Labor will end tax free superannuation, according to one of its most prominent campaigners. When Peter Costello surprised and delighted the nation with his revolutionary, absolutely tax-free, superannuation policy, he estimated the government would forgo $7 billion over four years, but that would rise as babyboomers drew down their superannuation.
Paul Keating warned at the time that this might “not survive” a future (Labor) government. Keating has form on this. He fought Hewson over the GST in 1993, but as soon as he was in office he massively increased sales tax. Both the aged and those contributing to superannuation may well contemplate what Keating said
That is that superannuation will no longer be tax free. As part of the mainstream media’s approach in ensuring he has a dream run, Rudd hasn’t been asked whether he shares Keating’s views, which are on the public record. If he were asked he would of course deny any intention to tax superannuation or expand the “death duty” aspect of the CGT. But he may have no choice.
Here Keating has only said publicly what the Caucus, who are closer to Bob Brown than they are to Howard or Costello, would prefer to do. And they control Rudd; Rudd does not control them.
Rudd has been successful in hiding but not suppressing Labor’s four decade long addiction as ultra-spendthrifts. He presents himself as an economic conservative, with almost identical policies to Howard. But Rudd’s policy of copying Howard will not work for much longer, if it has not already had its day. The blunder over Kyoto II came through, even on the evening TV news, as showing Rudd desperately needed Howard to save him from a serious policy disaster. So the undecided are beginning to wonder how Rudd will function without Howard. Labor’s real agenda may then emerge.
The Australian Electoral Survey demonstrates that Labor politicians strongly believe they can make better decisions than we can in spending our money, and worse, that is precisely what they must and will do in government. In the Hawke Keating years, the spending madness was such that Labor began to sell off the family silver, even the Commonwealth Bank. Ben Chifley must have turned over in his grave. In an attempt to calm the Labor rank and file, this was dressed up for the gullible as economic reform.
Fortunately Peter Walsh was able to maintain some discipline, but Labor still bequeathed about $96 billion in debt to the Howard government. Most of the money was wasted on bureaucracy and redistribution, the investigation of a potential second Snowy River Scheme to turn the Murray Darling into the breadbasket of the Asian region — the diversion of the Clarence — cancelled. When he was the Goss eminence grise, Rudd adopted a similar approach to water infrastructure.
If Rudd is elected the Caucus will soon insist that everything be spent. Most will go into bureaucracy and income redistribution. Eventually there won’t be anything left, especially if Rudd insists on no deficits. Now a no-deficit policy in good times is only one part of good government, as the Carr government demonstrated when it wasted the GST by pouring it into layers and layers of an increasing bureaucracy paid at private sector rates.
So at some stage Rudd will have to find new funds. As the nation’s leading overnight radio presenter Jim Ball puts it, a Rudd win will mean the same failed franchise will control all the country. They will be able to raise the GST they campaigned against and were going to roll back. But are there other sources?
It will be then that the rivers of gold going into superannuation will prove irresistible.