Anthony Albanese’s character is now on trial over his stage three tax cut broken promise

Anthony Albanese has proceeded with changes to legislated stage three tax cuts.

Anthony Albanese has ensured the next election will be fought over tax and trust. This time, it will be his character on trial.

The Prime Minister has invited the electorate to judge his integrity. By abandoning a foundational election pledge on tax, he now presents as a prime minister to be taken at his word only when it suits him.

Having kept his pledge on the Indigenous referendum because of a promise, regardless of the social consequences of defeat and damage to his government, Albanese has now signalled that other promises are subject to political expediency.

To say this is a high-risk strategy is an understatement. The transactional cost of breaking an election promise is unquantifiable. Presumably it will take more than $20 a week.

But it shouldn’t be a surprise. Labor also promised not to make changes to superannuation.

The question must be asked: If Labor is prepared to ditch a promise of this magnitude, what does this mean for negative gearing and capital gains tax down the road?

The benefits of the adjustment to stage 3 tax cuts will be minimal for many households. And they don’t deal with the immediate cost-of-living pressures. Yet the political risks are tangible.

Labor MPs privately concede that the electoral betrayal is more significant than Julia Gillard’s broken carbon tax promise. This goes to the heart of the short-termism of this strategy.

Whether it amounts to an act of political suicide or political genius now rests in the hands of Peter Dutton.

The Dunkley by-election is now the focus, having become the most expensive by-election in the history of Federation.

There is no question Albanese’s remodelled tax cuts will benefit voters in Dunkley proportionally more than other seats. With 16 Labor seats on narrower margins than this outer suburban Melbourne seat, the PM can’t afford to falter at this contest.

How Dutton responds to this suddenly changed environment is critical to who wins the next election. He needs to respond quickly. The instinctive move so far has been to oppose Albanese’s changes but this may not be the smart play and risks burning the Liberal Party in Dunkley.

What Labor doesn’t see coming is the potential for Dutton to match Albanese’s changes while promising to keep faith to the full stage 3 cuts at the next election. This would out-manoeuvre Albanese, despite the risk that it could be portrayed as economically irresponsible.

By 2025, inflation is due to be back within the target range and it could be paid for by dumping Labor programs. The hip-pocket contest now comes down to which side is offering the better tax cuts. To take such a big risk suggests Albanese’s motivation is being driven largely by fear.

Before Christmas, polling showed Labor in real trouble on cost of living. Albanese’s personal numbers were also tanking.

There has to be an assumption that this tax decision is largely a message from Albanese to his own people.