Limited options for Liberals as Anthony Albanese comes out fighting on tax

Prime Minister Anthony Albanese was not taking any chances on going quietly into the new year, staving off a loss of support with massive effort and risk. Picture: Jake Nowakowski

The brutal reality is that the stage three tax cuts are dead, now and into the future. Equally brutal is the reality that long-term reform, requiring more than one election cycle, is on ­tenuous life support to say the least.

Anthony Albanese has also emerged from his broken tax promise with a political offensive appealing to Middle Australia, particularly women and younger people, and deriding Coalition MPs as wanting “in their hearts” to deny tax cuts to people who ­endured the pandemic.

The Prime Minister is also ­extending his political attack on Peter Dutton’s “negativity” and unsuitability as an alternative leader, and who must either ­oppose the rewritten tax cuts favouring those on lower incomes or accept them and in so doing ­accept the great “lie”.

For his part, the Opposition Leader has no option but to make only token resistance on principle to the retention of the bracket creep-inducing tax thresholds, ­accept the new version and prepare a whole new tax policy for the next election.

In the meantime, Dutton will continue to prosecute Albanese’s broken promise as a “lie” and build a year-long campaign not just on tax but on spending and savings to offer a better budget bottom line than a high-spending Labor government.

This outlook is based on the evidence of two immutable political rules made obvious by the Newspoll survey of voters’ reaction to Albanese’s broken promise and recasting of the legislated tax cuts to redistribute wealth and halve the cut for higher income earners.

The first is that Australia is a truly egalitarian society in which people will accept a greater financial burden if they believe it will help those in greater need on lower incomes. Newspoll showed 62 per cent of people supported the tax changes, although only 38 per cent thought they would be better off.

Zoe Daniel, the teal independent MP for Goldstein, claimed that in her wealthy electorate 75 per cent of people surveyed supported the tax changes, though “many Goldstein residents who stand to gain from the original position understand they’re not the ones who are struggling to put food on the table”.

The second immutable rule, sadly, is that real reforms requiring long-term implementation, as the phased tax changes introduced in 2018 were, will be subject to opportunistic and populist short-term changes, as the Prime Minister has done with the ­political buffer that the last stage of the tax cuts were directed ­towards those on the highest ­incomes.

Again, for Dutton, there is little choice but to concede there is no going back to the Scott Morrison tax cuts and to plan a new tax policy for the next election, which is more than just about tax cuts but includes a combination of spending, savings and tax.

Of course, the politics will ­involve burning in the image of Albanese as a liar and running scare campaigns on not trusting Labor denials on changes to negative gearing, capital gains tax and the family home.