“There is an intergenerational bias in the taxation system that rewards holders of great property assets, as opposed to people who earn income.”
The remarks highlight the “generation gap” in the federal election campaign as the Coalition defends tax concessions that can favour older Australians while Labor crusades on fairness for the young.
The Opposition Leader said a Labor government would ensure a “level playing field” and would act on problems with a heavier impact on the next generation, such as restoring penalty rates and acting on climate change.
“The lack of action on climate change is a betrayal of our future,” he said.
“The cuts to penalty rates are a failure to recognise that young people today, compared to 20 years ago, pay their university fees and pay their Medicare levy and they’re holding down part-time jobs and supporting themselves through university.”
Prime Minister Scott Morrison intensified his attack on Labor on Thursday by warning against its plans to raise $56 billion over a decade from new rules on dividend franking credits and $32 billion from curbs on negative gearing and capital gains tax concessions.
Mr Morrison urged voters to reject the Labor revenue hikes in favour of the Coalition’s policies to cut personal income tax over the next seven years.
But Mr Shorten said the tax concessions were tilted against younger Australians as well as older people who were not wealthy enough to invest in capital and assets like property.
“If you’ve been on a pension or a fixed income since 2009, the relative power of your fixed income has diminished,” he said.
“But if you hold big swathes of property assets, since the GFC the relative power you have has increased.”
One week out from election day, Labor has been ramping up the case for change to the tax concessions on the grounds that the greatest benefits flow to those in the top 20 per cent of all Australians by income.
Asked if older Australians with significant assets were being selfish at a time when younger people received fewer benefits, Mr Shorten said he could understand why some opposed changes to the tax system.
“If someone is giving you free money, if someone will give you a tax refund for not paying tax, it’s not selfish to accept it,” he said.
“But it’s not realistic. The argument which has been put to some of our older Australians is that payments from the government, plus the tax-free dividends and income from their super, means they never have to draw down on their principal in the remaining third of their lives.
“Super was designed to make people comfortable in their retirement. It wasn’t designed so that you never have to spend a single cent of it.”
The remarks suggest a Labor government would take a dim view of rules that allow super to be used to pass on an inheritance rather than pay for a retirement.
On penalty rates, Mr Shorten said he would make sure the Fair Work Commission could not “arbitrarily” cut penalty rates again in the way it did in 2017 in the retail and hospitality industries.
“It was a mistake. We won’t want them reducing people’s pay in this way. They didn’t give a correspondent increase in the base rate. It wasn’t some new benefit. It was just a pay cut, and arbitrary.”
Mr Shorten also backed the case for unions and employers to strike enterprise agreements across entire industry sectors, known as pattern bargaining, but said he would not allow a regime that forced employers into deals.
“No-one can be forced to agree to anything. They would have to negotiate,” he said.
With the published opinion polls suggesting the contest between the two major parties has narrowed over the course of the election campaign, Mr Shorten said younger voters should see that the Morrison government was a “20th century government” that had not discovered that two decades had passed.
“They’re eagerly awaiting the end of the 20th century and we’re now going into the third decade next year of the 21st century,” he said.
At a time when mining magnate Clive Palmer is using election advertising to tell voters to “take out insurance” by voting for his United Australia Party in the Senate, Mr Shorten also stepped up his message to voters to back Labor in the upper house.
“End the chaos. Vote the same in the Senate as in the House of Representatives,” he said.
“Do you really want every fringe group holding up every new idea or being bought off. Some of these fringe groups include Fraser Anning, Clive Palmer, Pauline Hanson.”
David Crowe is Chief Political Correspondent of the Sydney Morning Herald and The Age.