Terry McCrann: Albanese’s bipartisan approach to tax cuts is a sham

Labor leader Anthony Albanese has failed his first big test of leadership and is now holding 25 million Australians hostage to his politics, writes Terry McCrann.

New Labor leader Anthony Albanese has made an immediate mockery of his promise to work for bipartisanship in the national interest and has failed right upfront his first big and important test of leadership.

Worse, much worse, he has failed all 25 million Australians by holding them hostage to Labor’s cynical political game-playing.

Let it be absolutely crystal clear, this is not just a political arm-wrestle over tax cuts, and so only of direct relevance to those who would get them — now or in the future.

This is fundamentally about urgent policy action to prevent the Australian economy sliding over a cliff — an outcome that would directly hurt every Australian.

And I do mean every Australian, including both the very youngest and the very oldest.

There’s a critically related point which gets more complicated: We need tax cuts now instead of the Reserve Bank slashing, feeling it has to slash, its official interest rate to near zero. And taking all saving rates down with it, but not lending rates, whether to homebuyers or business.

RBA governor Philip Lowe has made two things absolutely crystal clear, and done so both repeatedly and with increasing urgency and emphasis.

RBA governor Philip Lowe wants fiscal stimulus from the government. Picture: AAP

First, it was now urgent for the federal government to deliver fiscal stimulus: The quickest and most effective is the upfront July tax cuts, the first of the government’s proposed three tranches of cuts.

Lowe also wants more money spent on infrastructure, but the states are already doing that — and in any event, that’s long-term. The economy needs upfront stimulus, especially for consumers, now.

Secondly, Lowe has made it clear that in the absence of action from Canberra, he would be obliged to keep cutting.

Yes, another rate cut is now “locked in”, but further cuts beyond that would have limited effect.

It becomes not just a zero-sum but a negative-sum game — the benefits to borrowers are exceeded by the losses to savers.

In sum and in short any responsible member of parliament is obliged to vote for the July tax cuts. They should be endorsed unanimously.

But it is beyond irresponsible for the only opposition party that can pretend to be a future government — Labor — to stop them being delivered.

Labor — shadow leader Albanese and his shadow treasurer Jim Chalmers — claim they are ready and willing to vote them through. They could be delivered this week.

The claim is a fraudulent sham.

Shadow treasurer Jim Chalmers and Opposition Leader Anthony Albanese. Picture: AAP

The latest “offer” from Labor is that they will vote for them — provided the second tranche of tax cuts is brought forward to the 2019-20 year and the third tranche, in the “out years” is excluded.

In the most specific way, Labor is demanding to be allowed to govern from the opposition benches.

They have a leader absolutely committed to bipartisanship — provided the government does what Labor wants.

Earth to Albo: Do you understand why you are not sleeping in The Lodge? Not that you ever would have been; if Labor had won, it would be Chloe Shorten’s husband doing so.

What you are now doing is announcing to 25 million Australians that you should never get to sleep in the Lodge.

How could we elect as PM someone who was prepared to deliberately hurt every one of his fellow citizens?

This said, what’s sauce for the goose — and boy, is Albo a juicy one — is also sauce for the gander.

In the absence of Labor being prepared to vote for the government’s entire tax package, as the government is perfectly entitled to demand — and the absence of the crossbench senators to step up to do their duty — the government must be prepared to separate out the first tranche for immediate approval.

Chloe and Bill Shorten failed to make it to the Lodge, too. Picture: AAP

Let me spell it out again, so there can be no mistake. The economy and 25 million Australians need those upfront tax cuts.

At best, they stand between all of us and poor policy — the RBA over-slashing rates. But much more likely is that they stand between us and a serious slump in the economy.

Indeed, there is no guarantee they alone could head off such a slump; but they would be the most effective pre-emptive action we could muster.

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‘AUTHORITY OF A FIELD MOUSE’

And if it turns out, in the passage of time, that they weren’t absolutely needed, no harm is done: They are fully and responsibly budgeted for.

Again, a very important reason why it is completely inappropriate for Labor to both deny the government its mandate and to try to run fiscal policy from opposition.

The second round is not budgeted for in this 2019-20 year.

We just had an election. The Coalition won.

The Coalition not Labor gets to run Budget policy. The alternative is political, policy and fiscal chaos.

JOBS AND GDP ARE SUPER-CRITICAL

The next jobs numbers in mid July — after the Reserve Bank’s next meeting — will tell us
what the RBA will do with rates.

But we will have to wait until early September for the next GDP growth figures to find out what it should be doing.

And indeed, even more fundamentally, what is really going on with the economy.

By then it will be too late, both to act and because “other events” will have swamped things.

Originally published as Terry McCrann: Albanese’s bipartisan approach to tax cuts is a sham