The national interest and the politics of reform

How can reform ever happen in the face of a nihilist Liberal Party and media?

Superannuation can be a boring topic of conversation at the best of times, but everyone in politics is very excited about it the moment: the Labor government can see it can save a substantial amount of money by closing off a loophole and has introduced a higher level of tax for superannuation accounts holding over $3 million. The Opposition, however, sees a different opportunity, claiming the Prime Minister, Anthony Albanese, has broken an election promise. And in case you didn’t hear: he wants your money!

The changes Labor wants to implement won't come into effect until after the next election – 2025 – the changes will affect only around 80,000 people or around 0.5% of all superannuation accounts and it’s such a modest level of economic reform that it’s barely worth wasting any time over. But the Liberal Party wants to make it seem as though everyone in the electorate will be affected by these changes; the world as we know it is coming to an end; and it’s the worst event ever in human history by a large margin – worse than 9/11; worse than World War II; worse than the Black Plague, and just possibly, all of those events combined, because when Labor runs out of their money, they come after yours.

The Liberal Party does have a great skill in being able to magnify the smaller and insignificant issues into large scale calamities – why wouldn’t they if they have nothing else to offer – and there have been some comparisons made with their franking credits campaign from 2019, where they made many people believe they were going to lose their franking credits, even those people who didn’t own shares (and above all, also see the above points about 9/11, World War II, Black Plague).

But it's hard to mount these types of scare campaigns from Opposition and the Labor government should stop listening to the clatter that’s being promoted by the mainstream media and cut superannuation benefits for high income earners even further. Recent opinion polls produced by Newspoll suggest 64 per cent of the electorate is satisfied with these changes – as well as a majority of Liberal and National party supporters – with only 29 per cent opposing, so, certainly the electorate is on the side of the Labor government on this issue.

Superannuation policy is complicated; there’s no question about this. Applying the right type of reform is crucial, so there aren’t any inadvertent consequences where it adversely affects the people that it shouldn’t affect, and avoids providing a further benefit to the people who don’t need it. The largest superannuation account is valued at $544 million and, obviously, that’s money that has been placed in there to avoid tax, because it’s not the type of money that someone would want to tie up until they’ve reached the official retirement age of 67.

So why would an Opposition decide to rail against a reform that has popular support and only affects a small number of people? Because that’s all they’ve got.

It’s obvious what the Liberal Party leadership is trying to do here: replicating what they did with their campaign against Labor's franking credits election policy in 2019 and managing to convince many people that, somehow, they are going to lose out. But aside from the fact that these campaigns are difficult to wage from Opposition and, therefore, reducing their effectiveness, the Labor government has a simple message to spread.

To many people, $3 million is a large sum of money and it’s also a sum that most people will never earn throughout their entire working lives, let along being able to have that sum in their superannuation accounts. And proposing to tax these accounts at 30 per cent, rather than 15 per cent, won’t cause any hardship for the people who hold these accounts – and is still at a rate that is lower than the highest tax bracket of 45 per cent.

If anything, these reforms don’t go far enough and it would be better for the Labor government to implement these changes in the 2024 financial year – rather than 2025 – and look at other ways to recoup revenue from Australia’s highest income earners. Perhaps it’s an extension of Albanese’s promise in the last election campaign to take a “cautious approach to government” but should this approach be so cautious that it caters and appeases all of those people who didn’t vote for the Labor Party – and probably never will – rather than the people who did vote for the Labor Party?

It’s a peculiar predicament in Australia politics, where the Liberal Party can behave in whichever way it wants to but Labor is expected to mimic the qualities of the typical Liberal Party voter and push forward the idea that it really is the party for all the aspirationals out there, who really couldn’t care less about a fairer and more equitable society: their main interest is getting ahead, acquiring as many assets and properties as possible, holding on to their franking credits, and making sure their high superannuation accounts remain untouched. It’s unsustainable economically and politically.

And so, Australia is left in a situation where much needed reforms are pushed out into the time of neverland – 2025, and only if Labor wins the next election – and the Liberal Party, in strict consultation with the mainstream media, acts against the national interest, and descends to name calling and targeting the disinterested people within the electorate who can be easily persuaded with claims of “socialism!”, “Labor is after your money” (well, yes and no – superannuation is paid to employees, but it’s not a share of their income: it’s an excess paid by employers and are funds to be used in retirement), and making the analogy with honeypots: “it’s your money, it’s not honey, and it’s not funny”. Bingo to Deputy Liberal Party Leader Sussan Ley, for using a tactic straight out of the Barnaby Joyce Book of Retail Political Marketing.

The Liberal Party wants to make these superannuation changes to rich people’s accounts seem so unfair and unreasonable and make it seem like everyone has been affected by this change to superannuation regulations, and make it seem like it's the biggest broken promise ever in political history. Again: this is all they have.

The Liberal Party have always opposed compulsory superannuation: they opposed the introduction in 1992; they’ve attacked industry super funds by claiming they’re controlled by the unions and socialists – even though industry super funds have consistently outperformed retail super funds over the past 30 years – they also allowed early access of $20,000 of superannuation funds during the early part of the COVID pandemic, rather than having the government pay for that support. There was also the proposal from former member for Goldstein, Tim Wilson, to access superannuation for property purchases – which would have ruined both the superannuation and the housing markets at the same time. Not only is the Liberal Party committed to destroying the superannuation system but committed to economic mismanagement.

There has always been an antipathy towards superannuation, but now the Liberal Party has had the sniff of a political opportunity, they’re promoting themselves as the saviour of the system, when historically, they’ve been quite the opposite – and more interested in protecting the system for those who want to evade tax.

And seizing an opportunity for themselves, the mainstream media has joined the attacks, also claiming that the Labor government is “after your money”, destroying people’s retirement savings and suggesting that applying a capital gains tax to the family home is on the agenda, even though nobody has remotely even considered this as a discussion point.

Highlighting these imaginary points is then picked up and magnified by the Liberal Party and the circular loop continues: even the ABC has announced these superannuation changes as a “tax hike”. Where will it end? How can much-needed reform be instigated in these circumstances when even a minor change is magnified into a massive problem, and dovetails into a tsunami of hate against the Labor Party?

Which, somehow, escalated into the News Corporation’s Herald Sun headline of “Albanese emerging as our most dangerous prime minister”? More dangerous than former Prime Minister Scott Morrison deciding to secretly acquire five ministerial positions? More dangerous than the Robodebt scheme?

Should the Labor government wait three more years to take such a minuscule plan to an election campaign, where it's going to be misrepresented and destroyed by a desperate Opposition and amplified by the media? Or should they make the changes that in the national interest right now? Based on opinion polls and grounds of equity, it’s obvious what the answer is: the Labor government should ignore a weak Liberal Party; ignore a media that has a diminished influence, and make immediate changes in the national interest.

This is easier said than done, of course, but the electorate has a tendency to reward a government which acts in this quaint old way: in the national interest. And Labor should try it. It might just work.