Treasury’s stage three tax cut shift worsens Anthony Albanese’s integrity problem

Its easy to dismiss questions about process but when they are testing the public record of what Anthony Albanese and Jim Chalmers are saying it is a far more serious political issue. Picture: NCA NewsWire / Martin Ollman

Treasury is shifting its ground on what the Albanese government knew of the plans to recast the stage three tax cuts from early December and the subtle movement is making Anthony Albanese look even more “shifty”.

The parliamentary passage of the recast stage three tax cuts redistributing the dividends of bracket creep from high-income earners to lower-income earners is a political victory for Anthony Albanese but it has trashed his credibility and destroyed his vow that “my word is my bond”.

While the Prime Minister seeks to diminish questions about the formulation of the new tax regime as merely the Opposition chasing “who knew what and when”, the issue of a broken promise and a leader’s integrity is likely to politically outlast short-term advantage of an average $15 a week tax cut.

Indeed, Albanese himself, now branded the “liar in the Lodge”, has sought all this week to question the integrity of Peter Dutton and the Coalition and intends to pursue the Opposition Leader’s character all the way through to the election due in May next year.

It’s easy to dismiss questions about process but when they are testing the public record of what Albanese and Chalmers are saying it is a far more serious political issue.

Treasury Secretary Steven Kennedy has now told the Senate the government was made aware of Treasury’s plans to redesign the stage three tax cuts before it provided its final advice on January 20, that there were ongoing discussion between Treasury and the Treasurer’s office between December 11 and January 20, that he’s be “very surprised” if Jim Chalmers wasn’t aware of those conversations and that after his conversation with the Treasurer on December 11 the Treasury’s work on the stage three changes “sharpened”.

On Friday Kennedy said he hadn’t been given an instruction from Chalmers but alluded to options and discussions on tax changes while not saying the stage three cuts were the only option and refusing to say whether those discussions include changes to the treatment of negative gearing on rental properties.

On Monday Treasury officials said the stage three tax cut changes were Treasury’s idea and in the following days in parliament Albanese and Chalmers repeatedly relied on that evidence to deflect questions of whether the government had asked for the changes before repeatedly saying their position “has not changed”.

The political ramifications also go to whether government denials on other changes such as negative gearing or capital gains tax can be accepted now as well as raising the issue of what further changes the May be in the budget.

Kennedy admitted Treasury was looking at all options but refused to say if the discussions with Chalmers involved negative gearing.

All week Chalmers and Albanese have danced around the issue of negative gearing, refusing to deny there could be changes while relying on Treasury’s Monday evidence that the current legislative changes were Treasury advice they just accepted.

Curiously, even as Kennedy was giving evidence to the Senate, former Labor leader and current cabinet minister, Bill Shorten, bluntly ruled out changes to negative gearing on national television declaring “we are not doing it”. Shorten lost the 2019 election in part because he proposed changes to negative gearing rules.

In parliament Albanese said changes to negative gearing where all in the Twilight Zone of the mind of the opposition but neither he nor Chalmers would rule out changes.

What’s more both attacked the incoherent, inconsistent and unintelligible position of the Coalition on the new tax cuts and accused them of lacking principles based on what had been said in the last two weeks.

At one stage Albanese was even using the words of an opposition frontbencher from 2016 to demonstrate an inconsistency in Coalition policy – Albanese hopes the tax cuts will swamp the negative image of him being a liar but he can’t say integrity, principles and your word don’t matter and use the same integrity argument against Dutton and the Coalition.