The election battleground around tax was mapped out when Labor announced it would reform negative gearing. If elected, Labor will confine the practice to new housing. Labor has also said it would halve the capital gains subsidy for assets bought after July 1, 2017 – reducing the capital gains tax discount from the present 50% to 25%. The family home will remain tax free.
The Coalition has definitively ruled out any reform of negative gearing. Prime Minister Malcolm Turnbull attacked Labor's "reckless" policy as driving down property values. This claim was refuted by the Grattan Institute, which was also critical of Labor's plan. It said this approach was likely to create a new distortion in the housing market.
A major aspect of Treasurer Scott Morrison's "jobs and growth" budget was a plan to give small businesses a tax cut that would be expanded to all companies within ten years. Labor has rejected almost all of the proposed company tax cuts, limiting them to companies with turnover of less than A$2 million.
Both parties have agreed to an increase of the 37% tax threshold from $80,000 to $87,000. But it remains to be seen whether either party will tackle more wholesale tax reform
The other major area of tax reform is likely to be superannuation. In the federal budget, the Coalition announced a raft of changes to superannuation that has included capping concessional contributions to $25,000, the introduction of a $500,000 lifetime cap, and a tax off-set for low-income earners.
Labor released its policy last year. It pledged to make retirement income "sustainable" by reforming the tax exemption for earnings on superannuation balances that exceed $1.5 million; and reducing the Higher Income Superannuation Charge threshold from $300,000 to $250,000. But in his budget reply, Bill Shorten pledged to block any retrospective changes to super.
The other major issue for the Coalition is tax avoidance, particularly with the revelations from the Panama Papers on the widespread use of tax havens to – legally or otherwise – avoid paying tax. The Coalition announced what has been dubbed a "Google Tax" designed to tackle multinational companies structured to avoid tax, including a diverted profits tax that follows the UK model.
Labor's anti-tax-avoidance strategy, released in April last year, focuses more on tightening up the rules that regulate excessive tax deduction claims, and improving data-matching rules to achieve better compliance. It's a complex area, but some say the policy fails to recognise how easy it is for big firms to restructure their finances and get around rule changes.
With the unemployment rate trending downwards, the issue of jobs may not feature as heavily as it has in previous election years. But flat wages growth and industrial relations issues – including penalty rates and union power – will grab headlines during the campaign.
The Coalition’s signature jobs policy will see A$750 million spent on helping young people find jobs. The focus on internships is a move away from the discredited Work for the Dole program, but may not be enough to help disadvantaged jobseekers become job-ready.
Underemployment remains a stubborn problem yet to be addressed by either side of politics. Some say we’re building a nation of PhD baristas. Beyond the headline unemployment rate of 5.7%, part-time jobs were up and full-time jobs and total number of hours worked down in April.
Labor has pledged to protect weekend penalty rates. The Productivity Commission has recommended these be aligned with Saturday rates for hospitality, retail and entertainment workers working on Sundays.
In the 2013 election campaign, then-opposition leader Tony Abbott repeatedly pledged to create two million new jobs over a decade if the Coalition was elected. In reality, jobs growth has been highly volatile since it took office. And there are many reasons we should be wary of claims made by politicians about the number of jobs their party has "created".
As with the 2013 federal election, the economic management credentials of both parties will be under scrutiny. The received wisdom is that the conservative parties are intrinsically better at shepherding the economy than Labor, although this is contestable.
In any case, Australia's economy is facing a China slowdown and lower commodities prices, despite some positive growth signs. However, spooked by the possibility of deflation, the Reserve Bank cut rates on budget day, on the eve of the election campaign.
And, prior to the federal budget, credit rating agency Moody's warned Australia's coveted AAA rating might be at risk if the upward trajectory of government net debt/GDP continued, and that revenue measures other than spending cuts might be required.
So, the Coalition has been careful to craft a message that its budget is about a long-term economic plan, rather than an election cash splash. The budget has projected a slight decrease in the deficit from A$39.9 billion to $37.1 billion next financial year, with a return to surplus now set at a distant 2021.
Payments as a share of the economy are projected to fall from 25.8% in 2015-16 to 25.2% in 2019-20. Yet the government’s net debt sits at $285 billion or 17.5% of GDP, while its highly ambitious assumption that nominal GDP, a key driver of tax revenues, will rise from 2.5% in 2015-16 to 4.25% in 2016-17 – and 5% in the following three years – has been questioned.
To overcome the perception it is a less reliable economic manager, Labor has taken the unusual step of announcing budget savings and tax increases totalling $71 billion. It says this means its election promises are fully funded.
The position of both parties on foreign investment is likely to be another point of contention during the campaign. The Coalition has sent mixed messages on the sale of the S.Kidman & Co estate.
Education is set to be a key point of policy difference for this election. Both major parties have now committed to giving extra "needs-based" funding to schools. The Coalition is offering A$1.2 billion for 2018-20; Labor’s promise is $4.5 billion for 2018-19 as part of the Gonski reform model.
While, for Labor, "needs-based" means allocating funding to support disadvantaged children who need it the most – which includes Indigenous children and those with disability – the Coalition has not released details about how it will determine “need”.
Strengthening teacher quality, early intervention programs in every school, increasing Year 12 completion rates to 95% by 2020, and focusing on improving STEM, coding and entrepreneurial skills are also priorities for Labor.
Under the Coalition, conditions will be placed on funding for schools, such as introducing literacy and numeracy tests for students in Year 1; minimum literacy and numeracy standards for Year 12 school-leavers; and basing teachers' pay on performance.
On higher education, the Coalition has received criticism for providing a lack of certainty around the future of the sector. This year's budget failed to offer further clarity or solutions. All reforms will be delayed for yet another year.
The key areas being discussed include how much government and students should pay towards the cost of degree courses, and whether universities should deregulate fees for certain courses.
There is also interest in how to reduce the escalating student loan debt. This includes introducing a higher contribution rate for high-income earners, lowering repayment thresholds from the current $54,126 to around $40,000–45,000, and recovering debts from deceased estates.
Labor has been pretty quiet around its plans for higher education. Back in September, it announced it would increase funding by $2,500 per student each year from 2018. And just this month, it outlined plans for how to reform the vocational education and training (VET) sector, which includes imposing an $8,000-a-year cap on VET student loans.
Elsewhere, discussions centre around whether funding for education and research should be split out; how to best reform teacher training; boosting attendance rates in early education; and whether universities should make their admissions process more transparent.
The Coalition diffused a potential election time bomb in April when it put an end to Commonwealth-state disputes about hospital funding – for now. The funding fight was a hangover from the 2014 budget, which announced Commonwealth contributions to hospital admissions would reduce from 2017.
To fill some – but not all – of the shortfall, the Commonwealth in April offered the states an additional A$2.9 billion for the three years to 2020. It's not a long-term solution but it keeps hospitals out of the spotlight for the election.
To keep patients out of hospital, in March the Commonwealth committed to test a new model of caring for Australians with chronic diseases such as diabetes and heart disease. Under the Health Care Homes trial, patients will register with one clinic for their medical, nursing and allied health care related to their chronic disease. The clinic will tailor the care to the patient and will be paid a lump sum rather than per visit.
The Coalition has allocated just $21.3 million for the trial but it's unlikely to even be enough to set up the required infrastructure. Aside from the lack of funding and detail, the idea has received widespread support.
We've heard very little from Labor on its health policy, apart from its opposition to the Coalition's plan to scrap the bulk-billing incentive for pathology services. This was announced in December. Labor introduced the $1.40-$3.40 incentive in 2009 to encourage pathology companies to not charge patients an out-of-pocket cost for blood and tissue tests. Labor says scrapping the rebates will prevent patients from accessing lifesaving services, and is a major threat to Medicare. It's likely to campaign hard on this issue.
The GP co-payment was killed off in 2015 but it's unclear whether the Coalition will introduce other "price signals" for those who can afford to pay something for their own care. Labor is likely to focus on the importance of Medicare as a universal health scheme that covers all Australians, no matter their wealth or location.
The GP rebate freeze is, however, likely to be on the election radar. GPs can charge patients what they like and because Medicare rebates haven't increased since 2014, GPs may reduce bulk billing and increase their fees to cover the shortfall. Doctors will be lobbying hard for a commitment to lift the freeze, which is due to continue until 2019-20.
Another area to watch in the lead-up to the election is private health insurance. A government review is currently investigating value for money and transparency for consumers looking to compare products.
A separate government review is examining the cost-effectiveness of items on the Medicare schedule; some outdated or costly items will get the chop. But it's unclear when these reviews will be released or if they will inform any Coalition election promises.
Where they differ is on how, and by how much, to do it. Labor's proposals are more ambitious, calling for a 45% reduction in emissions by 2030 relative to 2005 levels. This is a far deeper cut than the 26-28% announced by Tony Abbott last year ahead of the Paris talks, which remains the Coalition's policy.
Labor's newly announced plan for phased-in emissions trading schemes for power generators and other heavy industries suggests that Bill Shorten thinks voters can still be convinced on pricing carbon (with a firm focus on the biggest emitters), despite the vitriol that was poured on Julia Gillard’s carbon tax during the 2013 campaign.
The Coalition remains committed to its $A2.55 billion Emissions Reduction Fund (ERF), which offers public funding to carbon-reduction projects, despite persistent concerns that the scheme is still not ambitious enough to get the job done.
Carbon pricing remains anathema to the Coalition, as shown by Treasurer Scott Morrison's hailing of the carbon tax repeal in a Budget 2016 speech that otherwise steered well clear of climate issues. Yet the ERF could be easily tweaked to become a carbon market, suggesting that the biggest hurdle would be political rather than practical.
Labor is also looking to outflank the Coalition on renewable energy, opting for a target of 50% by 2030 (the Greens have called for 90%). Last year the Abbott government cut the official Renewable Energy Target.
The climate debate has been galvanised by the severe bleaching on the Great Barrier Reef.
Last year, Environment Minister Greg Hunt successfully avoided the ignominy of the reef being added to the list of World Heritage in Danger. But the government has also approved the world's biggest coal mine in the nearby Galilee Basin, prompting accusations of a lack of joined-up thinking on these two issues.
We don't yet know the full fallout from the CSIRO's planned cuts to climate science, which attracted widespread condemnation.
There is one huge environmental issue of which we’re likely to hear very little during the campaign. Leaving the Great Barrier Reef aside, neither major party has a significant policy on wildlife conservation. This election is set to be less about nature and more about nurturing the economy.
In 2013, the then-Abbott opposition premised its asylum-seeker policy on being able to turn back boats on the high seas that were bound for Australia. When implemented, it was widely criticised for breaching international law, acting as an irritant in the relationship with Indonesia, and placing a veil of secrecy over boat arrivals.
Despite this controversy, Labor at its 2015 national conference voted to leave open the option of boat turnbacks if it wins government.
Both Labor and the Coalition also support a policy of processing all boat arrivals in offshore detention facilities, and not allowing them to resettle in Australia. Yet while many are found to be refugees, the question remains as to where the men, women and children languishing in offshore detention on Manus Island and Nauru will go.
This has been brought into sharp focus recently following a Papua New Guinea court decision that the detention of asylum seekers on Manus is illegal. The PNG government has since announced that the centre will close.
The Coalition’s attempts at finding a regional fix to the resettlement problem have so far failed. An agreement struck with Cambodia has come at a cost of A$55 million and seen just two refugees resettled there.
In September 2015, in one of the Abbott government’s final acts, Australia committed to resettling an extra 12,000 refugees fleeing the conflict in Syria. But with the spectre of terror attacks continuing to loom large throughout Europe amid spurious links to refugees, expect the asylum-seeker issue to continue to be viewed through the prism of national security and community safety during the election campaign and beyond.
Last May, the federal government cut Australia Council funding by around A$104 million to create its National Program for Excellence in the Arts (NPEA). After an outcry and a Senate inquiry into the impact of the arts budget cuts, it later returned $32 million to the Australia Council. It also renamed and revised the NPEA, establishing the Catalyst fund to distribute $12 million annually in “innovative projects”.
The Turnbull government announced further cuts, in December, of $52.5 million to the arts sector over the next four years as part of the process of increasing its “efficiency dividend”. These have targeted national cultural institutions such as the National Library of Australia and the Australian film industry.
Both the Coalition and Labor have applied the “efficiency dividend” across the public service, but the last Labor arts minister, Simon Crean, used the minister's discretion to apply an exception from the efficiency dividend cuts to the cultural institutions.
In an open letter to the prime minister, the federation of national peak arts organisations, Arts Peak, has called on him to stem the tide of relentless funding cuts to arts groups. Small, artist-run collectives in particular are struggling to survive.
Labor has pledged to restore the Australia Council arts budget fully and will abolish new funding bodies established by George Brandis and Mitch Fifield that operate with the Australia Council funds.
Both the Liberal and Labor parties, meanwhile, are tipped to announce “bricks and mortar” funding for key arts institutions in Melbourne and Sydney before the election.
Early on, Prime Minister Malcolm Turnbull announced his desire to update Australia's urban infrastructure. He spoke of cities as hubs of innovation, with digital connectivity transforming how cities work.
Turnbull abandoned Tony Abbott's roads fixation by offering to fund urban rail. His government has committed to light rail projects but did not announce any significant new infrastructure spending in the budget. Labor supports several rail projects recommended by Infrastructure Australia.
Turnbull has advocated 30-minute cities, using value capture models to finance public transport. Current big state projects are road-based with debatable benefits – such as Westconnex in Sydney and East West Link in Victoria. Canberra is resisting the latter's axing.
The Commonwealth's asset recycling program offers states incentives to sell assets to finance projects. But privatisations of assets such as ports face political hurdles and questions about anti-competitive contracts.
The current minister for cities and digital transformation, Angus Taylor, wants a greater focus on regional cities. Transport Minister Darren Chester, who is also regionally based, may sympathise.
Another big difference involves the high-speed broadband "smart cities" need. Labor initiated a fibre-to-the-premises National Broadband Network. The Coalition promised a lower-tech fibre-to-the-node model sooner and at lower cost. Instead, it risks being late, over budget and obsolete.
Finally, green infrastructure is coming into its own. Water security and heat-adapted urban environments, as well as more resilient and sustainable infrastructure in general, are prerequisites for creating the best cities we can in a time of climate change.
Science isn’t often a headline political issue, but this election might be an exception, particularly given Prime Minister Malcolm Turnbull’s penchant for innovation and his vocal enthusiasm for science, technology, engineering and maths (STEM).
While the change of prime minister and shift in rhetoric sparked optimism within the scientific community, there have been only a few significant changes in policy or funding in this area.
The National Innovation and Science Agenda (NISA), announced in December last year, did inject A$1.1 billion into a range of STEM initiatives. And the National Collaborative Research Infrastructure Scheme (NCRIS) – which funds scientific infrastructure, such as telescopes and supercomputers – ceased being hostage to politics and received a ten-year assurance of continued funding.
Yet this comes after years of budget cuts have forced universities, research institutions and the CSIRO to tighten their belts and trim staff. This has sometimes compromised their ability to conduct top-tier research.
Funding is excruciatingly tight for individual researchers too. Fewer than 15% of grant applications to the National Health and Medical Research Council (NHMRC) are funded each year. This means many projects that could potentially lead to breakthrough medical treatments are left unfunded, and the scientists left in the lurch to either leave the research sector or find employment overseas.
We can expect the scientific community to make some noise about increasing research funding and restoring some of the cuts from the Abbott era to universities and the CSIRO. However, in the wake of the budget, there is little indication that the government has any intention to make major changes to research funding.
Another hot election topic is sure to be the National Broadband Network (NBN). Turnbull as communications minister oversaw the redesign of the NBN to bring fibre to the node rather than to the premises, as touted by Labor, although this approach has been roundly criticised by industry and academic experts.
Labor is promising to restore the original plan of fibre to the premises, which may sway voters who value higher internet speeds and the services they enable.