Why the blueprint for success is being tested by backlash over CGT and negative gearing changes
The 92-page post-mortem of Bill Shorten’s 2019 loss to Scott Morrison is, in a sense, the constitution of the Albanian government.
Its authors, Labor veterans Craig Emerson and Jay Weatherill, worked closely with Anthony Albanese and his campaign chief Paul Erickson to lay out the blueprint for success in the wake of this defeat.
Shorten has been blasted by a scare campaign over his “big side of town” tax agenda, which includes proposals very similar to those in last week’s budget.
The review concludes: “Labour has not encouraged ordinary Australians to envy the rich. But Labor has not adequately acknowledged the legitimate aspirations of Australians to improve living standards for themselves and their children through their own hard work and initiative.”
“The workforce must embrace the language of inclusion, recognizing the contribution of small and large businesses to economic prosperity.”
These lessons supported Albanese’s big-tent, large-church political model; This brought him success and irritated those who called for a more left-wing, socialist agenda. The Labor party has attracted success-hungry young people to its coalition, as well as wealthier families.
But the backlash to the decision to overhaul capital gains tax relief for shareholders and business owners, not just real estate investors, could alienate parts of that coalition.
Labor MPs did not expect this level of opposition from young people buying shares to make their fortune. Nor are they small business owners (many of whom have switched to Labor in immigrant communities) who dream of selling out. They also noted an increase in negative comments and emails after Albanese made a U-turn, fulfilling his election promise to scrap negative impacts and capital gains.
Albanese has so far avoided provoking the class consciousness of voters. He also eschewed the “arousing” debates that tormented his center-left counterparts around the world. But his “intergenerational equity” budget has created real division.
Some of the concerns raised by technology start-ups are important to discussions about initiating productivity growth. But it’s easier for Labor to reject them because most voters don’t believe they’re committed to creating the next Canva.
As independent MP Allegra Harcama puts it, months of anxiety are harder to manage.
He said the new model of taxing earnings on spending “doesn’t really work” not just for start-ups but for many firms such as tourism providers.
“I don’t think those rules are right at the moment,” he said on ABC Radio, admitting he had underestimated the consequences of removing CGT from productive assets.
The previous fixed 50 percent model was known to fuel world-leading property prices. The new model of taxes that Spender mentions only provides income above inflation.
But the rejig means that high-risk, fast-growing companies, the domain of young entrepreneurs who start with little money, will be taxed more. Low-growth assets, such as blue-chip bank stocks popular in boomer portfolios, will benefit. Amid years of productivity woes, businesses are receiving signals that investing will become less attractive.
The meme depicting Albanians as partners in start-ups is misleading because when referring to taxes, the 47 percent figure is shown as the “equity capital” of the state. And as seen in the videos, such a high rate will not be valid for every business. Despite suggestions to the contrary, earnings reductions will continue.
But the truth is that the 47 per cent tax rate on some entrepreneurs is not the “misinformation” that Labor claims.
Turquoise voters may return to the Coalition in the tax fight, but the opposition has no convincing message for people left out of the system. The lack of any backlash against Labour’s negative gear changes shows how unimaginative the opposition is in trying to win over young voters.
In an economy where the asset-rich are getting richer and households are collapsing due to inflation and weak wage growth, many Australians who will never invest and who will not appreciate Labor’s attempt to reduce inequality have missed this week’s outrage.
It was these disenfranchised voters that Albanese and Chalmers had in mind as they called for breaking election promises. Albanese decided to upset the economic status quo after rejecting calls to use his 94-seat electoral mandate and go beyond last year’s electoral mandate.
But by misjudging the results, Labor may have worsened the trust deficit among anti-establishment Australians and revived a class struggle it had previously avoided.
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Paul Sakkal is the Chief Political Correspondent. He has previously covered Victorian politics and won the Walkley award as well as the 2025 Press Gallery Journalist of the Year award. Contact him securely on Signal @paulsakkal.14.Connect with: X or email.
