Cost of PM’s duplicity yet to be fully measured

There are rumblings within Labor about what this all means for the government’s reputation, having built its election win around restoring integrity in politics.

Treasurer Jim Chalmers. Picture: NCA NewsWire / Martin Ollman

The consequences of Labor’s decision to break a core election pledge continue to play out, just over one week since the backflip was formally announced.

The PM and Treasurer hope that a mixture of self-interest amongst those who win out from the changes to the stage three tax cuts coupled with short memories and broader distrust of the political class push their deceit into the background by the time of the next election. Central to this strategy is the notion that all politicians break promises, so don’t judge those doing the damage now too harshly.

This tasks us with contextualising this broken election promise alongside others in modern politics, to determine just how egregious what Anthony Albanese and Jim Chalmers are doing now ­really is.

There are four precedents worthy of comparison over the past few decades, two on each side of the partisan divide: Tony Abbott’s “no cuts” to government spending on the eve of the 2013 election; Julia Gillard’s “no carbon tax” pledge prior to the 2010 election; John Howard’s “never ever” commitment to not introduce a GST ahead of the 1996 election; and Paul Keating’s L-A-W law reminder on income tax cuts ahead of the 1993 election.

All were labelled broken promises by political opponents, but none was as flagrant as what Albanese and Chalmers are doing now.

Abbott’s “no cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS” was him all but ruling out governing if he won, given the need for fiscal tightening. The promise was made on the final night of the 2013 election campaign on SBS television, hardly a ratings juggernaut. It had no material impact on the results, which saw Labor lose in a landslide. All of which is in sharp contrast to the broken stage three promise: made repeatedly and meaningfully ahead of an election Labor won with a single-seat majority. That said, Abbott learned a valuable lesson: overpromising only to backtrack without giving voters a chance to assess the shift can have profound consequences. He was removed as leader and the large majority was wiped out in the Coalition’s narrow 2016 victory.

Gillard’s “no carbon tax under a government I lead” pledge has all the appearances of being as flagrant a violation of trust as the stage three backflip but isn’t. Labor in 2010 was forced into minority government, and the Greens insisted on pricing carbon as part of a coalition.

Besides, a carbon tax is different to an ETS, which is what Gillard legislated, even if she made the mistake of conceding they were one and the same. The similarity is that before an ETS price floats it is fixed, similar to a carbon tax. Gillard soon lost the leadership and Labor lost the next election.

On his return to the Liberal leadership in 1995 Howard pledged to “never ever” introduce a GST. He was seeking to distance himself from a policy he’d championed at the 1993 election under John Hewson’s leadership. Howard ended up campaigning for the introduction of a GST alongside wider tax reform at the 1998 election, after winning the 1996 election after the “never ever” pledge. Howard’s supporters say he absolved himself of the pledge by seeking a mandate, despite the definitive terminology he’d used. At the time Labor disagreed. By giving voters a chance to judge him in advance of making the change, Howard went on to serve three more terms as PM, becoming our second longest.

Keating’s L-A-W law reminder in 1992 that income tax cuts had been delivered, before repealing them after his 1993 win, is probably the closest violation of trust to today’s example. But it still wasn’t as bad because the quantum of the cuts repealed was matched by superannuation increases Keating legislated to replace them. Also, Keating had presided over a decade’s worth of nation-shaping economic reforms before the backflip. Albanese and Chalmers have no such claims to fame. Nonetheless, Keating didn’t win another election, and he’s now a staunch advocate for lowering the top income tax threshold in recognition of the benefits that flow from doing so.

Fast forward to the here and now and there are rumblings internally within Labor about what impact its broken promise might have on the government’s reputation: an election campaign theme built around restoring integrity in politics after the Morrison years doesn’t exactly sit well with breaking a commitment made both explicitly and repeatedly across a 2½-year time frame.

Attempts to characterise the change as necessary because of changing circumstances is just another untruth. Inflation, supply ­issues courtesy of the war in Ukraine, high interest rates and cost-of-living challenges were all well known before the last election, and during the past 18 months as Albanese and Chalmers repeatedly ruled out changing stage three. Yet here we are, as they refuse to take the shift to an election, implementing it without a mandate, despite assurances not to.

As an aside I don’t know why more isn’t being made of the fact Chalmers started arguing internally for the need to backflip the moment the election was won. Albanese claims he only decided to do so over Christmas, but that’s certainly not true of his Treasurer.

While the caucus and the cabinet are publicly behind the deceit, that’s just for the cameras. Some worry about the economic failures attached to worsening the impact of bracket creep, the hit to aspiration, the risk of lost productivity and the brain drain embedding higher marginal tax rates has.

Others are focused on the political risk of blatantly breaking a commitment, worried about the contagion effect in doing so. Now anything Labor promises to do or not do simply can’t be trusted. Everything can be easily dismissed and questioned. Distrust abounds, and rightly so. Where that leaves the government remains to be seen. When it makes promises ahead of the next election how can it expect to be believed?

There have been other consequences too this past week. Business, already burnt by hostile industrial relations laws introduced despite the collegial nature of the jobs summit, is now more weary of this government than ever. Recognition of the need for wider (more difficult and complex) tax reform grows because of the focus this broken promise has generated. Given Albanese and Chalmers have little interest in such hard going, they may have pulled the curtain away on an underprepared next act.

And then there are the Greens to think about. Labor may need their numbers to pull off its backflip. Adam Bandt has been emboldened by the debate, calling for more money to go into low income handouts, for example. Albanese always prided himself on not falling into the trap of becoming beholden to the Greens, not wanting to give the Coalition ammunition to attack Labor for pandering to its left flank. Will that have to change? If not then the Greens might use the wedge to attack Labor from the left, doing to it what teals did to the Liberals at the last election.

Whichever way the debate goes from here, and however Albanese and Chalmers come out the other side of it, one thing is irrefutably now true: they can no longer be trusted.

Peter van Onselen is a professor of politics and public policy at the University of Western Australia and Griffith University.