The world has gone mad. Or at least Australia's centre-right political parties and the Greens have gone mad. In scrambling to the right and the left in an effort to resolve their leadership tensions, the non-Labor parties are vacating the centre, where elections are won. Bill Shorten can position Labor as the party of the centre by demonstrating fiscal discipline, reassuring the electorate that Labor can manage the nation's books. On this the election result will swing.
In forming the Monash Forum – which more acceptably should be named the Ginger Group – the Coalition's hard right, led by the Four Formers: former prime minister Tony Abbott, former deputy prime minister Barnaby Joyce, former senate leader Eric Abetz and former cabinet minister Kevin Andrews, is advocating the construction of a new coal-fired power station in the Latrobe Valley. They know no bank will finance it, but that's okay, they expect taxpayers to stump up the cash. Yes, these are the same taxpayers they want to save from high electricity prices. You couldn't make this stuff up.
Seeking to fend off the Ginger Group, Prime Minister Malcolm Turnbull has been calling on the private owner of the ageing NSW Liddell power station to keep it operating beyond its useful life or sell it to another company. As owner, AGL has plans for the decommissioned site, involving renewable energy to which the Prime Minister in bygone years was passionately committed. Would a buyer take responsibility for site remediation upon the delayed closure of Liddell? Of course not. The Coalition would assign that responsibility to the same taxpayers it is trying to save from high electricity prices.
Do you see a pattern here? The party of free enterprise has fallen in love with taxpayer-funded subsidies for its pet projects – coal-fired power stations, inland rail lines and northern Australian infrastructure.
The Monash Forum more acceptably should be named the Ginger Group. David Rowe
Meanwhile, back at the left, Greens leader Richard Di Natale has announced his party would create within the Reserve Bank a people's bank at which everyday Australians could hold accounts. Doubling down, Di Natale also announced a universal basic income – a minimum payment to the wealthy, the middle and the poor, set at the amount of the age pension, regardless of whether they seek work. It's estimated that the $250 billion cost would require lifting all marginal income tax rates by 33 percentage points, including the top rate to 78 per cent, or by increasing the GST rate to 27 per cent.
Shorten's proposition to the sensible centre should be: with clowns to the left of me, jokers to the right, I want to be stuck in the middle with you.
But to occupy the middle, Labor must be more than the party of redistribution; it needs to articulate a strategy for economic and jobs growth and demonstrate it can manage the nation's books.
As I have argued before, an ongoing investment allowance, now Labor's Investment Guarantee, is a well-targeted, cost-effective means of encouraging investment. And Labor's Asia engagement strategy has the potential to generate additional export-led growth in non-traditional areas such as health, aged care and financial services.
But all this policy would be for nought if a perception were to take hold that Labor is incapable of managing the nation's finances. As opposition leader, Abbott was effective in creating a public perception that the Labor government was presiding over a "debt and deficit disaster". Never mind that after more than four years in government the Coalition has presided over a doubling of net debt per person.
Ahead of the 2016 election, I predicted the winner would be the party with the most credible pathway back to surplus. Late in the campaign, Labor's shadow treasurer, Chris Bowen, was obliged by his colleagues to concede that over the four-year budget period, Labor was behind the Turnbull government. It was a decisive blow in a tight election.
This time around, in addition to the revenue it would reap from cracking down on negative gearing on investment properties, Labor can claim the proceeds of tightening the rules on family trusts and denying cash refunds for dividend imputation credits. If Labor devotes the majority of that revenue to fiscal repair, it can be well ahead of the Coalition over the budget period and over 10 years.
By articulating a growth strategy and demonstrating superior fiscal discipline, Labor can win the next election, occupying the sensible centre being vacated by the Coalition and from which the Greens have never been more remote.