Morrison’s golden opportunity to wedge Labor on tax rises

Scott Morrison can now argue with a straight face that the Coalition in government will never increase taxes.

If the Treasurer was to restore any credibility to this claim, he needed to find a way out of last year’s decision to raise the Medicare by 0.5 per cent to pay for the NDIS. He has found the way out, thanks in large part to the end of the GFC tax write-offs by corporate Australia.

Suddenly companies are paying tax again, and Morrison’s budget is suddenly flush with cash. And with cash comes opportunity. There is now a very stark difference and uncluttered argument to be had over the competing agendas of the two major parties.

Morrison can truthfully argue that the Coalition is not raising taxes and will in fact bring them down. No more taking with one hand and giving with the other.

Labor Treasury spokesman Chris Bowen will have to argue as to why Labor is whacking them up across the board. How is he today going to justify keeping Labor’s plans for an increased Medicare levy? If there is no NDIS shortfall as Bill Shorten argues, then what is the levy for?

Shorten and Bowen would not have seen this coming and will be completely wedged.

The truth is, Morrison didn’t see it coming until a couple of weeks ago either.

Morrison is a true believer in the NDIS. His preference was to have Medicare levy legislation passed. In the last sitting week it became clear this was not going to happen. Labor decided to take a pew on the wrong side of the moral argument and oppose it.

As luck would have it, revenue parameters are significantly more favourable. This has allowed Morrison to enact Plan C — pay for the NDIS through a stronger bottom line. This not only provides the government with a strong budget narrative with which to expose Labor’s tax plans, it has rescued Morrison from a revenue item in the budget that hadn’t been legislated, a reverse situation of the zombie savings measures of last year.

The politics of it are critical for the Coalition. Not only does it wedge Shorten, it will appease the Liberal Party base that believes it has been abandoned by a government meant to represent their interests — think debt levy, superannuation tax, means-tested childcare and the now dead Medicare levy. There will be many Liberal MPs who will be happy with their Treasurer today.