Marginal seats the least affected by Shorten tax-grab plans

The impact of Labor’s multi-billion dollar tax grabs is not so prominent in the nation’s most marginal seats.

Opposition Leader Bill Shorten on the campaign trail in Victoria Park, Perth. Picture: Kym Smith

The impact of Labor’s multi-billion-dollar tax grabs on capital gains discounts, franking credit refunds and its pursuit of voters earning above $180,000 is not as prominent in the nation’s most marginal seats, analysis shows.

An analysis of 22 marginal seats across Queensland, NSW, Western Australia and Victoria reveals voters are less likely to earn enough to put them in the highest income tax bracket, less likely to pocket franking credit refunds, own investment properties, and are less likely to be over 65.

Investment bank Morgan Stanley said the only exception was the share of voters in marginal seats reliant on negative gearing.

However the difference was negligible, with marginal seats holding a share of taxpayers notching up a rental loss at 9.5 per cent, compared with 9.4 per cent for the rest of Australia.

Queensland accounts for the most marginal seats of any state, where 10 electorates are held on a margin of less than 5 per cent.

Morgan Stanley analyst Chris Read said marginal seats were less exposed to Labor’s tax reforms. These include maintaining steeper taxes on high income earners until the budget surplus is in a more sustainable position, grandfathering negative gearing for investment properties, halving the capital gains discount, and banning excess refundable franking credits.

Over a decade, the Labor reforms, if it can convince the Senate to pass the laws, will raise close to an extra $300 billion.

“Those demographics that have the potential to be directly negatively impacted by ALP policy change are under-represented in the marginal seats relative to their share nationally,” Mr Read said.

“We still expect the ALP will be able to pass the bulk of its policy agenda, as the typical pattern of Australian governments has been to negotiate in the Senate. The degree of compromise needed will depend on the strength of the majority, both in terms of receiving a mandate and also reducing the number of crossbenchers.”

The Australian has revealed voters living in Australia’s most exclusive suburbs face a “double-whammy” tax clampdown under a Labor government, with plans to cap deductions for managing tax affairs at $3000 aimed at the same people most vulnerable to his franking credit ban. Franking credits and high deductions for managing tax affairs are concentrated in Cottesloe, Toorak, Portsea, Point Piper and Palm Beach. There were 22 marginal seats at the last election. The Coalition won 19.