James Morrow: Tory-fighting Albo revives Australia’s tall poppy syndrome

The PM’s tax tinkering is rooted in petty class warfare, a rebirth of the old tall poppy syndrome that has in the past done so much to hold Australia back, writes James Morrow. Will it impact your vote? Take our poll.

Depending on who is doing the counting, Anthony Albanese promised somewhere between 25 and more than 100 times over the past year and a half to leave Stage 3 tax cuts alone.

But all of that was overridden by a statement he made a dozen years ago, back in February 2012, when he summed up his purpose in life: “I like fighting tories. That’s what I do.”

Putting aside the absurdity of “fighting tories” in Australia – are we really doing pommy style class warfare here? – at the time the statement revealed the massive chip on the future prime minister’s shoulder.

The moment quickly put to bed any thought that Albanese, were he to become prime minister, would ever lead in the style of Paul Keating or Bob Hawke, two Labor leaders who put aspiration, enterprise and prosperity at the centre of their governments.

And here we are.

Thus what is at play here is not just whether or not higher income earners get their share of tax cuts promised ages ago, but whether it is possible to undertake any meaningful reform of the Australian economy under Labor.

Taxing times.... Prime Minister Anthony Albanese faces a public backlash.

As these things go, Australia depends far too much on income tax rather than consumption and wealth taxes to keep the government moving.

The way we tax income is incredibly progressive – that is, it hits higher earners hard and fast as they move up the ladder – compared to other nations.

And as a result, a a time when inflation is high and labour markets are tight, workers are seeing their incomes carry them up through higher tax brackets even if they aren’t doing any more work or being any more productive.

“Bracket creep” saw tax revenue to the government surge by $30 billion in the second half of last year according to mid-year government fiscal papers.

When the figure was revealed, Treasurer Jim Chalmers said that “returning bracket creep is a worthwhile aspiration,” backing in the Stage 3 cuts.

Now, though, we know they are gone with the wind.

The 37 per cent tax bracket that captures upper middle income earners is sticking around.

The top tax bracket of 45 per cent will not be shifted out to start at $200,000 per year, despite the fact that its current threshold of $180,000 was set in 2007, when that sort of pay packet went a lot further than it did today.

Particularly in capital cities, where that sort of money may buy some breathing room but hardly lands you in a waterfront mansion.

Paul Keating and Bob Hawke were two Labor leaders who put aspiration, enterprise and prosperity at the centre of their governments.

The opposition has indicated it will oppose any changes to Stage 3, as well they should.

But for Peter Dutton and his shadow treasurer Angus Taylor, the politics of this are diabolical.

Much of the media already appears to be lining up to support the prime minister’s spin on this.

That circumstances have changed, that putting more money in higher earners pocket will be inflationary, that the whole thing is terriby unfair and biased towards “the wealthy.”

But at the heart of all these lines is a small and petty class warfare, a rebirth of the old tall poppy syndrome that has done so much to hold Australia back in the past.

There is broad agreement that Australia’s economy desperately needs reform and enhancements to productivity if we are not to keep going backwards (household incomes already are shrinking, and it is only an immgration Ponzi scheme keeping us out of recession).

The attitude now seems to be, well, the wrong people might benefit, so screw them, let’s all stay stuck in the past.