“If the cuts in tax expenditures had been a ploy, it would have been a tax reform and a much more successful outcome, but the Labor Party was increasing the top rate of tax from 45 per cent to 47 per cent which, of course, you know, in public, I opposed.”
In stark contrast to failed leader Bill Shorten’s class-warfare strategy targeted at the “big end of town”, Mr Keating said the top marginal tax rate should be cut further, to no more than 39 per cent.
“I cut the top marginal rate from 60 per cent under John Howard, to 47 per cent. It is still at 45 per cent 35 years later, how pathetic is that? The top marginal rate in Australia shouldn’t be a jot over 39 per cent,” he said.
Just three months ago with all polls showing the opposition poised to win in a landslide, Mr Keating joined forces with his former foe Bob Hawke to endorse Labor’s economic plan and Bill Shorten as the man to run the economy.
“Just as we stared down vociferous vested interests to modernise the tax system and make it fairer with the introduction of the capital gains and fringe benefits taxes, so Shorten and Chris Bowen have rightly tackled the blatant inequity and unsustainability of several concessions and tax expenditures – and much to their credit,” Mr Hawke and Mr Keating said in a joint statement published by The Sydney Morning Herald and The Age.
Labor is struggling to decide whether to junk the controversial policies the party took to the election, put forward by the opposition’s then economic team Chris Bowen and Jim Chalmers to pay for enormous spending pledges spanning childcare and cancer services announced by Mr Shorten at the campaign launch.
The two most controversial policies: curbing franking credits and ending negative gearing are still the subject of a live debate within the party with some MPs saying the tax loopholes will be unstainable in the future, while others believe that electorally toxic.
Mr Keating is a close confidante of Mr Bowen’s who is shouldering part of the blame for Labor’s unexpected loss. He opted to move to the health portfolio after the election, paving the way for Mr Chalmers, a former staffer to former treasurer Wayne Swan, to move into the shadow treasury role.