Too Big to Ignore
They are boomers, hear them roar. Labor is mistakenly chasing young voters when in fact it is the over-55s who swing elections, says Nick Cater.
Labor’s strategic decision to keep Bill Shorten away from robust talkback radio may yet prove to be a courageous step towards victory on May 18. Or it could just be a courageous step towards nothing.
If Shorten assumes that the audience that begins its day wth Alan Jones on Macquarie Radio and ends it with Paul Murray on Sky News is silver-haired, conservative and inclined to be grumpy, he’s right. But if he thinks he can win the election without them, or at least some of them, he’s clearly misinformed about the importance of their vote.
While Labor has succeeded in cementing its grip on the millennials at recent elections, it has done so by taking sides on economic and social policy questions that divide the generations.
Like it or not, the over-55s are the fastest growing voting block in the country. And thanks to modern medicine they will be with us for some time.
On housing and the taxation of wealth, Labor has adopted policies that offer support for youth at the expense of the elderly. The abolition of negative gearing and reduction of capital gains tax concessions for property investors, ostensibly as a lever for increasing the availability of housing stock and lowering prices, favours those anxious to enter the housing market and penalises established owners.
The abolition of franking credits and changes to superannuation and investment rules serves to redistribute wealth from the old to the young.
Labor’s progressive social policies appeal broadly, if not exclusively, to younger voters, whose progressive outlook on life has been reinforced by exposure to university. The percentage of voters who have been to university decreases on the older cohort.
The appeal of Labor’s economic policy relies on a certain amnesia. It is more likely to entice those who did not experience the last economic downturn in 1990-91 and therefore are insensitive to the policy settings that might hasten our way to the next.
Labor’s policy agenda is likely to seem more credible to those who have little or no understanding of the failure of economic and social central planning in the Soviet bloc and the superiority of free markets.
The distribution of seats in the current parliament reflects the skew in Labor's appeal to the young. Of the 57 seats in the lower house in which voters under 35 out-number those over 55, three quarters are held by Labor. The Coalition, on the other hand, holds two-thirds of the 93 seats in which the over-55s predominate.
It is the over-55s, then, who hold the key to this election. They are among the most wealthy such cohort in the world. They are undoubtedly the most wealthy retirees in our history. They represent a growing sector of the population who are taxed principally on their wealth, rather than from their income.
In seeking to take a greater share of GDP in taxation without unduly disturbing the current settings on income tax, Shorten has chosen to go after wealth. In a variety of subtle ways, he is increasing the burden on the prudent, those who take responsibility for funding their own retirement and save a proportion of their income others would chose to spend.
It is wrong-headed philosophically to deter people for taking responsibility upon themselves, but also fiscally foolish, insofar as those with the will to survive on their own resources are obliged to make a claim upon the benevolence of the state. And it will prove to be wrong-headed politically, if not at this election then at one in the future.
For those who rely more on accumulated wealth than on earnings for their income will grow until at least the end of this century.
There are signs that Labor may now be regretting putting all in one basket, and pursuing the youth vote regardless of the consequences at the other end of the age spectrum.
Shorten’s signature policy on cancer treatment appears to be an attempt to reach out to the sector he has long ignored, mindful that the incidence of cancer grows exponentially for each year of life beyond 50.
Yet the cynicism of this move has been widely recognised. A torrent of calls to talkback radio testifies that most cancer sufferers most of the time receive outstanding treatment in the public as well as the private health system.
If Shorten wants to woe the silver-haired voters, he’ll need to work harder than that.