A few years before he would quit Keir Starmer’s imperilled government, Wes Streeting made a date with Paul Keating.
In Sydney at the start of summer 2023, the future UK health secretary visited Keating in Potts Point to discuss big picture economic and social reforms, the state of the world and “the importance of making every second count”.
As he looks set to run for the Labour leadership, Streeting channelled Keating on Thursday, arguing for changes to the UK’s capital gains tax rate, using the example of a Lancashire renter paying more tax on her pay packet than her landlord pays on his investment.
“She slogs her guts out, he puts in far less effort, yet the state rewards him more than her,” Streeting told the BBC. “And we wonder why people are angry.”
Such a simple and arresting explanation of the problem has eluded the Albanese government this week in the parallel debate about CGT in Australia. The traditional budget “roadshow” sales job has delivered decidedly mixed results.
Amid coordinated pushback from wealthy investors and the startup sector, the prime minister and the treasurer, Jim Chalmers, have struggled to cut through on why reforming CGT and negative gearing, as well as a tougher tax treatment for trusts, are necessary and appropriate.
Sign up for the Breaking News Australia emailDespite repeatedly conceding they had anticipated pushback from people with established wealth and an opposition scare campaign, Labor has not been able to shake off claims they’re introducing a “death tax”, or social media memes suggesting Albanese plans to take a 47% stake in startups.
For the record, economist Saul Eslake has pointed out the new 30% minimum tax on trusts applies only to new discretionary trusts. He wrote this week that the changes aren’t perfect but represent welcome “material improvements”.
On Friday, the president of the St Vincent de Paul Society, Mark Gaetani, backed in the changes. “Housing should be treated first and foremost as a basic human right, not primarily a vehicle for wealth accumulation,” he said.
Albanese’s foundational trauma in making the case dates back more than a year, when he tersely dismissed the possibility of property tax overhaul while on the election campaign trail. Waving off a challenge to rule out changes, he said: “Yes, how hard is it, for the 50th time?”
It was a sign of a broader problem: the prime minister’s often defensive style of dealing with critical or uncomfortable questions. While Albanese can’t be criticised for not fronting up to press conferences or interviews, he can be dismissive and gruff on subjects he does not want to discuss.
During the voice to parliament referendum campaign, Albanese labelled some of the criticism as “misinformation” but didn’t try to correct the claims or acknowledge sincerely held concerns and alternative views.
The budget task was made harder when the government went beyond its initial plans to confine the CGT changes to residential housing, in line with its key message about intergenerational fairness. Instead, the broader plan covers all asset classes, part of a suite of changes worth $80bn over a decade.
A DemosAU poll for Capital Brief on Friday found 43% rated the 12 May budget as bad, while just 23% said it was good.
Perhaps frustrated with the government’s difficulties, Keating made his own intervention on Thursday.
In a strong statement, the respected reformer rubbished claims the new arrangements for CGT would undermine entrepreneurship, calling the changes “marginal” and badly needed to improve housing affordability. He said people with vested interests were so animated because they wanted to retain a preference for capital over wage and salary income.
“The simple fact is that income is taxed too heavily while capital is taxed too lightly. That is the fact of it – and has been the fact of it,” Keating said. “And that distortion has made housing unaffordable for a whole generation.”
Tax wasn’t the only challenge to Albanese’s communications style this week. During a visit to Hit100.9 FM in Hobart, presenter Christie Hayes challenged him over the deaths of four women in alleged domestic violence cases in just four days.
Reciting a set of awful statistics, Hayes asked about the more than 90,000 signatures on a petition calling for a royal commission into femicide, gender-based murder by a man.
Albanese’s answer was tone deaf, with video of the exchange quickly shared on social media. “Look, there’s calls for royal commissions about everything,” he said. “What does a royal commission do besides fund lawyers?”
Albanese went on to point to a series of inquiries which had already laid out how to stop the scourge. Governments needed to get on with the long and hard work of implementing their recommendations, he said, pointing to his government’s crisis support payments, emergency accommodation and other assistance.
The prime minister was criticised for the comments. Sherele Moody, the campaigner behind the petition, accused him of hypocrisy, noting he had previously touted the importance of royal commissions, including on defence and veteran suicide.
The social services minister, Tanya Plibersek, completed a round of TV and radio interviews on Friday to clean things up. She defended Albanese and stressed the scale of Labor’s work, including through the latest national plan to combat violence against women. Plibersek pointed out Albanese had been exposed to domestic violence as a child.
Some Labor MPs say privately they are feeling the heat on the budget proposals, and expect the government to consider concessions for the startup sector to cool the criticism, recognising the new cost-base inflation model for CGT will affect new businesses differently. Assistant minister Andrew Charlton said clearly on Friday the concerns were real and flagged more consultation.
Those calling for Labor to stick to its guns admit a better sales job is needed before the budget bills go to parliament.
If Labor is going to deliver on its promises of more economic and social reforms before the next election, a less terse style would be welcome from Albanese.
Being prime minister or treasurer is a good deal harder than being a retired leader, challenger, or without a portfolio, but some Streeting-style clarity to reflect real economic anxieties might help sell the message.
• Tom McIlroy is Guardian Australia’s political editor
