Tim Wilson Franking credits retiree tax 2019 federal election

You could feel the disappointment at The Australian yesterday, when it was forced to report that the scare campaign against Labor’s proposal to end the franking credit refund rort had failed to register with voters, with opposition to Labor’s proposal falling four points to 48%.

The fall is not much bigger than the poll’s margin of error, so let’s just say there’s been no shift in voter sentiment on the issue either way. That will disappoint both The Australian and The Australian Financial Review, which have been running aggressive campaigns against Labor’s policy. Of course, both newspapers are normally to be found savaging taxpayer largesse to the undeserving, but retirees, especially well-off retirees, make up much of the readership of both, so their campaigns are entirely understandable.

The Liberals, too, have been aggressively campaigning against Labor’s policy, complete with a taxpayer-funded parliamentary inquiry into Labor’s “retiree tax”. Tim Wilson’s remarkable bungling of the inquiry has, of course, been discussed in painful detail by the Nine papers.

There are other reasons, however, why the campaign, in the words of The Australian, “has yet to resonate”. Much of it has been conducted over summer, when voters are paying even less attention to politics than usual. Presumably that will change, especially as the election nears — although bear in mind that even then, great swathes of the population will have no interest in the election.

Then there’s the demographic problem. According to Newspoll, 59% of over-65s oppose Labor’s policy, as do 50% of over-50s. This compares to Essential Report data from March last year, which showed 46% of 0ver-55s opposed the policy. Below 50 years, voters are either evenly split or, if they’re younger, support Labor’s policy — both Essential and Newspoll had 41% of 18-34s supporting the policy.

So, not surprisingly, opposition is strongest among older voters. But there are many kinds of older voters — some benefit from the current rort, many do not. Essential found just 14% of people received a handout under existing franking credit arrangements — 15% received a tax deduction (i.e. they own shares but also pay tax on their other income) and 64% received nothing at all. And, yes, actual beneficiaries of the rort are unhappy about Labor’s proposal: 65% of those receiving a handout (i.e. the 14%) oppose Labor’s policy. But only 23% of voters who don’t get the handout oppose it.

So — bearing in mind that Essential data is around a year old, although Newspoll suggests things haven’t changed significantly in recent months — for the scare campaign to bite, either people who don’t benefit from the rort have to get angry about it, or the 35% of people who benefit from it but who don’t object to the policy have to be convinced to change their minds. And the campaign isn’t finished at that point — then it has to convince people to change their vote, not just their minds.

That’s where it gets more difficult: Coalition voters are already opposed to Labor’s policy — 47% object to it. In contrast, 17% of Labor and Greens voters oppose it, and 32% of “other” voters. It’s the non-Coalition voters who don’t like the policy who have to be convinced by the campaign — they already think it’s a bad idea, the trick is to shift their voting. And how important is the issue? Important enough to shift votes? If they’re some of the 14% of people who actually benefit from the rort, maybe. But it’s probably a fair assumption that if you’re part of the 86% of people who don’t benefit from the rort currently, you’re unlikely to shift your vote on the issue.

So, the campaign has to target a small demographic: Labor and Greens and “other” voters who currently benefit from the rort and oppose the policy, and encourage them to shift their vote, and those who don’t object to the policy even though they benefit from it, and swing them to opposing the policy enough to change their vote.

Even if that happens, there’s the problem that these older voters are normally in Coalition-held seats anyway: the ten seats with highest proportions of over-55s, according to Electoral Commission data, are Lyne, Gilmore, Hinkler, Wide Bay, Cowper, Richmond, Flinders, Page, Mayo and Mallee. Labor certainly has its sights set on Gilmore and might dream about Flinders, although it is more likely to envisage Julia Banks taking that with Labor preferences.

Most of these seats are more likely to come under threat from independents (Mayo is already held by Rebekha Sharkie; Rob Oakeshott is having a tilt at Cowper) than Labor. But it is possible the issue could cause trouble for Labor in Lyons and Braddon in Tasmania — they’re 15th and 16th on the list of seats with the highest proportion of older voters.

The scare campaign could yet bite Labor — if it is maintained all the way to the election, if it hits the right sub-demographic, if it is effective enough to elevate what is a minor issue for all but the recipients into a vote-shifter. But the result is more likely to be that it shores up the Coalition’s vote in seats which were mostly out of Labor’s reach anyway. It’s an interesting political experiment being conducted in real time, and will be fascinating to watch.

Peter Fray

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