Sometime before March last year, the federal Labor leadership group no doubt had some robust discussions about the wisdom of taking a plan to end franking credit refunds to the 2019 election. It is close to a cliché to observe that making yourself a big target with such a significant economic policy is electorally dangerous.
The phrase that describes the opposite strategy, the “small target,” entered Australian political lexicon after the 1996 election, when the Coalition, having promised to change virtually nothing in economic policy, coasted to victory under John Howard against a thirteen-year-old government.
After that, Labor leader Kim Beazley was frequently derided for taking very small targets to two elections and losing them both. When one of his biggest detractors, Mark Latham, took over the top job in 2003, he promised to muscle up, take the fight to the government and display what the people were yearning for — guts and conviction. The following year, he and his party clocked in what remains the worst result for any federal opposition since 1977.
Under Kevin Rudd, Labor ran what was widely seen as a small-target campaign, also known as Howard-lite. Tony Abbott’s 2013 policy manifesto was the same; most memorably, he promised “no cuts” to virtually anything.
The logic behind the small target is that oppositions rarely take office simply because Australians yearn to be governed by them. Governments are flung out when voters, or at least enough swinging or softly committed voters, have had enough of them and find the alternative, her majesty’s opposition, at least tolerable.
It’s a useful template because it’s pretty much true. With major-party support continually on the decline, its applicability won’t last forever, but in 2019 the choice is still one party or the other.
Yet sometime before March last year Bill Shorten and his team took a deep breath and agreed on the big bang. Why? What was their rationale?
Did they believe they were headed for victory anyway, and didn’t want to be accused of springing surprises after the election? That’s hard to believe, because no political player ever assumes an election is in the bag.
It might have been to burnish their economic credentials by putting forward a fully funded manifesto. Unfortunately, the market for such detail is limited to policy wonks and technocrats. It simply washes over the vast majority of voters.
And because the government’s argument is that reneging on pre-election assurances and overspending is in Labor’s DNA (an argument that has admittedly, after a stream of Coalition budget deficits, lost some of the power it had five years ago), the detailed elegance and robustness of the opposition’s platform becomes somewhat moot.
The most likely explanation is that the opposition was emboldened by the experience of the previous election. In early 2016, it unveiled an ambitious housing affordability policy that would halve the capital gains tax discount and restrict negative gearing to new stock. From then until the July election the government barely laid a hand on it, and on election day Labor did better than generally expected. The big target didn’t seem to do any harm; in fact its boldness possibly helped the opposition.
So perhaps it made sense to throw the dice again when franking credits were being discussed.
Now, I was one who believed in 2016 that Labor’s housing policy was a political blunder that would cause it grief. With some humility I now suggest the following possible reasons why it didn’t work that way:
- The Turnbull government made a strategic decision, for some reason, to run a positive campaign.
- Malcolm Turnbull was not a natural politician. While well regarded by voters, he was not a great campaigner.
- Crucially, no one expected Labor to win. It’s difficult to get voters’ minds focused on the dire consequences of a policy they don’t believe will be implemented.
The adjunct to the big target is the “scare campaign,” the best-known of which is probably the 1993 election, which the Coalition was generally expected to win, right up until polling day; instead there was a swing to the Keating government.
Like all political history, that event is distorted by mythology, but the major dynamic remains clear. Most voters wanted to get rid of the decade-old Labor government, but they found the opposition too scary. Had John Hewson and his suite of policies been less stress-inducing, or had voters been even more determined to dispense with Paul Keating, the result would have been different.
In 2019 it’s all very well to insist Scott Morrison is no Keating. He’s not, but neither he nor his government is as loathed as the former prime minister and his party were. Nor has Bill Shorten ever enjoyed the public esteem in which Hewson was held (for a time, that is).
Scare campaigns rely on misinformation and exaggeration. Because most Australians are semi-engaged (if that) in politics they catch snippets and ingest half-truths. The more difficult the policy is to understand, the better from the scarer’s point of view.
In the case of franking credit refunds, older Australians are juicy targets. Even if they themselves won’t be affected, they might be convinced they will be. Perhaps their offspring will buy in as well. (And don’t take any notice of the argument that older people vote conservative anyway: some 23 per cent of the electoral roll is aged sixty-five or over, and even if three-quarters of them automatically support or preference the Coalition, more than 5 per cent of the national vote is still in play.)
Even Tim Wilson’s overreach as chair of the House economics committee won’t much damage the cause: Labor’s policy is in the news; people are talking about it.
And there’s still that housing package, this time complicated by the softening housing market. The government will regularly return to that. “Under Labor the value of your home will drop” is obviously true (or at least it will be lower than it would otherwise be); it’s part of the point of the policy (the other part is the revenue raised).
Chirpy Chris Bowen gives the impression of not having a care in the world, but I suspect behind closed doors things aren’t necessarily so relaxed. Labor remains the probable victor this year, but recent polls have shown signs of narrowing. Much more of that and concern will turn to panic at Labor headquarters.
And, as the sorry 2010 saga of the Rudd government dropping its emissions trading scheme surely drummed into even the most reductionist, polling-focused clipboard addict in Sussex Street, you can’t just cut your losses. Dumping a policy that you’ve long and strenuously argued for has its own repercussions. •