Political bravery and the art of persuasion

Fighting for housing supply and tax reform requires more from MPs than signalling to their electorate. It requires them to show the courage and conviction to fight for core beliefs that might be electorally unpopular but are in the public interest. by jason falinski and tim wilson.

Political bravery isn’t demonstrated by endlessly asking policy questions. It comes from fighting for substantive policy positions against the political wind.

Recently, crossbench teal MPs called on their fellow parliamentarians to “be brave” and to back a discussion on increasing the GST.

Wentworth member Allegra Spender has followed it up with a call for the federal government to tackle housing supply. Her brave answer: a citizen’s assembly. A process, not a policy.

This is a perennial theme of people who switch into politics.

They think the only thing missing to persuade the body politic are undiscovered solutions ready to be imposed when they eventually make the argument.

Instead, Spender qualifies on her website under housing policy “that Wentworth already has some of the most densely populated suburbs in Australia”.

A truly brave answer would be turning up to Woollahra and Waverley council meetings and chastising them for blocking development.

Their reality is found when pesky democracy gets in the way, and their solutions depend on not seeking endorsement from voters at an election.

Just ask the member for Warringah, Zali Steggall. In the last parliament, she thought her election would usher in a new era of climate policy.

Her first act was to introduce new legislation built around giving unelected commissioners a veto over elected representatives on climate policy. Unsurprisingly, the parliament thought otherwise.

Governing requires making tough choices, weighing trade-offs and being held accountable.

The teals are slowly discovering this. At the last election, they campaigned on the importance of integrity and on ending fossil fuel subsidies, but that didn’t stop teal MPs voting for nearly $1 billion in new subsidies for coal as part of Labor’s energy price cap legislation.

After the initial call for bravery, Spender has opined like a technocrat frustrated with democracy that “tax reform is too important to be hostage to party politics”.

And like her housing citizens’ assembly, the solution is to “set up a process, where economists, business leaders, unions, social and environmental leaders can come together and discuss their goals for a better tax system”.

Notice one group missing: the voting taxpayer.

At Spender’s first meeting of these interest groups, the usual platitudes were delivered at the start of the meeting before the media was evicted and discussion was held behind closed doors.

You don’t need to be a fly on the wall to predict what was said. Vested interests wanted to remove taxes on the things and people they represent and add them to those and the people they don’t.

As former Treasury secretary Ken Henry found, writing theoretical white papers doesn’t make for saleable reform.

Politics is a contest of ideas. Tax is how we pay for them. That is why tax reform is hard. It is about different visions for our nation. You have to persuade voters to enact reform, not impose it on them.

We romanticise the introduction of the GST but we forget it was preceded by nearly two decades of discussing how broke the tax system was.

By 1998, the debate wasn’t whether we need reform, but what reform was required. The Coalition put forward tax reform with a GST. Labor argued for “a better plan for tax reform”.

The intergenerational report correctly highlighted the tax base is too narrow and that it shifts the burden on the working through income tax, while those living off assets and superannuation live in tax-preferential or tax-free environments.

But that assumes everyone agrees this is the structural problem. No such agreement exists.

Just ask the teals. As candidates aspiring to represent affluent communities with a disproportionate number of self-funded retirees, one of the first things many did was declare they wouldn’t hit them with higher taxes.

They could declare it non-core like Goldstein MP, Zoe Daniel, promising not to “kick start” a debate about increasing the GST or abandoning stage three tax cuts, only to do just that once elected; but one of the lessons from the GST debate is that trust is essential to building public support and you must take a change of heart to an election.

The question of how to make the tax system more intergenerationally fair will give a very different answer to one that is about a system that promotes the most growth, or that provides maximum security for the vulnerable, or lessens the burden for the poor.

Among economists, you’ll be told how our system is inefficient but that making it more efficient may not make it as equitable as the social groups might like. As a recent ANU study found, under an increase in GST to 15 per cent, high-income households would save about $2140 annually and those on low incomes would pay more tax.

Perhaps that’s why those vox-popped leaving a harbourside Woolies with a full trolley might have a different view about increasing the GST compared to those walking out of a fringe suburb’s Aldi stressed over the receipt.

That’s why the Howard government highlighted the injustices of the old wholesale sales tax. Under WST, there was no tax on a private jet, but a 30 per cent tax on a compact disc.

The solution was a universal 10 per cent tax on goods, and for the first time, an equivalent tax on services, which were a growing share of consumption.

Even after fighting, John Howard didn’t get everything. In the name of helping low-income households, the teals of the day, the Australian Democrats, ensured the goods and services that are disproportionately consumed by the wealthy are GST-free.

Fighting for housing supply and tax reform requires more from MPs than signalling to their electorate. It requires them to show the courage and conviction to fight for core beliefs in the public interest.

That passion is what normally spurs people to join political parties and run for parliament, at least until they’re replaced by callow teals.

Jason Falinski is President of the NSW Liberal Party and a former federal Liberal MP. Tim Wilson is a former federal Liberal MP.