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Simon Benson

Budget 2021: Wage rises are the only battle left for Anthony Albanese

Simon Benson

Labor’s budget counter-attack on wages is a concession that there is limited territory left on which to launch a full-scale ideological assault.

It also reveals that Anthony Albanese has not yet landed on a final position for Labor’s tax policy, which is unlikely to be any clearer after the opposition’s budget-in-reply tonight.

Irrespective of what course the pandemic takes over the next 12 months, this sets the scene for the next election to be fought on two fronts — virus economics and a more traditional battle framed around the class politics of income tax cuts.

The third and final stage of the government’s reforms are legislated to take effect in the middle of the next parliament, abolishing the 37 per cent tax rate. It is budgeted to cost $130bn from 2024-25 to 2029-30.

Albanese has not yet articulated a position on whether he would go to an election vowing to repeal them.

But Josh Frydenberg made it clear on Wednesday following his post-budget speech at the National Press Club that he expects this to become the pivotal point of difference between Labor and the Coalition. In anticipation, he has already shifted rhetorically by talking up the benefit they will deliver middle-income earners and in the process appearing to demonise higher salaried workers.

Once again, Frydenberg has tried to prove the point that John Howard made to him that there is no room for ideology in a crisis.

Yet there is. And it is on wages that Albanese believes the divergence is the greatest.

With much of Labor’s traditional policy dominance under threat in this budget — courtesy of the $30bn spending on aged care and essential services — Albanese needs to find another war.

The political risk for Albanese is that the argument becomes too esoteric for voters over whether wage rises should be driven by government intervention through productivity levers or left to labour market economics.

Nevertheless, wages, skills and infrastructure will likely be the focus of the response by the Opposition Leader, who will be hoping the budget fades quickly from the electoral radar.

Read related topics:Anthony AlbaneseFederal Budget

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Original URL: https://www.theaustralian.com.au/nation/politics/budget-2021-wage-rises-are-the-only-battle-left-for-anthony-albanese/news-story/d59ab27ca2627e6a2d9eca8298040af3