase funding for childcare and aged care.

The big debate to play out within Labor is whether the party will go into the election vowing to change legislated tax cuts for high-income earners, due to begin in 2024. Opposing stage three — which would flatten the top tax bracket to a maximum rate of 30 per cent for all workers earning between $45,000 and $200,000 — would give Labor an extra $130bn in its spending arsenal but leave the party vulnerable to accusations it wants to increase taxes.

Also in his speech to the McKell Institute, Mr Albanese will attack Scott Morrison for failing to act on the crisis in aged care sooner.

“He deliberately and callously chose not to do so,” Mr Albanese will say.

“Indeed, this government has received 22 reports into aged care in the past eight years and done little beyond cutting the sector’s funding by $1.7bn.”

Mr Albanese will demand ­reforms to dementia management, which affects half of aged-care residents. “Without comprehensive reform of the way we manage ­dementia we face a massive and continuing impact on the productivity of women, who are primarily the carers of ageing relatives,” Mr Albanese will say. “Next week’s budget should ­ensure that dementia management is core business for aged care.”

He will push for dementia care to be part of the formal training ­requirements for doctors, nurses and aged-care workers. He will also demand aged-care providers prove they can take care of dementia patients, as well as an upgrade to the building code to ensure ­facilities are dementia friendly.