Jack the Insider: Labor’s perfectly good GST scare campaign wasted

You have to feel for Bill Shorten. The nation’s favourite whipping boy thought he had at last backed a winner.

The Turnbull government would go to the election proposing a GST hike from 10 to 15 per cent and possibly also broadening the direct taxation base to include fresh foods.

It must have seemed like a gift from the political gods and there’s no doubt Shorten felt he was back in the game. Alas, that gift has been rudely snatched away and now he’s only got his sparkling personal charisma to get him through an election year.

The good news is our supermarkets and green groceries are safe from Shorten stumbling around, glad-handing fruit and veg and making painfully awkward small talk with shoppers.

The bad news, well, for Shorten and Labor, is they are now utterly bereft of a political strategy. Another perfectly good scare campaign wasted. Ho-hum.

Last week ACTU secretary Dave Oliver told the ABC’s Lateline program the union movement was gearing up for the mother of all scraps over the GST hike.

“It’ll be different to what we had with Your Rights at Work,” he told Tony Jones. “Where there were significant resources put into TV advertising. It’s going be more — what we’re actually doing is out there, on the ground in communities listening and talking to workers about their concerns.”

Not to put too fine a point on it, Dave, consulting with the rank and file — “listening” — is supposed to be the unions’ core business. But at least the ACTU hadn’t rolled out the big bucks on an expensive advertising campaign that would by now be utterly pointless.

Those who sport the blue-tinted glasses if not the matching blue ties might put Shorten’s discomfort down to Malcolm Turnbull’s deft political footwork but this was more of a manic mosh pit jumping up and down than a Nureyev tour en l’air from the Prime Minister.

The PM allowed the debate over the GST rate to fester through the Christmas period, which gave Shorten and Co. a few rounds of live ammunition and Labor’s (but not Shorten’s) numbers rose albeit slightly over the silly season.

Finally last week, Turnbull put the kibosh on it.

“At this stage I remain to be convinced, to be persuaded, that a tax mix switch of that kind would actually give us the economic benefit that you’d want in order to do such a big thing,” he said on the ABC’s Insiders program on Sunday morning.

This may have calmed the ponies on the backbench but it has also obliged Treasurer Scott Morrison to chow down on an Ordure Dagwood, easy on the bread. Morrison must now invoke a harsh spending regime in an election year and wear the political consequences. A good deal of it will come at a cost to Morrison’s personal political ambitions.

Worse, in the three-month-long vacuum, the states had been running the agenda, allowing relative political non-entities to stride around the federal stage like protagonists. The states do have significant revenue problems on the near horizon, which makes the prospect of serious injury from standing between a state premier and a bucket of money even more acute.

Besides the obvious objective of political survival, what does Malcolm Turnbull’s government stand for? After six months in office, I have no idea and I doubt many Australians do either. The great shame of it is that if there was at least some semblance of direction and purpose, Turnbull could start a nationwide competition to find out: Tell us what we stand for in 40 words or less. The neatest, most inoffensive answer wins a night out on the tiles with Kevin Andrews. Second prize, two nights.

Ultimately, the most credible opposition to a GST hike came from Citizen Keating, a man who had won the unwinnable election on a “no GST campaign.” Remembering that Paul Keating had supported a point-of-sale goods and services tax in his early days as treasurer didn’t work for John Hewson in 1993 and it seems churlish to remind Keating of it now.

“You know the old saying, ‘give the dog a bone and they’ll bury it’? You give the political system $35 billion, they’ll spend it, and spending it by reducing the company tax rate and the top personal rate,” Keating said on 2GB Radio a week ago.

Most Australians, Keating said, spent their entire income and they would suffer with a rise and/or broadening of the GST while the wealthy would benefit from reduced personal income and capital gains tax rates.

So there you go. In the course of a couple of sentences, Keating hit the GST hike for six. No expensive advertising campaigns, no accosting shoppers going about their business. Keating knocked out an op-ed and spent a few minutes on the radio. Talk about cut through.

At its heart, the proposed GST hike offered nothing more than a gigantic shift of money from people’s pockets to the commonwealth and states that would quickly be consigned to long-term spending commitments, creating a political system addicted to direct taxation and having to constantly jack up the rate whenever the coffers were empty. We’d end up like Europe where the price of a Mars bar and a packet of Twisties is almost doubled by taxes.

The rule of thumb is those who come from the right generally say the commonwealth has a spending problem, while those from the left of the divide claim there is a revenue problem.

The truth is they’re both right and sadly both wrong. We have a revenue problem that can only fixed by addressing spending.

It is now Scott Morrison’s job to find savings and tweaking of tax breaks from negative gearing and in superannuation have been mooted. It isn’t reform but it does pose lower risks to the Turnbull government’s chances of winning the election.

In an even worse development for Shorten and Labor, the Greens have decided they’d like to come into the tent while using the outside lavatory. Richard Di Natale and Adam Bandt have entered into negotiations with the government over the nature and extent of spending cuts, effectively dealing Labor out and leaving Bill Shorten in the cold, fumbling with his fly.