Labor must learn from its chaotic first week back in parliament

Still licking its wounds from the election loss, Labor mishandled its response to the tax cuts package so badly that voters have been left with the idea Labor supports higher taxes, writes Annika Smethurst.

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Depending who you talk to in Labor, returning to Canberra after its election loss was like attending your ex-girlfriend’s wedding, your own wake, or a degustation of shit sandwiches. Labor MPs admit they are all at different stages of grief.

So it was little wonder the Opposition was paralysed by indecision over the government’s tax policy.

Prime Minister Scott Morrison gives Treasurer Josh Frydenberg (left) and Finance Minister Mathias Cormann a pat on the back after the tax cuts package passes. Picture: Tracey Nearmy

Labor had been so certain it would win the election it never considered its position on the Coalition’s tax cuts.

In the campaign, Labor derided the $158 billion tax package as a gift for the top end of town. Australians rejected that line and Labor needed to learn from it.

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Battered by its election loss, Labor sought relevance and tried to pressure the government to split its Bill in ­exchange for support for tax cuts for lower- and middle-income Australians.

Labor argued it was only against the third stage of the package, which flattened the tax rate from 32.5 per cent to 30 per cent for people earning between $45,000 and $200,000 from mid-2024.

It was a confusing plan that still played into the narrative that Labor was anti-tax cuts.

Labor flirted with the idea of voting against the entire Bill, but rightly feared blocking the tax package would damage its brand in three years when the Coalition would spend big and remind Australians that Labor opposed measures that would allow workers to keep more of what they earnt.

The Coalition didn’t even need Labor to pass its Bill. Instead it chose to side with Jacqui Lambie and the two Centre Alliance senators to deliver tax relief.

So Labor could have stayed out of this.

Instead, it isolated its base — which still ­believes the party should engage in class warfare — while its final position — to pass tax cuts it will later tinker with — reinforced the idea Labor supports higher taxes.

Luckily for Labor, few things that happen in the first six months of this parliament will affect its chances at the next election.

But if it is to have any hope of winning in 2022, it must avoid the chaos of the past week.