Angus Taylor’s immigration error – Back to Back Barries podcast

I'm Barry Cassidy, and I'm Tony Barry.Welcome to Back to Back Barries, a podcast from Guardian Australia.Well, historic Budget Tuesday night, Labor finally went where many of its supporters have wanted them to go for many years, taking away some of the benefits from negative gearing and paring back the capital gains tax discount and acting on trusts, partly designed to get more young people into housing.Now, there are two or three huge questions, of course, though, that remain.Do you like the changes?And do you like them enough to put the issue of broken promises to one side?

And do you believe it will have a significant impact on housing availability for first home buyers?Tony, what was your first impression?

Well, the first thing that struck me is, you know, no prime minister wants to lie.I think there's documented evidence and we might have a chat about the hawk years on that shortly.By putting towards a package that they know the Greens will pass through the Senate, it means it's going to pass through pretty quickly.There will have to be amendments to it, but it's going to pass through pretty quickly and you're not going to have the situation like in 2014 when Abbott broke some promises where he just bled and bled and bled and basically didn't get any of the changes through anyway.But it made me think about prime ministers that have lied and the consequences they've paid.If you work backwards, Abbott obviously broke those 2014 election promises and got shredded for it.

Gillard, of course, said there'd never be a carbon tax under a Governor -in -Lead.That haunted her throughout her term.Then you go back to Howard.As you pointed out the other week, he said never ever a GST, but at least he then sought a mandate from the public in the 1998 election.Keating did LAW tax cuts.Now, that was an ageing government.

So it had 13 years, so it was a big ask, but that shredded him as well.Hawke, I don't recall ever really breaking a fiscal promise, do you?

No, he promised that no child would live in poverty.in 1990.But that wasn't a broken promise as such.It was a claim.And what he should have said, of course, was no child need live in poverty because you can't guarantee, no matter how much money you give them, that they won't live in poverty.But I can think of another one that goes to John Howard, and it doesn't go so much to the broken promise itself, but just how significant.

Look, we've got a sorry history, no doubt about it, but how damaging are they?Remember John Howard in 1996, he'd only been elected about three months and he broke a promise and he talked about core and non -core promises.That was his excuse.Well, there are core promises, there are non -core.And he was pilloried for that.But that was three months.

into his first term and he served 11 years.So I think you can exaggerate that.It's interesting that you went to the broken promises right away and not the substance of the budget, and I think that's not unreasonable.A lot of people did, and a lot of the media did.But I think in the end it comes down to whether or not people think the end result.was worth it.

Just like with the last tax cuts, the Albanese government broke its promise over that, but that was an easy one because we're giving you more money than we told you we were going to give you.This is different because it goes to a policy position.If the substance, if they embrace the changes, then that's at least a mitigation.

Do you think if he had gone to the last election saying, we're going to make these changes to negative gearing and CGT, do you think he would have won 94 seats?

No, he wouldn't have won 94 seats, but he would have won the election.Of course, short and lost, but one of the lessons is you don't come at it from opposition.Just on that, Adrian Bateria sent in an email, a couple of factors that are required here on these promises.A groundswell of support for such a change needs to be in place and quick implementation.So just to avoid the scare campaigns.And I would add to that, you do it from government, not from opposition.

But you know, you talk about when it happened and the promise was made before the last election.What seemed to have been overlooked in all of this is something happened in August last year.There was an economic roundtable.And they put it to Jim Chalmers, is everything on the table?And he said, yes, everything is on the table.So it was at that point, at that economic summit, that that promise no longer applied, because he'd said that.

He said it was now an open question.That hasn't played into the debate at this point, but it's worth recalling because it was kind of the writing was on the wall.I think given the level of support at that economic summit for these kinds of changes, the writing was on the wall back then.

Yeah.I think the opposition are going to have really great campaign footage.You've seen it already in the news breaks.Albanese snapping a journalist saying for the 50th time, no, no, we're not going to touch that.So he's going to have a problem navigating that.I think the other problem he's going to have as well, if the coalition are competent enough to execute it, is whenever he rules out a tax now, whether it be carbon tax or franking credits, which of course was another one of the policies in 2019 that the opposition had a bit of trouble with, it's going to be very hard for him to credibly rule those out.

But I think the same thing happened.when he broke his promise on the taxation, that he promised that he would adopt the coalition's tax tables, and then he didn't.And there were three or four days of absolute uproar in the media over it, and they said, this guy will never be trusted again.And then he went on and won 94 seats.So I think we can exaggerate the impact of this kind of thing, because people understand, in the end, how the political system works.And quite often, it's ugly.

Yeah, his polling did dip, though, after that.I mean, he spent most of 2020struggling against Peter Dutton.He did, personally.He did, yeah.And then Peter Dutton was leading on a preferred prime minister basis.

But he's right.They're going to get it through quickly with the Greens.I think they're going to have to make some adjustments.I mean, one of the things that I've struck out at me was the arrangements with CGT I don't think will survive in its entirety.It really should just be on investment properties.If you're going to start taxing shareholders, as well as startups, that's a problem.

So I'm sure the government will, you know, there's going to be a lot of bartering going on, a lot of lobbying from different organisations and so forth.But what we do find in a lot of our research is young people trying to get ahead, get a deposit for a house, have actually invested in shares.as a way of making their money work harder so they can get to that deposit quicker.So I think there's a bit of an unintended consequence to penalise those people and as well as, you know, if you've started up a business and remember a lot of these people that sell their businesses for quite a lot of money, they only give themselves a living wage or sometimes they have to dip into savings to make the business, you know, grow and reinvest and so forth.Whether they should be penalised with a capital gains tax I think is questionable as well.Maybe at a different rate, but you're going to find people in the innovation sector, you know, New Zealand, for example, has a much better arrangement, other Asian countries.

So yeah, if you're a young person with some software engineering ideas and so forth, you're probably going to look at other options as far as tax regimes.

I felt just anecdotally watching a lot of the feedback from the budget, that was the one area where I think in the government they should be just a little uncomfortable was around the shares because people make a reasonable argument around, you know, young people can buy $10 ,000 worth of shares and they hope it'll be $15 ,000.down the track.And that's how you kind of get started in terms of building your deposit.And it's not about the houses, it's about the shares.But more broadly on the whole concept, Ken Henry, who is a respected tax expert in this country, and he said that he was pleased with it, disappointed that they didn't tax oil exports, but he and that they didn't cut taxes for workers beyond that.We'll get to that because the opposition has.

But as he put it, his argument was they've kicked the door in and they're inside now.And that was the point, that they'd taken that finally, after decades of thinking about it, they've taken a step towards fairness and equity.

I think they've obviously done some things from a supply side with housing, with negative gearing and so forth.Chalmers has been very explicit in his language that treasury modelling says it's just going to slow down the rate of house price increases.Now, that's a good thing.He's certainly not saying it's going to decrease the house prices.

And they won't say that, because then everybody who owns a house, and it's the number one investment, they don't want to hear that.

Exactly, exactly.And it's unlikely it's going to anyway.But obviously, next best option is they're not increasing it 10 % a year and making it even harder.The big problem with the budget, to Ken Henry's point, is there's nothing about the income tax relief.So I think there's almost universal agreement that we need to tax property differently and wealth differently.But for those young people, again, trying to get into the market, they need to have more of their own income so that they can afford to deposit.

And the budget didn't tackle any of that.The other thing that leapt out at me about the budget was they're saying that inflation will be 2 .5 % next year.which I find very hard to believe and that means a lot of the figures then are all flowing off the screen.calculation.They're also talking about GDP going up to 2 .5 % when a lot of the markets are flagging, not unreasonably, that there could be a recession.So there's some heroic assumptions in the budget as well.

Well, Angus Taylor did go there with the taxation.And that's why I like that concept.for the same reason that I like much of what the government's done, because they've just kick the same door in, right?This concept of finally doing something about bracket creep has been sitting around again for decades and nobody's really moved on it.And I just like the idea that even if it can't happen and maybe it's unaffordable because it's going to cost $20 billion and the return starts at about five bucks a week and ends up at $20, so is it worth it?too expensive for the outcome.

But at least they're showing that it's something that they will look at into the future.And I think it'll cause a reaction from the government.

My sense is Labor ...Another disappointment with the budget is it seemed like a Daniel Andrews budget as opposed to a Hawke Keating budget to me.And the But what do you mean by that?Well, the Daniel Andrews budget is very much a three -year or four -year cycle.What's step one, what's step two, what's step three?So step one was the tough medicine, gaining more revenue and so forth.

We've discussed before about gas tax and I said, it's inevitable.And if I was the industry, I'd be going...If I was working for the industry, I'd say, you guys need to go to the government.and use the leverage you've got right now with our security partners, with the fuel crisis, and negotiate a 10 -year plan in terms of exploration and planning and permitting, as well as a more realistic taxation regime.Next year is an inevitability, in my opinion.that gas tax will be on the table, on the budget.

So there'll be another revenue raising measure for the government.And then year three, before the election, will be the income tax cuts.And I think they'll do a better offer to the electorate than what Angus has put on the table.And remember, Angus's announcement last night is for the next electoral cycle.So he's locked that in.It's going to be very hard for him to then backtrack and say, you know, we'll see, we'll see their tax cuts and raise you another 5%, you know.

Yeah.So I thought when you were talking about Andrew's budget, you were talking about the hammer and sickle, you know, communist manifesto that the Telegraph portrayed this one as.And, but just, just totally ludicrous treatment of the whole thing.But beyond the tax cuts in the, in, in Angus Taylor's response was the entitlements.The entitlements now for migrants in Australia, and they're taking those away.But it applies to permanent residents.

These are people who have taken a commitment to spend the rest of their lives in Australia.They have been admitted as permanent residents.The one difference is they haven't committed to taking out citizenship.Now, Cosimara's pointed this out in a piece that he wrote about it.The outlier in all of this is China and migrants from China.All of the other countries are open to hold dual citizenships.

The Chinese cannot.And if they do, they potentially could lose property, investments, bank accounts, and the whole bit.So it's a huge issue to them.So while it might be attractive to the One Nation cheer squad, There are 1 .4 million Australians who identify as Chinese migrants.That's a lot.And so putting apart the unfairness of it all, I would have thought the net result politically could be a real clanger for Angus Taylor on this one.

Yeah.Sarah Ferguson asked him that question after the budget and reply.He clearly did not look briefed on it.And he muddled his way through it.And then the next morning, he sort of Took out a mop and bucket and cleaned it all up a bit and said, we're grandfathering that particular provision.I think strategically, though, they might have made an error in putting too much out there.

I know there's a lot of pressure on him after Farah.But you don't get eight headlines the next day.You just get one.And obviously, the centerpiece of his response was the indexing tax rates.And that goes to a bit of a liberal legacy strength that they need to leverage a lot more than they've been doing.So I don't know why he just didn't keep it at that instead of going down this other path, which obviously was a pitch to the One Nation faithful after Pharaoh.

I thought that's something they could have rolled out later on in the cycle and obviously sort of done a bit more research on exactly how it impacts various countries.

Yeah.It's something they might have to look at again, I think, because of the sheer number of people who could be affected by it.And even if it's grandfathered, they saw the prospect of more people coming and relatives and so on.And as we know, the Chinese live in like so many other Australians do, and it might have an impact for them.Look, we'll take a break.We haven't yet got to the wash -up of the Farrow by -election.

Just before then, I do want to mention our recording.Next week, we go live from the Sydney Writers' Festival.It's on Thursday at Carriage Works in Sydney at 9am, and it's a free event.All you need to do is turn up, grab a coffee, and join us in thevery large foyer they have at Carriageworks.Should be a lot of fun.

Back in a minute.Alright, we're back in the Faribault election now and when you overlay the result of that, It's difficult because it has to be specific to regional areas, really.But you do get a sense, though, of what is achievable for one nation, certainly in the regional and rural areas of Queensland and New South Wales.To me now, it's not impossible for one nation to pick up anywhere between 12 and 22, 23 seats, right?And most of those would be coalition seats, and probably a lot of them National Party in Queensland.You could finish up with a situation, unless the coalition, particularly the Liberal Party, are able to pick up seats in other places and recover a bit from the last result, you could end up with a situation where both One Nation and the coalition have numbers in the 20s.

Yeah.I think one of the big highlights of the Farrah by -election to me Everybody's focusing on the 30 % primary drop for the Liberal Party.

Yeah.By the way, when I said in the numbers, I was talking about seat numbers, seat numbers, not the primary numbers, just to be clear.

30 % drop there.But you go back 10 years ago, in 2016, in the Farrer general election, and the Liberal primary vote was 58%.So it's dropped 45 points since that election.That just shows how much One Nation are cannibalising the vote overall.Most importantly, though, how much the Liberal Party primary vote has fragmented since 2016.And I think that result also has legitimized One Nation as a political force, because they've

now got a seat that they've won in their own right, as opposed to Barnaby Joyce switching parties.And what we've seen in our polling is that creates a bit of a permission structure for One Nation curious voters who are thinking about voting One Nation, but are concerned that it's a wasted vote in their language, because it's a protest vote.And we've seen in our research, because we quantified it then, that around 10 % of those One Nation curious voters have held back because of concerns that they're just wasting their vote.Now with this result, they will reconsider and say, well, actually, it's a vote for change.So what you might see now is, to get to your point, is that They are going to do very well in a lot of Queensland regional seats, including seats like Leichhardt and Cairns, which is a Labor seat.Hunter is going to be in diabolical trouble.

That's a two -party contest last time between One Nation and Labor.So they'll pick up a few seats from Labor, but it will mostly be from the coalition pile.Barnaby has been very ambitious and sort of done the sort of Babe Ruth, you know, we're coming after Western Sydney.I think there's a few seats that might, on a sunny day, turn One Nation.But obviously if you've got say $10 million campaign funding for One Nation, You're going to go for the lowest hanging fruit before you start sort of being too ambitious in the Western suburbs of Sydney.There are preconditions in Western Sydney with economic insecurity and cultural conservatism and a few other issues like that.

But I can see them putting a lot of resources into those regional seats and ending up with a significant number.

I want to get back to that Western Sydney thing.But when you're talking about the fact that One Nation voters now We've had a look at this.They don't want to waste their vote, and they're starting to think, well, it won't be wasted.That's just another version.of the thoughts that I've had on this anyway, that what motivates those who used to vote for the Liberals and National Party and are now voting for One Nation.And it's all of you.

It's things like, you know, frustration with the system and cost of living and burning the house down and the whole thing.But one thing that they have in common, all of them, those who have deserted the National Party and the Liberal Party, and adjoining one nation.What all of those have in common is they want to bring down Labor governments.That's what really inspires them.They looked at what happened at the last election, at the last federal election, and they felt, well, the coalition was no longer an effective or popular vehicle.It became the kind of P -76 of Australian politics.

And so they want to try a new one.And what they will do, they'll certainly road test it now, I think, as a result of Farrah.They'll road test it all the way through to the next election.No question.And that's what's happening.Farrer has done, it's made the idea of voting for one nation more sustainable for a lot of their people.

When you mentioned though the Western Sydney, that does become interesting, but I looked at Griffith and I think it was three out of the four booths in Griffith went to one nation, but not at the same rate as in some other places, and one of the booths didn't.But the difference with those Western suburbs, whether in most of the cities, is that there are leaders of these ethnic groups who are influential, they're visible, and they get involved.And that wouldn't have happened at the by -election, but you can bet your life, when all of the attention comes on with all the extra heat of the federal election, that those communities will be whipped up.And one nation can't expect to walk in there and get the same result.

Yeah, there was a few lessons for Labor as well on FARA.They didn't have a candidate in the field, of course, but with no candidate in the field, you'd think intuitively that they'vewould have gone to the Independent, who was funded by Climate 200, so had Labor tendencies, as well as the Greens.What's been lost in the last couple of weeks in the Nepean by -election and Faro, because the headline has been One Nation, for obvious reasons, and a collapse in the Liberal primary vote in Faro in particular.But the Greens did not benefit from no Labor candidate in Nepean.they improved their vote by 0 .5%.

And in Farrow, they went back two and a half points.So there's something happening on the left flank right now.Greens voters have always been very tactical in the way they think and vote.So we've seen before in previous elections, and this includes some Teal voters as well, where the outcome they want might be Anthony Albanese as prime minister, but they feel, let's take, for example, the issue of climate change, that Labor are only a little bit better than the Coalition on Climate Change, and they need to be dragged kicking and screaming.So it's a modern version of Don Chip.I'm going to vote Teals or Greens, But the outcome I want is Anthony Albanese is prime minister, but I want to put pressure on him on my issue.

What I think is happening now is that these Greens voters, and this happened I think at the last election with the possibility of Dutton winning, they've sort of gone back home to Labor.They voted tactically again.because what we saw was three green seats lost, and Labor have briefed out that there was a Dutton factor there.They were spooked about Dutton possibly winning, and they wanted to make sure that Albanese won.I think it's happening again, more so, with the rise of One Nation.They don't want to see the populist right.

And so they're going back home.So you might see Labor lose some votes to One Nation, that economically anxious, precarious cohort, but then picking up some from the Greenpoll as well.

Yeah.And you mentioned that, you know, why isn't some of the dissatisfaction with labour being picked up by the Greens?And when I did that forum in Farrah, a lot of people said to me afterwards that the candidate that they were most impressed with was the Greens candidate.He turned up with a support dog called Havoc, a Labrador.He really did, I think, articulate his position very convincingly, and he got a poor result.So even with Labor, not in the hunt.

So there is something that they need to look at there.Pauline Hanson, too, obviously needs to broaden her appeal beyond just being had a gutful of everything that's going on.She seems to be hinting that she might have something to say on gas.

Yeah.At the election night party they had for the winning candidate, David Farley, she gave a speech where she said that they were going to unveil an energy policy.Centred around taking more money from gas exports while also securing equity for taxpayers.That sounds like the Norway sovereign fund to me.And I know from previous polling, you know, adjacent to this issue, that's going to be very popular, I think, because we still get it in focus groups, voters left and right, angry about the privatisation of electricity.And they'll say things like, you know, Daniel Andrews at the last Victorian state election talked about $23 billion of profits.

have gone to multinationals since privatisation of electricity.That just got spat back at us at focus groups and people are saying that's $23 billion that could have gone into health, education, roads and so forth.Now, the truth of it is it's gone to shareholders and superannuation funds.That's part of our superannuation scheme and pensions.However, that's what voters heard.I think that sort of

policy, when they talk about a three trillion sovereign wealth fund like Norway, I think it could go down very well with voters.

Well, when you talk about both the left and the right, if you put the question to people at focus groups about taxing the larger taxes on these international oil companies as gas leaves Australia, how popular is it from one to 10?

The initial research post -budget this week And people are still processing it.Now they've got fragmented information paths.The days of sort of listening to the radio, reading the newspaper, watching the TV are sort of long gone.They get their information from things like Reddit and peer -to -peer messaging and so forth, content shared on Instagram from mainstream media.They're still sort of processing the information.They are aware that there's new taxes.

I've got to say they haven't been overwhelmed with the budget.They don't like the idea of, you know, it might be millennials being in the focus group.They don't like the idea of Gen X and boomers being taxed more.They're a bit uncomfortable with that.But it is amazing how many have on an unprompted basis said, why aren't they taxing gas?Why are they taxing my dad or my grandparents?

Why aren't they taxing gas?Now, it's not as simple as that, but that's the perception.

I think Albanese is going to have a lot of trouble not going there at the next budget.strategically.Yeah, absolutely.

By the way, Barry, on Wednesday night after the budget, do you know what the lead story was on Channel 10 in Sydney?

No idea.

Ivan Cleary was retiring as Penrith's coach.That was the lead story.So sometimes we can get immersed in all these issues surrounding the budget, but the most important issues are NRL in Sydney.And it was a salient reminder.

I've got a little anecdote on that one too, Gary.cried at a news conference when he was talking about his family and the drugs and things, and people were kind of a bit confused by it.Why did that happen?And he decided, I think, that maybe Hazel would go on A Current Affair and explain it all.And the next day, he was shocked to observe, and it was a Monday night, Tuesday, he was shocked to observe that Hazel had knocked the brown low off page one.

So these things are important.That's brilliant.

An email from Jonathan just to finish up on, and he had to go at me in particular, he didn't like me using the expression middle -class welfare when I referred to negative gearing and capital gains taxes.He wrote that Tony was right to push back and pointed a full courage opinion in the Fin Review that increasing taxes on capital to boost revenue is not reform, it's just revenue collection dressed up as reform.But my point is, it's essential.to tax capital.And revenue raising is essential.It's part of the system.

But it's at the heart of the big question.And I know you're starting to take a second look at Tucker Carlson, like all of us at the moment, Tony.But I was listening to one of his podcasts the other day, and he goes on about this all the time.He raises this question constantly.Why do we tax labor at twice the rate of capital?So it's an emerging thought.

It's an emerging thought and it's coming from interesting places.

No, I like the cut of Jonathan's jib.But no, I think there's an overwhelming argument to change the taxation rates for income earners and the way how assets and property are treated needs to be changed.So I think Labor's addressed that part of it, albeit a little improperly.not the way I would have liked, but they really do need to tackle this income tax thing.And I think next year there'll be gas, and then the year after there'll be generous income tax cuts, is my fearless prediction.

Okay, well that's it for today.Again, join us if you can at Carriageworks in Sydney at the Sydney Writers' Festival, nine o 'clock, nine a .m. on Thursday. It's a free event. This podcast was made on the sovereign lands of the Wurundjeri people. It was produced by Daniel Simo, video production, Karisma Luthria. The executive producer is Hannah Parks. I'm Barry Cassidy. And I'm Tony Barry, and this is Back to Back Barries, a Guardian Australia podcast.