As in the Galaxy poll of Queenslanders a couple of weeks earlier, a bit over a third of voters wanted the tax cuts in full. In the Galaxy poll, 55% wanted all the tax cuts to be put into superannuation. In the Morgan Poll, 50% wanted the money to be split half each between tax cuts and superannuation.
According to AWU National Secretary Paul Howes:
The poll shows voters are economically literate, and politically sophisticated enough to understand that in the fight against inflation and rising interest rates the option of increased superannuation rather than tax dollars in the pocket is smart stuff.
But should workers really be so keen on establishing the idea that budgetary policy should be used to combat inflation? As RBA Governor Glenn Stevens pointed out in a recent speech:
I would hazard a guess, though, that a good many people who are today paying higher interest rates would instead pay higher taxes in a world where fiscal policy was used more actively to manage the business cycle.
Our guesses don’t need to be too hazardous. The 2006 General Social Survey showed than in the top two quintiles, the people who pay most of the net tax in Australia, nearly half have mortgages, and around a quarter owe $150,000 or more.
At the moment, we are in the unusual budgetary position of having large surpluses. A more usual situation would be that a tightening of fiscal policy would mean an increase in taxes rather than a rejection, redirection, or postponement of tax cuts. So a more active use of fiscal policy would mean that many of the same people would be hit by both levers of anti-inflation policy (disclosure: I am one of them).
And while the RBA will cut interest rates when they deem it prudent to do so, higher taxes won’t go away so quickly. Tax rates rarely change more than once a year, and once they have taken the political heat of imposing extra taxes governments will be reluctant to give up the revenue.
It may well be prudent for Australian workers to put more money into their superannuation accounts. But creating an eco-political orthodoxy that taxes should play a regular and significant role in controlling inflation is something many of them might end up regretting.