Good policy is good politics, right? We’re about to find out. And we’ll hear about it all the way to the next election.
Moving the substance of the stage three tax cuts around so that less goes to top-end earners and more to middle-income earners is fairer. It will reduce the regressivity of the tax system that would have been in place on July 1. It’s good policy, albeit probably slightly more inflationary than the original package given high-income earners are more likely to save extra income than middle- and lower-income earners.
Yes it’s good policy. But it’s bad politics. Truly spectacularly bad politics. Opposition Leader Peter Dutton must be unable to believe his luck.
The core of Anthony Albanese’s approach to government is to offer competent, reliable, no-surprises management. His is a government that keeps its promises so that people learn to once again view governments with trust. Keeping the stage three tax cuts as they are, a promise Albanese made before the last election, was part and parcel of that approach.
Now that promise has been broken. No ifs, no buts, no John Howard-style casuistry about what was said and when. Defenders might say that the tax cuts will be delivered in full, just with a shift in their targeting. Well, try telling that to Paul Keating, who got crucified for altering his L-A-W tax cuts by putting half into super and bringing forward the other half. Albanese and Labor will insist that most workers will get more money than under the original package. The only “victims” are people earning over $150,000. Whether the government can actually sell that remains to be seen. Ross Gittins wrote this morning that if Albanese can’t sell such a revision, he should get out of politics.
Dutton will be only too happy to help with that.
Dutton’s central charge (other than yelling “broken promise” over and over) and primary response to the “most workers are better off” line will be why Albanese didn’t make the case for his planned changes before the last election. If this is such a good idea, so much fairer, so much better policy, why didn’t Albanese tell voters during the 2022 election campaign that he was going to rejig the tax cuts? Australians could have voted for the merits of the two plans. Instead, Dutton will argue, and he’ll have a good point, Albanese told voters one thing before the 2022 election and did another thing after.
So was the prime minister lying before the election when he said he’d deliver the tax cuts? Or did he intend to deliver them, only to decide that changing circumstances warranted a change in policy? If so, what’s changed? Inflation has surged since then, but is now subsiding, and more quickly than the RBA expected — partly thanks to specific inflation-targeting measures by the government that have worked to make life easier for households without risking further inflation.
Keating couldn’t sell his revised L-A-W tax package. It was one of the reasons for the 1996 Howard landslide. No-one in the government or in public life is a patch on Keating when it comes to selling policy, but the Albanese government has given itself a similar task.
If Scott Morrison as prime minister had similarly broken an election commitment of such magnitude, he’d have been savaged. Doubtless progressives, Greens (who’ll claim credit for any change) and Labor partisans will claim this is different. But in effect they’re saying it’s okay when their side breaks election promises. And yet they wonder why voters are so jaded and alienated from politics.
For Dutton and the opposition, the path to the next election is now clearly signposted. Labor has handed them a prize gift and they’ll keep using it until polling day. The only worry for Dutton is whether his Treasury spokesman, Angus “The Invisible Man” Taylor, will be able to prosecute the case well enough against Labor’s best performer, Jim Chalmers. But Dutton will take the lead, Abbott-style, in hounding Labor.
If Labor can succeed, it’ll have done so where Keating failed, where Julia Gillard failed on her carbon pricing scheme labelled a tax by Tony Abbott, where Abbott failed with his 2014 budget. Only John Howard, breaking his “never-ever” promise on the GST managed to avoid the same fate — and he did it by the narrowest of margins, as Kim Beazley nearly snatched victory in 1998. And ever afterward, Howard could say that he took his broken promise to an election and asked voters’ permission — something Albanese can now never say.
Has Anthony Albanese done the right thing? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
I find the insistence amongst journalists that changes to Stage 3 tax cuts are terrible politics that will be hugely damaging to the government to be both irritating and questionable. Firstly, they assume that the “broken promise” narrative is the only one that will stick and secondly, they completely ignore their own central, crucial role in creating and maintaining that narrative.
I don’t actually believe that people who are struggling with the cost of living or a myriad of other concerns will spend much time outraged that the goverment “broke a promise” to deliver tax cuts overwhelmingly to the rich. The people who WILL care and who WILL spend countless hours and acres of newsprint casting judgement are political journalists and Coalition politicians.
“But you’re missing the point”, says the political journalist wisely “it’s not about the reality or merits of the actual policy, it’s the impression of a promise-breaking government that persists.”
This may be so but the fact that it’s the journalists themselves who actively create that impression is completely ignored.
the media often have a bizarre, dissociative role in politics, that drives me nuts.
They comment quite openly on the meta-narrative, the strategic reasons why such-and-such are doing something, and why it’s “clever politics”…but then go ahead and make the very things they are acknowledging, happen, by playing their roles in the game… like they have no choice!
it’s like dispassionately analysing how a scammer is trying to to rip you off, get your account details, date of birth etc, and commenting on all the various tricks they are using…while blithely going ahead with the scam and giving them all the info at the same time.
And then applauding the scammer on how clever they were!
We need more journalism that calls out the scam, resists it, and stays on that message – so that becomes the story – rather than just going along with it.
Fiona, I hope you really are Fiona Katauskas & not an internet name, ‘cos that’s an absolutely top post.
No offence intended.
Hhaah yes I am Fiona Katauskas
Fiona, your comment-section rants are even better than your cartoons ?
Agreed. This is a terrible article that does nothing but contribute to the hot air.
BK has been obsessed about this ‘broken promise’ mantra since Labor was elected. He just can’t get over it! The real politics is to come, and it will be led by J Chalmers, rather than Albo arguing the case and reminding the electorate of the stark choice in 2025!
Its a good move – finally, although I was hoping that the Tax Free threshold would be raised to $20,000, as it has not been altered since 2012.
Maybe BK is on >$200k… 🙂
My son is on $200k+ and he says there’s no way he should get tax cuts!
Well said!!!
Spot on Fiona. You couldn’t have drawn it better.
Don Maclean
I agree, News Corp and others will go nuts about the broken promise that fixed the flawed Stage 3 that gave to the rich but not the poor. But Albo and Chalmers will remind most voters all the way to the 2023 polls they will get their tax cuts snatched back if they vote for Dutton’s mob now that Sussan Ley has said the Coalition will unpick any changes. If Dutton backs down from this threat he would be admitting he is wrong and unfit to govern.
So, Sussan Ley thinks it’s a politically astute move to increase taxes on poor workers, and handing the extra income to the rich.
I say “go ahead with this strategy. It’s a winner!”
I agree. It was a piece premised on a false simplistic narrative. I think Bernard’s comparison with Kearings LAW flip is a long bow. Keating was on the nose. Albo has slipped but its nowhere near the status of Paul in 1996
Your point is gold Fiona. May I just point out that politics isn’t the only area the media is culpable of this abuse of position. This happens all the time when it comes to First Nation and Torres Strait Islanders. So often the media take the police statements as gospel, while refusing to even do a basic investigation to ensure its accurate.
They’re also complicit in driving the narrative of fear. Just take a look at Cairns and the issues there. They allow these abuses to happen, continue to support the government in their “law and order” drive, that literally just means locking up anyone that looks Indigenous for any reason possible. Why is a section of the community that is only 3% of the entire population of this country over represented in our prisons? I’m not talking numbers like 5% either, I’m talking 70 -80% of Indigenous people are locked up in prison.
Then there’s the way the multitude of wrongs against Aboriginal and Torres Straight Islanders are completely ignored, or buried and forgotten as fast as possible…
</rant>
For over a year the “left”-leaning media has been screaming that Labor must repeal or drastically reform the Stage 3 tax cuts. Now they’ve actually done it, what’s the response? You’ve broken your promise, how dare you!! Unbelievable.
Brilliant comment, Fiona. Keane’s piece is hopelessly rubbish, shallow so-called analysis. It’s a shame Maeve left. There’s nothing much worth reading here now.
It’s not even a “broken promise”. Albanese kept the tax cut package; he just tweaked some details – to make it more equitable. But no, now he’s dishonest and a liar. Really, journalistic standards have gone the way of the Fairfax press – down the drain.
Bernard. Seriously. I couldn’t give a rats arse how Dutton is feeling. This is 100% the right thing to do and worth fighting an incompetent and hostile press till election day. If Morrison or Abbott had done it then they wouldn’t have been “savaged” (can’t believe you think that”. There would be headlines of praise for a full week including the ABC
Exactly. I’d have thought that by now, Bernard would have noticed that the LibNats don’t get savaged by the media, particularly the American one recently taken over by the dimmer of its godfather’s sons.
yep, my reaction too. the mainstream media would’ve given the Libs all the space they needed to plead the reasonableness of whatever they did, whereas, for the ALP…the same journos are sharpening their knives and salivating at the chance to pound home the “broken promise” message forever and a day.
Brings to mind the reverse angle footage shown on 4 Corners of the press pack during the last election, like a gang of hoods mercilessly slashing at Albanese. It looked more like the prelude to a gang rape than any attempt to illuminate the election issues. You get the feeling that the press would still pursue the “brokenn promise” line if we had been invaded my martians in the interim.
A TV station that barracked for the other team without fear of imminent financial destruction would indeed be filming the pack.
‘Or did he intend to deliver them, only to decide that changing circumstances warranted a change in policy? If so, what’s changed? ‘
For a start, almost two years down the track, the rental market has surged significantly along with property values. A basic requirement for humans is shelter, a priority for all Australians. Ditto food prices which have escalated disproportionately. Those earning under $50K per annum are drowning. Albanese should keep the explanation simple ie: ‘My government thought it fairer to help those struggling with life’s basics on low incomes – or living in poverty – than to give more to those on incomes above $150K’.
And please, please, stop parroting ‘doing it tough’, the expression has been thrashed to death & is near meaningless now.
Agree – not all Australians are “doing it tough”. Rod Laver Arena is packed every night with people willing to pay hundreds of dollars for a seat at one match.
If the plague of obese ‘utes’ clogging up every thoroughfare is any guide, there are plenty of people who know nothing about ‘doing it tough’.
I see them around in my town, Massive house, massive garages holding their bully trucks (SUVs) caravans and boats… Millions of dollars worth of planet destroying rubbish. A soulless bunch who believe their possessions bring them “freedom”.
We know who are the “elite” in our society and it ain’t the “academics”. It’s John Howard’s “tradies”.
This article makes depressing reading. If governments can’t make changes when circumstances change, when can they? Is it “leadership” to dance to the tune of whatever the rich corporate class plays? Of course the original sin was passing the tax cuts in the first place – Labor should never have done that. On top of that, the changes don’t go far enough; they should reverse the bracket flattening as well.
Broken promise or not, anyone of a progressive nature should wonder why Labor should ever be supported, if this minor amendment of unconscionable tax cuts is the best it can do.
Yes and the other part of Labor’s campaign was that nauseating,” No one held back, No one left behind” – also, wonks know stage 3 but besides the policy tragics, most will not even know what they mean. All they will hear is “broken promise.” I don’t know if long term Labor would be able to explain why they stood by and made the tax system more regressive because they decided to implement the Coalition’s agenda.
Very good point. And Keane’s equally good point is that Albanese and Chalmers have spent years saying that is exactly what they will not do — the fools. They’ve put all their credibility on the line by saying their policy, from the time they voted for it under Morrison, is fixed and irrevocable and nothing anybody says would change that; they consistently repelled all those that wanted better policy, in exchange (they hoped) for the gain of being able to boast that when they make a commitment they can be trusted, even when it is an unpopular commitment. Now they’ve thrown all that away. This is a much worse political mistake than Gillard’s carbon price policy (which was not a mistake or a broken promise, only a decision that could be misrepresented that way), and look what the opposition managed to do with that.
Spot on – the time to oppose these was from Opposition, not Government, Labor has spent the last two years plus saying they supported these tax cuts and now, suddenly, they don’t. You can’t have your cake and eat it.
Can we just get over the stupidity of the whole ‘broken promise’ schtick and recognise that politics and the media in Australia encourage mendacity from pretty much everyone in the universe ever because of the vile ‘gotcha’ crap being passed off as political analysis in this country.
Mr Keane should know better than to label changing a rotten policy to a slightly less rotten one as a broken promise and take a rather more sophisticated look at the issue. As for Dutton, Angus Taylor etc making hay out of this, it was their lousy policy in the first place and if the media, even Crikey, stopped playing winners and losers by approaching these issues with more intelligence, we would all benefit.
A pathetic piece of commentary.
The whole ‘broken promise’ thing is childish, and hardly relevant in the world of politics, or even the wider social world where promises, vows, oaths, agreements, contracts and so on are chewed up and spat out every day. In politics, anyway, surely the electorate is completely cynical by now of the pre-election ‘promise’. Notwithstanding the effect of the mass media which selects which party’s ‘promises’ are going to be subjected to piercing and unrelenting emphasis, surely what the electors care about, if or when a ‘promise’ is broken, is whether it was ever going to be good for them. Howard was allowed by the media to divide his promises into ‘core’ and ‘non-care’, no fuss at all. They’ll try to frame Labor’s tax cuts policy change as being totally ‘core’, of course, but which voters who earn below 150k are going to be bothered if it means their tax rate is going to be cut by more than they expected?
Is it a broken promise or just a promise of keeping stage 3 tax cuts recalculated after all everyone’s a winner except a few at the top end, and they really aren’t losers either.