Bill Shorten’s most revealing sentence


The most dramatic line in Bill Shorten's Budget reply speech was also, perhaps, the most revealing.

"This isn't a tax plan, it's a ticking debt bomb."

It was an attack on the government's tax policies, obviously. But it also showed us how Labor plans to counter one of its most glaring political weaknesses - its long record of deficits.

Scott Morrison and Josh Frydenberg have spent this week proudly spruiking the Budget's predicted surplus of $7 billion in 2019-20.

The words "back in black" have dominated the Coalition's social media channels. And Mr Frydenberg has delighted in pointing out Labor's past failure to balance the Budget.

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In Question Time on Thursday he used opposition MP Andrew Laming's fashion sense to make his point.

"I'm glad he's wearing a shirt from 1989. The year that Labor last delivered a surplus!" Mr Frydenberg said.

"Twenty years ago! Twenty years ago, the Berlin Wall was still standing. The Simpsons had their first episode. And I had a mullet. They were the days!"

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Famed fashion critic Josh Frydenberg. He had abs once. Picture: AAP/Lukas Coch
Famed fashion critic Josh Frydenberg. He had abs once. Picture: AAP/Lukas Coch

You might recall that Tony Abbott and Joe Hockey promised a surplus every year before they won government in 2013. That didn't end up happening. But financial management is still seen as one of the Coalition's traditional strengths.

Mr Shorten clearly plans to attack that strength head-on.

"We will not be signing up to the Liberals' radical, right-wing, flat tax experiment, way off in the future. A scheme which would force a nurse on $50,000 to pay the same tax rate as a surgeon on $200,000," Mr Shorten said in his speech.

He was referring to the bold long term tax policy announced in Tuesday's Budget.

RELATED: Budget's massive long term tax cut

At the moment, the third-highest tax rate of 32.5 cents in the dollar covers those earning $37,001 to $87,000. The Coalition wants to lift that second number to $200,000, abolishing the second-highest tax rate in the process.

It translates into significant tax relief for everyone earning between $45,000 and $200,000, a range which includes more than 94 per cent of Australians. Those people would all end up paying the same marginal tax rate.

Now, it must be said, the change is extremely hypothetical. It's not slated to actually happen until 2024-25, which means the Coalition would need to win at least two elections between now and then.

But Labor will use it to suggest the government has planted, in Mr Shorten's words, a "ticking debt bomb" in the Budget.

"It is neither fair nor responsible to lock in these billions of dollars of tax giveaways, disproportionately flowing to a relative few, and so far into the future," he said.

"This is a time when Australia should be building a strong surplus, a fiscal buffer."

Mr Shorten warned of perilous global economic factors, such as Brexit, the "trade war" between China and Donald Trump's United States, and writedowns in growth.

"What we need is a fighting fund for the country, a strong surplus to protect us from international shocks," he said.

"Tonight I recommit that's what Labor will take to the next election - stronger surpluses, paying down debt faster."

For a few short seconds, he almost sounded like a Liberal.

Bill Shorten delivering his Budget reply speech. Picture: AAP/Mick Tsikas
Bill Shorten delivering his Budget reply speech. Picture: AAP/Mick Tsikas

Of course, as Mr Morrison, Mr Hockey and their Labor predecessor Wayne Swan discovered, it's very easy to promise surpluses and excruciatingly difficult to deliver them.

Kevin Rudd famously declared "this reckless spending must stop" when he was opposition leader. It didn't help him spend any more conservatively in government.

And Mr Shorten made plenty of extravagant promises last night.

He said he would match or beat the government's tax cuts for 10 million workers. He committed $2.3 billion more to Medicare. He said the funding for a series of big infrastructure projects would be locked into Labor's first Budget, not the forward estimates.

There is a lot of spending there, and not all that much spare money to play with.

And that's before you even get into the argument about the effects Labor's other policies - on climate change and wages, for instance - could have on economic growth and the Budget bottom line.

But by attacking the government's financial management, Mr Shorten hopes to neutralise questions about his own.

There is another aspect to the tax debate. It ties into Labor's broader message on fairness.

Mr Shorten leapt on the fact that the Coalition's plan would deliver tax relief of $11,000 a year for workers earning $200,000 from 2024-25.

"We won't back a plan that gives a retail worker on $35,000 less than five bucks a week while an investment banker pockets more than $11,000 a year," Mr Shorten said.

"Do you want your children to get a world class education, or the world's most generous tax subsidies?"

"Do you want the best health care system in the world, or the biggest tax loopholes?"

The government says Labor will impose $200 billion in extra taxes on the Australian economy. It says Mr Shorten's plan would mean higher taxes for everyone earning above $45,000, which is most Australians.

It remains to be seen whose argument will prove more potent.

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