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Richardson: Labor hurts the ones it loves

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There is no doubt the federal budget’s raids on state health coffers go too far. They are deep, deliberately so, and targeted to not merely salvage the budget bottom line but to twist the state governments’ collective arms to acquiesce to mass asset sell-offs and an adjustment of the GST regime.

It’s not just a question of cuts to bed numbers and hospital administration; smaller community health projects will fall completely by the wayside. An SA Health program designed to promote health and wellbeing in workplaces, for instance, was to be funded entirely from Commonwealth investment. Now it is little more than a philanthropic thought-bubble.

But the State Government’s response to the budget cuts is equally political; beyond merely offsetting the shortfall, it intends to heap pressure on the Abbott Government to reverse its cuts (at least in part) by drawing an inextricable correlation in the public mind between the Coalition and budget pain.

And in this, they too have gone too far.

Specifically, the effective increase in the Emergency Services Levy for households and businesses is punitive. Technically, it is the abolition of a Government remission for all but the most vulnerable. But it was touted as a doubling of Labor’s ESL take. In reality, for many the impost will surge well beyond that, as the amount you owe is calculated on the value of your property. And many, many homeowners are getting a rude shock when their bill arrives.

Independent MLC John Darley argues it’s effectively another form of land tax – and as a former valuer-general he should know.

Forget bills doubling; Darley says the lowest increase he’s yet seen is 140 per cent, and he’s seen them go as high as 400 per cent. His own ESL bill rose from around $300 to $900. For households struggling with among the highest utility costs in the country, this is a cruel blow; and it will be one for which Jay Weatherill, not Tony Abbott, will wear the political opprobrium.

The State Government has hit every wrong note on this tax slug since it was announced as one of the nasties in Tom Koutsantonis’s maiden budget. On that day, the Treasurer recognised the measure would hurt, but insisted it was his most palatable option, since it is a progressive tax. In other words, the more your house is worth, the more you pay.

And, he was careful to add, if Tony Abbott and Joe Hockey reverse their health and education cuts, the ESL hike is history.

But since then Labor has collectively failed to tar the Commonwealth with the culpability for the increase, particularly since the nasty surprises started arriving in letterboxes across the state. Some schools will be forced to pay several thousand dollars more each year, which will doubtless be passed on in fees. Likewise, businesses will be forced to pass on rising costs to their customers.

So much for a “progressive” tax.

The reality of Labor’s situation, though, is that it risks burning the suburban swinging voters that delivered it an unlikely victory in the metropolitan marginals, as Weatherill so proudly trumpets.

Weatherill himself tends to adopt his “annoyed Premier” persona when pressed on the topic, which somehow doesn’t convey the requisite sympathy.

Quizzed on Wednesday about whether homeowners would be shocked by the quantum of their bill increases, he shrugged: “We couldn’t have been any clearer.

“Look at the budget papers, we set it out in detail with detailed information about the precise effect: it effectively doubles the amount of revenue we’re collecting from the South Australian community in relation to the Emergency Services Levy, that’s the actual effect.”

As if the average voter is at fault for failing to delve into the precise budget lines, rather than relying on Labor’s simplistic political rhetoric that a 50 per cent rebate would be scrapped.

At any rate, the “detailed information” set out in the budget merely states that “for a median-valued residential property in Adelaide, the estimated increase in the ESL liability in 2014–15 will be around $150”. Which suggests either the Government misunderstood the increasing value of property, or it’s botched its sums.

It took another few minutes of similar quibbling before Weatherill generously conceded: “I know they hurt, and I know it’s unpleasant, but that’s the reality of the situation.”

That’s that, then.

The reality of Labor’s situation, though, is that it risks burning the suburban swinging voters that delivered it an unlikely victory in the metropolitan marginals, as Weatherill so proudly trumpets.

Shadow Treasurer Rob Lucas says the electorate will still be smarting from the vicious tax grab in the lead-up to the 2018 poll, and I’m inclined to agree. Even if it only lasts a year, being forced to pay hundreds of dollars (or more) ostensibly to fund emergency services that you know is effectively being siphoned into a general revenue funding hole just ain’t a vote-winner.

Particularly when Labor’s forging ahead with relatively esoteric plans such as extending the O-Bahn underground for 500 metres, to save four minutes either way, at a cost of $160 million. Surely that could have been “reprofiled” into non-existence without too many lamenting the broken election pledge.

The Government’s fixation on keeping its poll promises is laudable, but given most Labor types didn’t think they’d win anyway, a few of those promises probably didn’t get a lot of diligent consideration between conception and announcement. And in any case, they didn’t go to the election promising massive ESL bill increases either, just as Abbott and Hockey didn’t go to the federal poll promising a slash and burn raid on state coffers.

There’s no doubt the Weatherill administration’s hand has been forced, but its solution has been hamfisted.

Koutsantonis spoke of his budget remedy with reference to “Labor values”, but historically in South Australia, the ALP has valued electoral success.

And there is nothing noble, and certainly nothing politically savvy, in hurting the very people who re-elected you.

Tom Richardson is InDaily’s political commentator and Channel Nine’s state political reporter.

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