By allowing states to increase income taxes, while at the same time flagging corporate tax cuts, Malcolm Turnbull risks undermining one of the Coalition's greatest campaign strengths: economic credibility. Peter Lewis writes.

The Turnbull Government's fast-moving economic agenda risks becoming a political liability rather than the asset it should be for conservative governments.

After floating then rejecting increases in the GST and reforms to negative gearing, the Government is now poised to hand over some of its revenue raising powers to the states, allowing them to levy their own income taxes.

This is an attempt to fix both an economic and a political problem for the Government - rebuilding sustainable income flows for health and education after they were destroyed in Tony Abbott's 2014 budget.

The Prime Minister will argue the measure is a sign of the Government's economic management credentials, allowing the Coalition to campaign on the ground where they are strongest.

But in allowing the states to raise income taxes, while putting forward policies that ease the tax burden on business via corporate tax cuts, the PM also risks unlocking one of the enduring rules of modern politics: the Fingerhut Effect.

I have written about this phenomenon in the past. Washington-based pollster Vic Fingerhut has worked in the US, Canada, UK, Western Europe and Australia since the 1960s, picking up what seems like a universal truth.

When you ask voters, "Which party is better at managing the economy", right-of-centre parties tend to enjoy a significant advantage. No matter how competent or hopeless the conservative party actually is, conservatives are seen as better economic managers.

The latest Essential poll backs this in - the Coalition enjoys a 13-point advantage over Labor on the question.

But when you bring people into the equation and ask, "Which party is better at managing the economy for ordinary people like you", the advantage slips away and the result sees an advantage to the party to the Left of centre.

This week's Essential Report shows how the numbers can shift when the emphasis of the question changes. Note that Labor has a four point lead on "which party do you think is best when it comes to handling the economy in a way that helps you and people like you the most?"

Q. Which party - Labor or Liberal - do you think is best when it comes to:

Labor Liberal No Difference Don't Know Difference Liberal - Labor May 2014 difference Representing the interests of the large corporate and financial interests 13% 50% 23% 14% +37 +41 Handling the economy in a way that best helps small business 23% 36% 27% 15% +13 +5 Handling the economy overall 22% 35% 28% 14% +13 +14 Handling the economy in a way that best helps the middle class 28% 31% 28% 14% +3 -1 Handling the economy in a way that helps you and people like you the most. 32% 28% 26% 14% -4 -8 Representing the interests of you and people like you 33% 27% 26% 13% -6 -10 Standing up for the middle class in Australia 32% 25% 29% 13% -7 -14 Handling the economy in a way that tries to take the interests of working families into consideration as much as it takes the interests of the large corporate and financial groups 31% 24% 29% 16% -7 -10 Representing the interests of Australian working families 41% 20% 26% 13% -21 -27 Being more concerned about the interests of working families in Australia than the rich and large business and financial interests 41% 19% 26% 13% -22 -29

Under the Fingerhut theory, economic debates are not run on their merits, they are actually about framing issues according to the strengths and weaknesses of the respective party brands.

When the test on the economic question is about management capability like keeping interest rates or inflation down or managing government debt, conservatives should thrive.

But when the economic issue relates to whose interests are served - corporate interests or ordinary working people - the numbers shift significantly.

Similarly, when we look at the major party's brand attributes there are two clear outliers.

Liberal Labor Difference Too close to the big corporate and financial interests 62% 35% +27 Has a good team of leaders 41% 30% +11 Divided 61% 54% +7 Have a vision for the future 46% 40% +6 Out of touch with ordinary people 58% 53% +5 Clear about what they stand for 39% 35% +4 Will promise to do anything to win votes 63% 62% +1 Have good policies 39% 38% +1 Extreme 36% 35% +1 Moderate 47% 47% - Trustworthy 28% 29% -1 Keeps its promises 27% 28% -1 Understands the problems facing Australia 41% 43% -2 Looks after the interests of working people 31% 50% -19

On general management issues and values-free proposition the parties are either on par, or the Liberals have a slight advantage. It's when the question switches from "what" to "who" that there are clear advantages for Labor.

Which is why the double tax narrative of lower company taxes and higher income taxes is so dangerous for the PM.

On face value the public reject the idea of decreasing company tax.

Q. The Government has indicated that the next budget may include cuts to company tax. Do you think it is more important to provide tax cuts for companies or income tax cuts?

Total Vote Labor Vote Lib/Nat Vote Greens Vote other Company tax cuts more important 16% 17% 21% 12% 11% Income tax cuts more important 62% 67% 60% 69% 68% Don't know 21% 16% 19% 19% 21%

But when it is coupled with a new round of income tax increases, the Fingerhut Effect swings into action and the election becomes one of interests rather than competence.

If this occurs, Labor has the opportunity to construct a winning campaign around Turnbull's modern Prometheus, based on the simple questions: Whose side is he on? Who is he managing the economy for? Who do you trust to represent your interests?

And Turnbull is trapped in the Fingerhut Effect left defending a corporate tax cut and an income tax hike.

Peter Lewis is a director of Essential Media Communications (EMC), a public affairs and research company specialising in campaigning for progressive social and political organisations. He tweets at @PeterLewisEMC.