By Peter Hartcher and Damien Murphy
IF YOU think that Australia's shadow treasurer is Malcolm Turnbull, you are technically correct but functionally wrong, according to a political scientist.
"The real shadow treasurer is not Malcolm Turnbull but Craig Midgley," quips Macquarie University's Professor Murray Goot.
Craig who? Mr Midgley is a 39-year-old father of four and Woolworths shelf stacker from western Sydney. He and his wife, a teacher, have a combined income of $90,000 and a mortgage of $320,000.
The Treasurer, Wayne Swan, told the National Press Club on Wednesday that he had framed the national budget with Mr Midgley in mind.
"So, yeah, we are Wayne Swan's template for the working family," said Mr Midgley at his Cambridge Park home yesterday. And the Treasurer and the Prime Minister, Kevin Rudd, made sure they concentrated the benefits of the budget on exactly this political constituency.
"This budget does everything it possibly can to help the middle - that's the whole point - and I call Craig Midgley very much the middle," Mr Swan said yesterday.
As for Professor Goot's contention that Mr Midgley is the real shadow treasurer because he carries more influence than Malcolm Turnbull, Mr Swan agreed:
"He does. When I look at Craig Midgley, I see my brothers, I see the people I grew up with, I see the people I went to school with, I see the people in my electorate.
"When I called him on Saturday he was going out to his back shed to spend an hour or two."
Mr Rudd's so-called "working families" delivered him power at last November's election, and the budget was his way of repaying the favour.
And it's just the start. Mr Midgley is firmly cemented at the centre of the Rudd Government's political strategy. It turns out that the Prime Minister also phoned Mr Midgley, the day before the budget was delivered, to swap economic theories.
A senior Labor strategist said yesterday that it was this bloc of "working family" voters who carried John Howard to power in 1996, and that he lost power when they deserted him. Now that Mr Rudd has them, he intends to keep them.
Mr Midgley is illustrative. He grew up in a Labor family but voted for the Liberal Party's Jackie Kelly in 1996 because he rarely heard from the Labor incumbent, Ross Free.
"By the time I was ready to come back to Labor they had that wacker Mark Latham, so I voted independent. I thought John Howard was good for the economy, but he lost it on Work Choices. I voted for Rudd."
What exactly is a "working family"? In reality, it is nothing more than a euphemism for voters in marginal electorates. But in the definition that Mr Swan gave, working families have a primary earner on $50,000 to $60,000 and a spouse making another $20,000 to $30,000.
In analysing the beneficiaries of the budget's tax cuts, how much went to working families?
Chris Richardson of the consultancy Access Economics conducted this analysis:
"If you said working families were everyone between $26,000 and $80,000 on their individual incomes, then that is 6.4 million people, or 63 per cent of all taxpayers.
"Under the old tax scale, that group were paying 49 per cent
of all personal income tax. Under the new scales, that share falls to 47 per cent. Although that doesn't sound like much, it means that
of the total $8.1 billion of tax cuts in 2008-09, this group got 69 per cent."
Working families also benefited from an education tax refund worth $1.01 billion in the first year, a child-care tax rebate worth $340 million and the easing of the Medicare levy surcharge, which has no value in the first year but will benefit people, preponderantly in the "working family" category, by an estimated $300 million over four years.
If the budget was framed to appeal to Mr Midgley, it succeeded. He approved. But the Rudd-Swan strategy for holding this constituency is not so simple. Giving them money is a necessary but insufficient condition for keeping their votes.
Mr Midgley, again, illustrates the point. "I rang him on Saturday, during a break from putting the finishing touches on the budget papers, for a chat about the budget," the Treasurer told the National Press Club.
"I said that we'd be doing a lot for working families but we'd always like to do even more.
"I haven't stopped thinking about what he told me in response. He was grateful for what we were doing to make things a little easier for his family and millions like them. But he also said, 'Mate, I know you can't just keep chucking money around. Inflation will go to buggery.'
"This is the selfless suburban Australian, who understands we have an inflation problem in our economy."
It's more than that, as Professor Goot explains: "It's not necessarily selfless because he realises that if inflation goes to buggery, he's in trouble, too.
"I'm sure people are aware that it's not just about giving [them] money, because if they get a $5 tax cut and inflation pushes up their bills by $20, then what's the point?
"That's an acknowledgement of sociotropic voting," a voter's willingness to vote for the greater good of the country as a whole rather than for an individual's narrowly defined hip-pocket benefit.
"The literature shows that generally among voters, concerns about the good of the economic welfare of the country as a whole will trump measures about individual hip pockets."
So the Rudd Government's twin budget strategy of caring for "working families" but also avoiding an inflation blow-out is designed to appeal to voters like Mr Midgley.
And Mr Swan, in turn, used Mr Midgley's articulation of the idea to help sell his budget strategy.
Mr Swan said he wanted all Australians to prosper, not just "working families". He told the Herald : "I accept that someone living in Sydney with an income of $150,000 a year is not rich.
"We should deal with that through structural tax relief, not through government transfer payments." And the Government is working on that, too.
In the meantime, the touchstone for national budget strategy quite enjoys his new celebrity: "Now I'm famous. My mates are calling me the John Kenneth Galbraith of Cambridge Park."
