The longest election campaign in Aussie history is nearly over - thankfully!
The polls are saying it's close, but the bookies are saying it’s not. When it comes to predicting who will win the federal election, I prefer to go with the bookies - they have more to lose if they're wrong. The bookies think the odds are in the coalition's favour at the moment - a 90% chance at that. Although, the odds were about the same for Britain to remain in the EU (that was a bad day for the bookies!).
If you're undecided which way to vote, hopefully this will help you. I'll try cut through some of the white noise and focus in on the good, the bad and the ugly.
The Coalition – The good
It's great to see that the Coalition isn't spending their way to power. Our annual deficit is approximately $40 billion - and that’s just what we lost last year. Our total debt is approximately $405 billion dollars. To put that in perspective, if the 15 million working Australians donated $26,000 to the government we would be debt free. The time for spending is not now.
The Coalition are also planning on reforming taxation treatment for superannuation contributions - which for a long time has been a tax break for the wealthy with no apparent benefit to the economy. This was a divisive issue for the Coalition internally, as the policy strikes hardest against their historically faithful constituents. I guess they figured it was worth the risk.
If you’re a small business owner with turnover (not profit) between $2 and $10 million, you’re going to like the Coalition's policy on company tax. This reduces the rate in this tax bracket to 27.5 per cent, down from 30 per cent, with the ultimate goal of 25 per cent. I do believe this will encourage 'jobs and growth' as the slogan says. If you own a small business, I think the Libs will support you more.
The Coalition – The bad
I get the feeling that Mr Turnbull would have liked to change the GST rate to 12.5 per cent and reformed negative gearing on the venue side. Luckily, I don’t believe he could get the support of his party. Though both would have substantially reduced our deficit.
Mr Turnbull’s budget is relying on budget 'zombie measures'. These are budget measures that have not passed the senate and may not be under the next senate. What this essentially means is that the budget position under the Coalition may be worse than anticipated. The failure to be able to pass legislation is why we are going to the polls early. The zombie measures total about $10 to $15 billion dollars, depending on who you believe.
Labor – The good
I like the fact that Labor put their policies out for scrutiny early, going against conventional wisdom of waiting until the last minute. They certainly got traction on their negative gearing policy.
I’m not a great believer in negative gearing and so agree with Mr Shorten's ideas. It’s something we can live with if the economy is flushed with cash, however given our current financial situation, the savings from winding down negative gearing could be substantial. The Labor policy will only affect new constructions or new investments (existing investments are grandfathered), so if you're an existing home owner don’t panic! Though don’t get sucked into the argument that it will reduce housing prices and make housing more affordable either. Any winding down in negative gearing will have a modest impact on house prices by any sensible analysis - a two to three per cent reduction at most.
I also like Labor’s ideals around spending on hospitals and education. Their prioritisation of this area is important.
Labor – the bad
From a personal perspective, I don’t generally like negative election campaigns and of the two major parties, Labor ran the most negative campaign. Their misrepresentation of the Coalition's policy on Medicare in particular felt the most unfair. The Libs were never planning to privatise medicare, just the payment processing aspect. In my opinion, the Medicare payment processing system is decades old, inefficient and external parties could realistically fix it quicker.
Labor has also set their targets around a 10 year budget cycle. The idea of a 10 year cycle is not in itself a bad idea, the problem is that ratings agencies base their credit ratings on four year cycles. If the credit agency downgrades our national rating from AAA, all of Australia's debt will be repaid at a higher interest rate as our perceived risk will have increased.
Most people would agree with the Green’s policies - peace and non-violence, social justice and of course, ecological sustainability. The problem I have with the Greens is they had their opportunity to assist in making significant change by passing an Emissions Trading Scheme (ETS) in the Senate, which Labor were pushing around 2009. At that time there were real prospects of bipartisan support with Mr Turnbull also supporting such a system as opposition leader at the time. The Greens gambled big and lost by blocking this bill, hoping for something better on an ideological basis. Ironically, it probably cost Mr Turnbull his position as opposition leader at the time too. What we have now is a debacle compared to what could have been. In my mind, they have to sit on the bench a bit longer to atone for their sins.
Unless you strongly support the policies of another minor party, don’t vote for them as a protest vote. Sure it’s fun to say you voted for the Sex Party or the Motor Enthusiast Party, but the problem is these people get elected with a small number of 1st preference votes. They get a taste for politics and a little knowledge and this becomes dangerous as they tend to block legislation and generally cause havoc. In retrospect, was it really cool to vote for the Clive Palmer party? Not only did it give us Clive Palmer, but we are left with the legacy of Jacqui Lambie too.