The Policies That Will Decide Who Wins Australia's Election
(Bloomberg) -- Australian Prime Minister Scott Morrison is seeking another term in office in elections expected in May. But with the main opposition Labor party leading in opinion polls, his Liberal-National government has a fight on its hands.
The following are the key policy areas that will determine whether Morrison can pull off a surprise victory, or whether Labor will win power for the first time since 2013.
A key dividing line and an emotive topic in Australia -- which is blessed with natural wonders such as the Great Barrier Reef yet remains reliant on mining and exporting fossil fuels to keep its economy ticking.
|Has dropped plans to legislate the Paris Agreement goal of cutting carbon emissions by at least 26% from 2005 levels by 2030||Is targeting a 45% cut in emissions and 50% of power to come from renewables by 2030|
|Aims for 23.5% of power to come from clean sources by 2020, but there is no official target beyond that||Plans to provide an additional A$10 billion over five years to support large-scale renewable generation and storage projects|
|Is critical of wind and solar, saying such renewable sources lack reliability; hasn’t ruled out underwriting new coal-fired power plants, though plans to plant 1 billion trees by 2050 to help remove greenhouse gases||Will allocate A$1 billion to finance development of hydrogen industry|
Housing affordability is a flashpoint in the campaign. After a five-year property boom priced many young Australians out of the market, Labor is pledging to scale back tax perks for property investors known as negative gearing. But with the market now falling, the government says Labor’s plan could crash values and derail the economy.
|Will retain negative gearing, which allows investors to claim the costs of owning a rental property, including mortgage interest, as a tax deduction against other income||Will restrict future negative gearing to investment in new homes; existing investments won’t be impacted|
|Will keep the 50% discount on capital gains tax paid when an asset such as property is sold||Will halve the capital gains tax discount to 25%|
Another battle is being fought over imputation or franking credits that allow shareholders to reduce their overall tax liability. Labor is planning to tighten the concessions, saying they cost the budget more than A$5 billion a year. The coalition says Labor’s plan would remove an important source of income for retirees.
|Supports the system that ensures company profits aren’t double taxed when paid out to shareholders as dividends||Says the 2001 rules are too generous and will scrap cash refunds, except for welfare recipients such as people on a state pension|
|Under rules introduced in 1987, shareholders use imputation credits attached to dividends to reduce their overall tax liability||Will retain the original 1987 system|
|Under changes introduced in 2001, some individuals and funds receive a cash refund if their imputation credits exceed the tax they owe|
The coalition won office in 2013, in part due to its pledge to crack down on people smugglers ferrying refugees to Australia and ‘Stop the Boats.’ Its tough policy of holding refugees in Pacific island camps while their claims for asylum are processed, and ensuring none will be settled in Australia, has largely seen the boat arrivals dry up. But the issue is back on the front pages after Labor helped force through a law to give doctors a greater say in evacuating sick refugees to Australia for medical treatment.
|Opposes the law, saying it will embolden people smugglers and lead to more boat arrivals||Says Australia has a duty to treat refugees humanely and that the new law will only apply to people already on Manus Island and Nauru; accuses the government of ramping up rhetoric on border security to win votes|
INCOME & COMPANY TAX
The coalition and Labor have spent much of the past year wrangling over planned cuts to personal and corporate taxes and the issue is set to take center stage in the election. With government revenues improving, analysts expect some pre-ballot sweeteners when the federal budget is handed down on April 2.
|Passed income-tax cuts worth about A$144 billion over 10 years in June, including relief for low and middle income earners and phased changes to tax brackets for the higher paid||Says the income tax cuts aren’t affordable and are directed mainly at the rich; is vowing to repeal all but the first stage of the changes if it wins office|
|Has fast-tracked cuts to the corporate tax rate for small and medium-sized firms to 25% from current 27.5% by 2021-22||Backs the company tax cuts, but wants to keep the rate at 30% for big firms.|
Aims to boost business investment by allowing firms to immediately expense 20% of the value of eligible assets worth more than A$20,000
|Plans to reintroduce the budget deficit repair levy of 2% for those with a taxable income over A$180,000|
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