Well that was quick. A chorus of voices arose to suggest, demand, plead that the Morrison government’s stage three tax cuts be put on hold or cancelled by the Albanese government in commitment to its progressive roots.
Then Anthony Albanese said no, it won’t be doing that. And really, that was that. There’ll be a bit more nibbling at it, but it’s over. The rather odd sally in favour by veteran Liberal MP Russell Broadbent to cancel the cuts he’d voted for was the kiss of the whip for this issue.
Labor would be committing political self-harm of the first order by cancelling or even modifying the stage three cuts. It waved them through when they were brought to Parliament in 2019 (something your correspondent argued in favour of) in order to not get snarled on the issue.
Politically, in pursuit of a Labor majority, it was absolutely right to do so. Had it not done so, its opposition to the cuts may well have been the means by which it was held below a full majority. Having lost in 2019 partly due to the franking credits stuff up, it was leaving nothing to chance. The decision, and its ramifications, indicates where we are all at, what Labor is now, and what’s possible. Spoiler alert: not much.
Yep, the stage three cuts are a boondoggle, no doubt about it. Creating one huge tax bracket from $45k to $200k, and lowering base rate from 32.5% to 30%, is an absurdly inelastic manoeuvre — a first instalment on flat taxation. But its purpose, when first proposed, was political rather than economic.
The giveaway to the higher third of that bracket above $150,000 is galling, to say the least. But the bracket shift at the lower end responded to a form of “bracket creep”, occurring because working-class and middle-class jobs — construction, electrical, nursing, teaching — were starting to earn some big bucks, a result of strong unions and the creation of professional strata within the occupations. If some nurses and teachers are earning $120k, and construction and other trades are heading to $150k, the existing brackets were becoming punitive to working-class prosperity.
There hasn’t been much acknowledgment of this in progressive discourse. Instead there has been an implicit and explicit call to focus tax policy around collective commitment and the common good, even if that meant self-sacrifice from wage earners who might otherwise benefit directly from the cuts. But that is a typically progressivist stance, validated as moral action and reaffirming progressivism as an identity. The business of the working-class movement was never charity; it was the advancement of humanity through the advancement of the class. The lower- and mid-range of the stage three tax cuts do that: return money to people in occupations that did not expect to enjoy such income levels.
To simply dismiss that as “selfishness”, as some progressives do, is a blinkered approach to what these new wage levels have meant, individually and socially. They may well apply to a minority within such occupations, but they offer the opportunity, pretty much ruled out till recently, that a two-income working-class or working-middle-class couple could be making some serious money simply by staying in the occupation they have — rather than having to transfer into management, to which there is a substantial, and policed, class barrier. That not only offers a new present prosperity, but also a greater opportunity for intergenerational wealth transfer within these occupations. There hasn’t exactly been an outcry against the tax cuts from this sector of society.
The refusal to see this aspect of the tax cuts is a double nostalgia. First, for a time when the working class was a more unified thing, but unified by modest wages and ceilings on their rise. The division now runs through the working class, since the interests of asset-holding, high-wage people are contrary to the low-waged and benefits recipients. Second, it’s a nostalgia for the Whitlamite era, when we were on the road, or trying to be, to a social democracy — in which individual and family good were bound up with common good, universal provision, and an enabling and guaranteeing state.
But that possibility is gone now, and it’s been gone for some time. It only really existed for a few decades after World War II, and it was decisively killed by a series of Hawke-Keating initiatives. The triple whammy of extension to negative gearing, the privatisations of public service utilities in the early 1990s, and the focusing of life-course management on superannuation made us (back) into a country focused on individual family welfare management. The steady undermining of Medicare and the extension of private school subsidies from Howard onwards have only served to emphasise and increase that.
The roots of such social familialism are deep in our history, running down to the Harvester judgment of 1907, and there was only one brief chance, post World War II, to convert to a more European social democracy, and we didn’t make it. Now most Australians look out over a social landscape in which the long journey of self and family life must be managed as an individual.
That is a tough terrain on which to try the “taxes buy civilisation” argument, especially when people can see corporations paying no taxes at all. It’s to the difficult task of taxing corporations better that progressives should look. That’s not going to break Labor’s promise of “no new taxes” — call ’em levies — and corporations have no friends. The task of clawing back money from corporations as they siphon it out of everyday life will be the major challenge of the near future.
Let’s face it — Labor would be politically mad to go back on the cuts. It would get the Coalition back into the game in an instant. At the moment, it can languish indefinitely. Labor has its eyes on the prize now: a decade in power, with the foundations laid in the first 18 months of this government. Steady, unhurried, thoughtful, modest policymaking and implementation, aimed squarely at the asset-owning working and middle classes, and resisting calls to extend much more than basic consideration to welfare recipients, refugees, First Nations peoples, or special cultural/identity groups.
It will aim to show capital that it can integrate the competing sectors, together with labour and environmental demands, to create a smooth and dependable framework for accumulation. It will show the labour movement it can deliver steady improvements, without for a moment offering to change the system that locks workers and unions out of actual self-representation. It is essentially turning itself into a conservative government.
The “Menzies spirit” that the freak show on the right goes on about, waving the “forgotten people” speech like some tract? That will be with Labor, and personified by Albanese. Albo waving from the balcony at a Gang of Youths concert is like Our Sir Robert waving his sun hat for the cameras from the members stand during the Fourth Test. It shows a man at home in his own skin among his own people in his own time. The right will respond by trying to get Peta Credlin elected.
But this political-cultural centrality was only won by breaking decisively with cultural progressivism. The long Labor-progressive alliance? That’s gone now, done. Labor will land squarely where the general public is, and that’s sometimes basically, and in a very limited way, progressive — the Voice, same-sex marriage — and sometimes not.
Those who want to get a progressive agenda up, or merely visible, have relatively few options capable of breaking through. Join the Greens, or a party further left, start a minimal program populist party — the Low Income People’s Party, or the Party of the Poor — and try to draw in a wider movement. Or join Labor and begin the long insurgency to reset its policies. You first.
People will need to kick the sort of illusions that have propelled this somewhat plaintive go on the stage three tax cuts. Some believe the government is using the pressure build-up to look as if its hand is forced before cancelling the cuts. I will be truly astounded if that happens and will admit my error. Still, I think Labor’s honeymoon is not over (desperate hope of the press gallery), but progressives’ is. Time to brush off the confetti and commit to the long disappointment. From now on, the only banging on offer will be the freezing of the pipes in winter.
Albo should bring in a deficit levy on higher incomes. $9K reduction on $200K and $1400 on $100K is unconscionable. Also wind back negative gearing and capital gains discount.
My hope is that Albo lets the pressure build up, then reneges on the cuts, claiming the public clearly have spoken, and the economic times have changed since the original decision was made.
If that doesn’t happen, then some sort of work-around claw back to ameliorate them could be good.
If they just go through as promised, with no claw back, that’ll be one significant brick knocked out of the wall of political goodwill that Albo and the ALP have started off with.
If enough bricks get knocked away, then I reckon the next election will be a battle for either major party to stay relevant.
I feel the voters want action, and have run out of patience with both parties being captured by big business and oligarchs. They have given the alternative major party a chance to show they can be the ones to make this paradigm shift, but it may well be a last chance…and it they flub it… then the voters will just vote in more Greens and Teals.
I hope the same. And I note that Albanese did not take the opportunity to definitely rule out abolishing the cuts at the Press Club.
And I disagree with Guy Rundle that it would be political suicide. It’s been said that Albo’s high popularity rating is consistent with an electorate that is relieved that the Coalition nightmare is over. The stage 3 cuts were are part of that nightmare, and I suspect to undo them would be a political plus. I hope we get to find out.
It would give Dutton a huge and simple campaign vehicle tho wouldnt it? He could ride ‘libs are party of tax cuts, labor are liars’ to the election
And ever so predictable. And the response is also very predictable. I’d be interested in seeing which way the teals jump. So far the member for Kooyong is supporting cancelling the tax cut.
Definitely predictable – all the ppl on $120k in line for $139 billion worth of cuts would cry “poor”
(Can guarantee they’d baulk at the thought of living on an actual low wage of $46k, or worse)
That’s exactly what Dutton is hoping for. There are, luckily, more than one way to skin a cat. Levies for specific purposes are under used.
With Albanese riding a glorious wave of ‘popularity’, (how good is Shaq!…) why the ridiculous fear of a now utterly demoralised Dutton/LNP? Does the ALP not possess the marketing tools to counter that?
Because Labor wants a decade in power. It will err on the side of not giving the coalition a single point to rally on, so theyre a shambles in 25. Its accumulating political capital, not spending it.
I’m sure Labor does want a decade in power. But does not the pursuit of that goal – to not give the coalition ‘a single point to rally on’, inevitably result in yet more damage to the people they purport to represent? What sort of twisted politics is that?
The same sort of twisted politics we’ve endured for the past decade or so, Anodyne- power for power’s sake. Accolades from the business sector. Labor finally make it as responsible financial managers. And the asset owning class – all those home owners – will applaud them, too, and they’re 2/3’s of the population. There’s no risk to the strategy until 2/3’s of the population don’t own houses and climate change or proxy war will finish us off before then.
What “Labor wants” is irrelevant but you probably meant ‘needs‘.
Certainly not what it deserves, which is oblivion.
Still, I’d like to know what happened with the meeting with Lachlan – what political capital was involved there and was it in ‘our’ interest?
And the Australian economy? What of that, Guy? Will it survive?
Easily if everyone becomes a diversity outreach counsellor, gender consultant and soy faux latter barista with a sideline in taking in each others laundry.
Crikey has clearly demonstrated that ScoMo (and his minions) is our prince of liars, not to be eclipsed for many a turn. We even have Macron backing up Crikey.
The public needs to be reminded that the last lot could NOT be trusted in anything.
Dutton hasn’t a chance: his attempts to soften his image are like Herman Munster standing in the corner with a lampshade on his head. Nobody’s fooled.
Scuttle The Nuclear Subs deal would give plenty of loose change and let’s have another honest chat with Macron.
Agree. Albanese’s apparent popularity is just relief – plus, of course, total contempt for Dutton.
But where do the Green and indie votes go? Back to Labor, with maybe 2-3 new green or teal seats on Labor holds? This isnt the US or UK. People can’t stay home
Either way (with or w/o stage 3 tax cuts) the ALP are marked as the party of inequality and sell-out. If they drop the tax cuts the Greens et al will claim credit for that. The only thing that could cause people to desert the Greens at this point. is the Greens themselves.
Absolutely on that. Labor’s choice was to let the Greens swarm the left flank. They have no excuse if they cant build from it….
Can Labor engage the Greens rather than fighting them? They could be very valuable if managed well
Perhaps a more realitistic view is whether the Greens will allow the rump Labor to join them?
The time for a working coalition of Labor with Greens was killed, cremated & buried by PM Gillard’s last ALP Conference screechwhen she invoked “people who set the alarm clock to go to work”.
That proved she’d lost it following the dumping of the parent allowance when the youngest child reached school age – unless it was a ‘cunning plan’ to increase the birth rate…?
Sustainable Australia Party.
It is dishonest (not even disingenuous) to make that tired old claim that minor party ‘votes go back to Labor’.
It was immoral whiteanting when the majors dominated but the Greens have outpolled the Nats for the last half dozen elections and the Lib/Lab lapdogs are down to their last 20% of rusted- ons.
The future, if any, is eurostyle coalitions made up of often conflicting parties which nonetheless co-operate and negotiate for the common weal, rather than the old Masters.
Bring. It. ON!
We can but hope that next time even more indies and Greens get up. Labor are just the O.L.P. – the Other LIberal party.
Glen, and I will be one of them.
He should. But as GR explained, he won’t.
They’re all unlikely for the same reason: tranches of prosperous voters in marginal seats who are now high paid enough to be affected by such moves. Maybe cap gains reform later
And when the supply chain, energy crunch, climate disruption wipes out those “tranches of prosperous voters in marginal seats” (code for tradies & semi-skilled currently riding high?) – will they still thinki of themselves as millionaires-in-waiting?
There is a lot Labor can do to make the welfare system lass unfair without costing bucks, such as adjusting teh truly appalling taper rates for those on a mixture of benefits and work. especially for the over 60’s. The unnecessary cruelty in the system is dreadful.
Yes indeed, however GR & BR think that breaking a ‘promise’ will see political doom and a one term Govt!
There is plenty of time to shape numerous arguments about amending the tax cuts- I for one will wait and see. If the ALP does nothing at all it will be to there eternal shame and their primary vote will slip under 30%!
It does all seem a bit defeatist from GR. I have no great hope in electoral politics achieving much in the way of equality in this nation or elsewhere, but the dismissiveness here of issues like a call for poverty level social security, First Nations peoples’ rights, Refugees etc. as second order from the main game is surprising. I never realised what a hard-head Guy is. He could’ve been advising Beazley during the Tampa crisis.
Spot on.
Mass immigration.
Kid gloves with the fossil fuel industry.
Stage 3 tax cuts locked in.
Oh and a meeting with Murdoch junior-at his digs no less.
Neoliberalism to its core made to look good by the hard right freak show in opposition.
ALP. LNP Lite.
Alternative Liberal Party or Another Liberal Party.
This sounds like a ‘Labor had to win, that’s why they did this demonstrably lousy thing, and were right to’.
I’ve had several high skilled jobs over the past 15 years, and for most of them I felt well paid, almost overpaid. But now that I am lecturing at TAFE in a high demand skills field (applied engineering) I’ve never felt like I work so hard for my skilled pound of flesh. And yet I’m earning the same as what I earned 15 years ago. My income is so far from the high earner’s tax bracket it does seem a bit galling.
Would you ever vote Liberal tho? Could you ever imagine voting Liberal? If you vote Green, wld you ever pref Liberal? And thus the lid closes….
Yet the Teals blossomed? I think the female vote is underrated and changing.
I am waiting to see whether misogyny led abortion debate in the US may ultimately disrupt the ability of the GOP to sustain relevance.
this is the same thinking that gives us every insipid centrist posing as left-wing like Barack and Hilary, do nothing much actually progressive apart from throw some cultural meat to their base, but otherwise govern for the neo-capitalist class (see the response to the 2011 financial crisis where Obama bailed out the investment banks and let the home owners go to the wall to pay for it all).
the argument is appealing, because the neos own the media and actively oppose anything progressive, but by vacating the field they allow the debate – or the Overton Window – to slide constantly right.
so far it seems to give us more and more right-wing success, even as their leadership is less and less capable or clueful. It looks very much like a short term strategy for the left, without a catharsis to jolt us out of it. The only people agitating for the revolution these days are Trump supporters…
Yes, and exactly when do these left-wing posers (including Albanese from the public-housing single-Mum background) start winding back the neoliberal Frankenstein when they have done all in their power historically to feed it in the name of gaining and retaining power? It’s a constant ratchet to the right, as you say, until someone has the guts to say ‘enough!’.
Is there a Hansard nerd who could compile a list of every piece of tory legislation that ‘Labor’ has either voted for or waved through after performative breast beating?
Totally guessing but $10 sez it would be in the high range, 80%+.
The ratchet, yes. Labor always bank the “savings” made with LNP policy and never repeal the most appalling stuff.
Voters voted for a new Government with a mandate to fix the many things left in states of disrepair by the previous Government. It costs money to repair hospitals, schools, the NDIS, Medicare, apprenticeships and we want them fixed, not just a bigger deficit.
In opposition they voted for tax cuts to help the low paid but were forced to pass the rest of the package. They should never have promised to retain the stage 3 tax cuts during the election and they should bite the bullet now and dump it. We voted for a new Government, not a scared Government.
Economic circumstances change – we don’t have to be in thrall to history. Howard, quite happily, brought in the GST and ScoMo quite happily through away billions of dollars when he reneged on the Sub deal with France.
In summary, I heartily agree with your point.
It would be far more equitable to return to progressive taxation and increase the number of bracket thresholds, beyond 50%+ for the obscenely rich would be favourite – cue the Beatles “Taxman“.
That will never happen so start small – abolish negative gearing with a very short grandfather clause, no more than 10 years.
I recommend the USA of Muhammad Ali’s time, when his marginal tax rate was 90% – the great Ali wasn’t complaining, just stating how loyal he was to the nation that was disowning him.
Until the mid70s and Fraser the Razor with his grotty little Treasurer (wotever happened to that little vermin…?) in this country, income tax was less than 25% of federal revenue, company tax was 60% and the remainder was import excise – used for funding industry protection and paying bounties on certain exports.
Now the ratio has completely reversed with individuals accounting for 70% of revenue, company tax (being optional & entirely voluntary for megacorps & multinationals eg a certain media mogul who’s idiot son is currently in the news).
Excise on imports (hi there Kodak, car industry, TCF etc) is virtually non existent and bounties a thing of the past.