Grattan on Friday: Labor missteps in attack on Malcolm Turnbull's investments

Labor’s assault on Prime Minister Malcolm Turnbull’s financial affairs is a risky tactic, not least because it badly jars with the positive vibe infusing federal politics since the change of prime minister.

The opposition attack centres on Turnbull having invested in managed funds that are registered in the Cayman Islands, a tax haven.

Turnbull says in reply that when he became communications minister he put the money offshore to avoid a conflict of interest; all the income is taxed in Australia; he pays his taxes fully.

The Prime Minister told parliament that if an Australian investor invested in a managed fund located in the United States, there would be a 15% US withholding tax. But his way, “more tax is paid in Australia than otherwise. The same amount of tax is paid, but more of it is paid in Australia. … There is no tax avoided in Australia.”

Turnbull also emphasised that Australian superannuation funds invested in funds registered in the Cayman Islands.

The opposition admits that Turnbull’s investments are legal, and all are fully disclosed on the parliamentary register.

Labor’s primary aim is to try to define Turnbull to voters in a certain way, rather than establish any actual wrongdoing, of which it has no evidence. It believes its attack will resonate over time and especially in the context of the coming tax debate - that ordinary people will see it in terms of two sets of rules, one for them and one for people like Turnbull.

It is seeking to morph questions about Turnbull into people’s wider discontents.

Bill Shorten told reporters: “There is a sense of frustration in Australia - and it’s not about Mr Turnbull in particular - it’s a sense of frustration that some people, because of their financial wealth, are able to extract all of the concessions going in our system but the rest of the people, they just pay their tax, it gets taken out of their pay every week”.

But hunting Turnbull in this way this week looked somewhat desperate, out of sync with the public’s relief at the prospect in the post-Abbott era of more emphasis on policy and less personal nastiness.

The opposition might be trying to send the Scott Fitzgerald message that the very rich “are different from you and me”, and Turnbull is therefore out of touch with the lives of ordinary families, but people are aware, and have been for a long time, that Turnbull has made a pile, and his popularity in the polls indicates it is not seen as a problem.

As Turnbull told questioner Tony Burke, manager of opposition business: “If the honourable member wants to go around wearing a sandwich board saying, ‘Malcolm Turnbull’s got a lot of money,’ feel free. I think people know that.”

Labor itself recently had, in Kevin Rudd, a rich leader, albeit not as rich as Turnbull. The Rudds' money came from the business of his wife Therese Rein who, incidentally, divested the Australian arm to avoid the family having any conflict of interest.

To get beyond just the “Turnbull is rich” proposition, Labor would need to show some dodginess, and it hasn’t done that – not unless it is willing to cast its aspersions extremely widely. Apart from the super funds, Fairfax journalist Michael West writes that the Future Fund “in its disclosures last year, showed no less than 43 tax haven entities, 35 of which were domiciled in the Caymans.”

The opposition has opened itself to the allegation, made by Turnbull, that this “is just another wander down the avenue of the politics of envy; just another smear.” That general approach did not serve Labor well when run by Wayne Swan in government. These days in Australia, aspiration is likely to trump envy.

Perhaps the opposition thinks that it is throwing up some counter to the problems Bill Shorten has with what’s coming out about his union past. That was again the focus of some evidence to the royal commission on trade union corruption this week. Unfortunately for Shorten, there is no equivalence.

Turnbull managed the parliamentary questions deftly: he was frank about his affairs while using context skilfully. He wears his wealth without apology, but with an acknowledgement of both his good fortune and his obligations.

“Lucy and I have been very fortunate in our lives. We have more wealth than most Australians. … We have worked hard, we have paid our taxes, we have given back.” He accepted his wealth was not “entirely a function of hard work”, acknowledging that others worked harder but did not have as much money.

“This country is built upon hard work, people having a go and enterprise. Some of us will be more successful than others. Some of us are fortunate in the turn of business. Some of us are fortunate in the intellect we inherit from our parents. There is a lot of luck in life, and that is why all of us should say, when we see somebody less fortunate than ourselves, ‘there but the grace of God goes me’”, Turnbull said.

Labor is having trouble getting the measure of Malcolm and adjusting to a tougher target. Some opposition shots against the government this week hit their mark: new treasurer Scott Morrison had a few uncomfortable moments in parliament. But mostly, Labor just drew attention to itself, to its disadvantage.

Listen to our latest podcast with guest, Shadow Parliamentary Secretary for School Education and Youth Sam Dastyari, here.

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.