Labor is now in the difficult position of having to impress voters with how much pain it is prepared to inflict on them in order to remain competitive in the election campaign.
Wednesday’s admission that Labor was planning to be even less fiscally disciplined than the Coalition over forward estimates — albeit with the caveat that the ALP’s 10-year budget plan is better — played right into the government’s long-running efforts to portray Labor as fiscally irresponsible, despite the massive spending and debt blowout that has occurred on the Coalition’s watch. The voters are happy to give the Coalition a pass on economic and fiscal management even when the Coalition serially blows out deficits, as the government has done. They simply assume that conservatives are better economic managers — something reinforced when the Coalition says demonstrably preposterous things like “surpluses are in our DNA”.
Labor, however, gets no such charity from voters (just as the Coalition gets no charity from them on education and health). That’s why Wednesday was so damaging to Labor. It avails them little that they’re the ones who led the way on tax increases on tobacco and on superannuation tax concessions. Their opponents simply took those policies and said “thanks for that”. Admitting that deficits would be higher under Labor, even if the budget was returning to surplus at the same time as under the Coalition, confirmed voters’ stereotype of Labor.
Thus today’s announcement that Labor would be backing a number of savings measures it has previously strongly opposed. This morning, Labor’s IT staff were busy purging the party’s websites of references to campaigns like “Don’t Pocket Our Pensions”, which savaged the government for its proposed pension indexation, and later asset test, changes.
The Coalition is perfectly entitled to rail at Labor’s stunning hypocrisy in benefiting from two years of opposition to some of its savings before adopting them at five minutes to midnight. Labor is also entitled to point out that the Coalition did exactly the same thing in opposition — demonising Labor’s modest cuts to family tax benefits as “class warfare”, for example, before quietly accepting the cuts (indeed, in government the Coalition went further and savaged family tax benefits in the 2014 budget). Hypocrisy is always the best unity ticket in politics.
None of this helps Labor much — as long as the debate is focused on fiscal management, it will lose, because of the Coalition’s strength on the issue. Labor needs to shift the focus back to fiscal and economic management for working families, where it is stronger than its opponents. But in a campaign reliant on big education, childcare and health spending announcements, it is painfully vulnerable to the charge that the spending is unaffordable. Voters need to see some pain being inflicted — but, inconveniently, not any pain directed at them.