Anthony Albanese wins first round in tax battle but he may yet lose the war

Peter Dutton in question time on Tuesday. Picture: NCA NewsWire / Martin Ollman

Peter Dutton has avoided stumbling headfirst into Labor’s tax trap.

At the same time, he has opened up a new front in Labor’s class war over negative gearing.

The Liberal leader hasn’t over-thought it, has acted swiftly, and remained cool-headed while playing the best of all hands available to him. He has also carried his party­room with him, despite conflicting views.

The Coalition will wave Labor’s broken promise through the parliament while maintaining fidelity to the principle of the original reform model of stage three rather than committing to its ­delivery.

By giving only an open-ended commitment to the Coalition’s original legislated tax cuts, Dutton has given himself maximum flexibility over the next 12 months to frame the Liberal Party’s tax policy to take to an election.

Two principles were at stake. Dutton needed to reaffirm the ­Coalition’s commitment to an ­aspirational tax regime, keeping faith with the Liberal Party’s values. At the same time, he was forced to deal with the political ­reality he was confronted with.

To oppose the tax cuts would have been lethal. To accept them in addition to the existing legislated Coalition model would have been madness, both on the economics of it and the risk to the budget.

By refusing to take the bait, Dutton has denied Anthony Albanese and Labor any credible angle of attack other than to accuse him of implicitly accepting that Labor’s tax plan was better than theirs. If this is the dispute, then Dutton will need to sharpen his ­response.

Nevertheless, the general position Dutton has taken may not have been the outcome Albanese was expecting.

One senior Labor source suggested prior to Dutton’s decision, that it was banking on the ­Coalition keeping both stage three and accepting Labor’s changes, handing the government a scare campaign on Coalition cuts to services to pay for tax cuts for the wealthy.

Dutton, in accepting that the Liberal Party will never win a spending war with Labor, has taken the commonsense position while freeing the opposition up to develop its own pre-election plan unencumbered by the politics of the Morrison era.

Dutton will now seek to establish a pattern of deception from the Prime Minister over Labor’s future tax intentions on negative gearing and the family home.

Albanese and Jim Chalmers were well prepared in parliament for the Coalition’s tactics. They dominated the debate but ducked and dodged central questions.

While Albanese achieved support for his tax changes, Dutton achieved what he was after – eliciting a non-committal answer from Albanese on whether Labor would go after investment properties.

Beyond the theatrics of parliament, however, these will become legitimate and potent issues that Labor won’t able to continue to avoid.

Senior Coalition MPs are convinced that having now gone down the path of wealth distribution with its income tax changes, there will be no logical end to it and that this will become the new model for Labor – taxing people who don’t vote for them and giving to those they want to vote for them.