Whatever way it’s sliced, stage three tax cut changes are a breach of an election pledge

The decision Anthony Albanese takes to his caucus on Wednesday may define his leadership until the next election.

However he might like to slice it, any changes to the stage three tax cuts are a fundamental breach of an election pledge.

The Prime Minister will have broken faith with voters and succumbed to pressure from elements of his own caucus who have been craving a return to class war politics since being elected. It signals to Middle Australia that Labor is a party hostile to aspiration.

This is a cost-of-living crisis – as literally defined by Albanese during the last election campaign – that has been going on for more than a year.

The economics have changed to make the squeeze more profound. But for Albanese, suddenly the politics have also become more urgent.

This not only creates a greater anxiety in the community, but suggests a government that is hesitant and electorally rattled.

This adds to a decline in confidence that the government is decisive and purposeful and suggests it is addicted to political management above all else.

The risks for Albanese on making any changes to stage three tax cuts at all – taking from the top to return to the bottom – is profound.

Struggling families will have been planning their forward household budgets based on the legislated tax cuts that Albanese as opposition leader supported, albeit reluctantly, and promised not to touch in government.

Integrity in politics was a foundation of the mandate he was seeking before the May 2022 election. To alter the status quo, Albanese will be in danger of being depicted as a leader who can no longer be trusted on policy or promises, and a leader too weak to resist internal and external pressure from the left.

Both characterisations are equally corrosive for leadership.

The scale of electoral deceit will be assigned by the Coalition as a reminder of Julia Gillard’s carbon tax pledge and a return to wealth redistribution as a political model with echoes of 2019.

It would reveal to the electorate that class-based enmities are unchanged and remain at the core of modern Labor’s defining ethos.

Albanese’s political instincts as leader, as opposed to being
a member of the NSW Labor Left, will be telling him not to touch them.

But if Albanese makes the changes, and risks the heated parliamentary debate that follows, he will be persuaded by the argument that most people won’t care about the well-off.

But there is risk in starting a fresh argument about what level of income defines the wealthy.

Gillard discovered this in 2011 when shaping the compensation package for the carbon tax.

The cut-off was $150,000, setting up a class battle over whether this defined the line between the rich and not so rich.

The new goalposts have moved to $180,000 – a tax threshold that has remained unchanged since 2008.

Back then, there were only about 130,000 individuals on incomes above this.

Today that number has grown to almost 700,000.

By the end of the decade, it will be almost 15 per cent of the population.