Labor Bill Shorten national conference

“Fuck business.”

No, that wasn’t Bill Shorten yesterday, that was the Conservative UK Foreign Secretary, Boris Johnson, when asked recently about business worries about Brexit and the likely departure from the UK of large corporations like Airbus. “Fuck business.” From a Tory. Cue outrage in the UK.

Shorten may as well have said the same thing though, given the gasps of horror that greeted his confirmation that — as was previously reported weeks ago by Phillip Coorey — Labor would roll back company tax cuts for medium-sized firms, with turnovers between $10-$50 million. Small business will keep their tax cuts, but around 14,000 businesses (or around 1.5% of businesses) will face a tax rise if Labor is elected and is able to pass legislation to roll back the tax cut threshold to $10 million. Cue outrage.

From a policy perspective, it’s a no-brainer. Capping the cuts at $10 million will regain most of the cost of the current, legislated cuts, which is just under $30 billion over a decade. Are there better uses of, say, $20 billion than as a windfall for medium-sized businesses? True, small and medium-sized businesses have greater difficulty borrowing or raising capital, so they’re more likely to invest the after-tax windfall than large corporations — as we’ve seen from the US, and as we’re seeing in Australia, large corporations will simply hand the windfall to investors. And as Saul Eslake has shown, it’s medium-sized firms, not small business, that have performed best in job creation in recent years. But even if 49% of businesses between $10 million and $50 million invest the windfall, it’s a poor result compared to, say, the infrastructure investment that could be funded by the government with the foregone revenue, or the extra nurses and doctors hired.

Politically, it’s anything but a no-brainer. Shorten continues the crazy-brave act, daring the government and the press gallery to throw everything they can at him, despite the apparent liability of looming byelections. Some of us are old enough to remember when the central charge against Shorten was that he believed in nothing but his own ambition. Now, apparently, he believes too ardently in a left-wing agenda. Labor’s broader gamble is that the old wedge politics of the neoliberal era are done with, that voters believe the economy no longer works for them and that being bribed with $10 a week of their own money while wages decline and corporations and the very rich rake it in isn’t going to cut it.

But which corporations? Certainly big business — one of the most toxic brands in the polity — along with politicians themselves. But small and medium-sized businesses are different. Australians identify more with them. In this week’s CEDA survey, respondents equated small and medium businesses with blue collar workers, “people like you” and themselves personally — and in dire contrast to large corporations, which they viewed as the prime beneficiaries of economic reform (and rightly so).

Maybe that’s all about small business versus big business — the local shop versus the giant corporation that leaves you on hold for an hour — and people don’t have strong views, or even a strong definition, of “medium business”. But perhaps this is where Shorten’s crazy-brave act finally comes a cropper. Somewhere between “fuck business” (perhaps, just as only Nixon could go to China, only a Tory can say “fuck business”?) and “small and medium businesses are just like me” is a line that Shorten may have crossed. We’ll see.

You won’t hear it from the press gallery, but voter disenchantment with business-as-usual — with the emphasis on business — still runs very deep.