Franking credits policy is coming back to bite Labor

He might, for example, have paid more attention to the second part of Machiavelli’s advice to reformers: «The reformer has enemies in all those who profit

by the old order and only lukewarm defenders in all those who would profit by the new order.»

In this respect, Bowen would have reason to be disappointed that in his prosecution of his franking credits policy he has found himself a bit like Machiavelli himself in his period in exile, alone and unsupported by “lukewarm’’ colleagues who are ill-equipped to argue the complexities of tax policy.

Opposition Leader Bill Shorten’s insistence he was «not for turning» on the franking credits tax was hardly a call to arms in the style of a Paul Keating. To me it sounded platitudinous and unconvincing.

Speaking of Keating, his observations about his protege Bowen make interesting reading in light of the latest developments.

«You can’t change the country without possessing the mad gene; the brave gene … Bowen has that gene, and those who have it get the big changes made,’’ Keating told The Sydney Morning Herald on the eve of the 2016 election in wh

ich Malcolm Turnbull survived by a single seat.

Geoff Wilson.

Geoff Wilson.Credit:Chris Pearce

Labor’s nervous Nellies – judging by a sampling of Labor caucus opinion nervousness is rising – are not convinced that what the party needs at this stage of proceedings is a «mad» and «brave» gene, as opposed to a «steady as she goes» gene.

In all of this, Bowen would do himself a favour if he put aside his smug «gene» in which he advises the country’s fastest-growing demographic – people of retirement age – they were «perfectly entitled to vote against us».

Wearing the Keating mantle of being both a «policy changer» and a «policy informer», Bowen has enabled opportunists like the franking credits king, Geoff Wilson of Wilson Asset Management, to make capital at Labor’s expense.

Wilson’s business marketing model offers 100 per cent franking credits for its signature funds to attract subscribers.


His relative, Liberal MP Tim Wilson, has joined the fray against the Labor tax reform by making questionable use of his role as chairman of a parliamentary committee to advance a partisan campaign.

Anyone who expected the member for Goldstein to play by the Marquis of Queensberry rules politically has not been paying attention.

Whatever its merits, Labor’s attempt to put an end to a tax giveaway to people who have paid little or no tax in the first place – not present in any other jurisdiction in the world – is turning into a political liability at a moment when the party could reasonably have expected a trouble-free run to power.

If there is one simple rule of politics, it is that it’s much easier to giveth than taketh away.


That said, we are unlikely to hear the shadow

treasurer admitting one of his signature tax changes has become more trouble than it is worth, or that it is now suffering a fate akin to a political turnover. This is a footballing expression when one team reverses the course of play.

In other words, what on the face of it might have seemed like a good idea at the time is now beginning to look like bad politics.

The verdict of a veteran Labor pragmatist: «Given his time over, this is something Bowen might have done in his first budget. The question should have been: will this win or lose us votes. If the answer is lose then leave alone.»

Of course, no federal election is fought on a single issue, but what Bowen has enabled with the best of intentions, if not the most elegant implementation given the original proposal has been refined on one occasion – and may well require further modification – is an opportunity for a chaotic opposition to put some distance between itself and its internal ructions.

A conservative house is hopelessly divided against itself.

Illustration: Jim Pavlidis

Illustration: Jim PavlidisCredit:

Machiavelli, who lived through – and was a casualty of – intense infighting, even bloodletting, during the era of the Borgias and Medicis, would recognise the symptoms.

Finally, in his assault on retirees’ entitlements, Bowen might have paid more attention to one of Machiavelli’s more, well, Machiavellian observations: «People more quickly forget the death of their father than the loss of their inheritance.»

Tony Walker is a vice-chancellor’s fellow at La Trobe University and a regular columnist.

Tony Walker writes on politics, North America and the Middle East. Tony is the Financial Review’s dual-Walkley Award-winning international editor whose foreign postings have included Washington, Beijing and Cairo. He received a Centenary of Federation Award for contributions to Journalism and the Paul Lyneham Award for Excellence in press gallery journalism.

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