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; has announced A$2 billion for a new Climate Solutions Fund to invest in projects to curb emissions; will invest A$1.38 billion in the Snowy Hydro expansion project||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; is pledging a one-time payment to help 3.9 million Australians with their next energy bill||Will allocate A$1 billion to finance development of hydrogen industry; is targeting 50% of new cars to be electric vehicles by 2030; will toughen emissions caps for the nation’s 250 biggest industrial polluters and allow them to earn credits for beating targets or buy offsets internationally|
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 from Jan. 1, 2020; 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|
While unemployment has dropped under the coalition, stagnant wage growth means many Australians are not feeling the benefit of economic growth. Tackling the issue is another major policy divide between Labor and the government.
|Favors retaining the current system under which the Fair Work Commission sets a national minimum wage, based on consultations and research by an expert panel. It’s currently set at A$18.93 an hour, or A$719.20 a week. The government warns changing the system could lower productivity, hurt businesses and see unemployment rise.||Is proposing a “living wage” to replace the minimum wage and says the Fair Work Commission will hear submissions from employers, unions and community groups before setting the figure. Unions have campaigned for the living wage to be set at 60% of median income.|
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. The issue returned to the front pages this year 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
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 revenues improving, the government unveiled pre-ballot sweeteners in the federal budget on April 2, while Labor leader Bill Shorten set out his stall two days later.
|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||Opposes the plan to streamline tax brackets, saying it unfairly benefits those on higher incomes. Plans to reintroduce the budget deficit repair levy of 2% for those with a taxable income over A$180,000|
|Pledged a further A$158 billion in relief in the budget, including a rebate of as much as A$1,080. By 2024-25, tax brackets will be streamlined to ensure 94% of Australians pay 30% income tax or less, with the top rate of 45% kicking in at more than A$200,000||Is pledging to focus more on helping the lowest-paid workers through more generous rebates for people earning less than A$48,000|
|Has fast-tracked cuts to the corporate tax rate for small and medium-sized firms to 25% from current 27.5% by 2021-22; firms with a turnover of less than A$50 million will get an instant tax write-off on new equipment worth up to A$30,000||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
©2019 Bloomberg L.P.