Politics Opinion

Repealing tax cuts: Albanese needs to forget Murdoch, act now and be bold

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PM Albanese should defy criticism from the Murdoch press and repeal tax cuts benefitting high-income earners, writes Paul Begley.

THE  COMBINATION of the Albanese Government assuming office on 22 May, combined with the teal Independents sweeping some of the most entitled and incompetent Tories from their long-held heartland seats, was a great relief to many Australian voters, myself included.

It compared favourably with the sense of relief felt at the defeat of the criminally inclined U.S. President in 2020 and the successful Liberal Party spill against the eccentric, if somewhat weird Prime Minister Tony Abbott in Australia in 2014.

In each case, a large part of the relief wasn’t so much the successes of Malcolm Turnbull, Joe Biden or Anthony Albanese as the jettisoning from power of Tony Abbott, Donald Trump and Scott Morrison. Each officeholder had displayed his gross unsuitability to exercise power on the grounds of incompetence, corruption and a lack of any real inclination to govern for other than base reasons connected to personal vanity and catering to sectional interests.

While they were a significant improvement on their discredited predecessors, Turnbull proved disappointing and Biden similarly, so much so that he might suffer significant losses in the 2022 mid-term U.S. elections.

Biden has not been able to live up to his promise to bring his long congressional experience to the critical business of getting his programs through the House and the Senate. Democrat mavericks in Joe Manchin and Krysten Sinema have plenty to answer for in that failing, but the buck stops with the leader — Biden.

Turnbull, for his part, came to office with an approval rating north of 60 per cent. A big part of that was because he was not Abbott and also that he signified the promise that he could do something useful about energy and climate policy.

But all he could do in plain sight was promote his enemies. He put Morrison into the Treasury and Opposition Leader Peter Dutton into an increasingly monstrous portfolio that combined some of the most politically invasive parts of Home Affairs, Immigration, border protection and Attorney General Departments, invasive in the sense that Dutton enjoyed ever-increasing powers to play Big Brother.

Albanese enjoys the substantial advantage of not being Scott Morrison, but he also engaged the voter during his short-lived campaign with the promise of being able and willing to do politics differently.

Voters of different persuasions would have interpreted that promise in ways that suited where they were coming from, but there was a strong consensus around the issues of gender equity, energy policy and climate change, transparency and integrity in government. There was also a response to the COVID pandemic that Morrison had sold to the voter as a rear-vision mirror issue, that has since found a new life in a more contagious and vaccine-resistant present with the BA-4 and BA-5 subvariants.

The issue connected with the new COVID wave caught the Albanese Government by surprise and left the new Health Minister, Mark Butler, trying to defend the indefensible by denying a $750 pandemic assistance package to a growing number of sick workers and citing budgetary concerns for doing so.

As Treasurer Jim Chalmers has confirmed, the budgetary concerns are real but they are not issues of the new Government’s making. The Morrison-Frydenberg Government allowed around $38 billion of pandemic labour subsidies to be gifted to companies that didn’t need it but made no attempt to recoup it, using the defence “I’m not into the politics of envy” to explain its “so what?” shrug and inaction.

In addition, despite a spiralling national debt created during its nine-year term, the Morrison-Frydenberg Budget included a third stage of tax cuts mostly benefiting wage earners in the $180k+ range that are due to cost $184 billion in total, with a $15.7 billion cost to government revenue in their first year.

As part of its small target election strategy, Labor didn’t oppose those tax cuts when the Morrison Government put them into legislation and Albanese promised not to reverse them.

The reality now is the Albanese Government knows the extent of the parlous budgetary situation it has inherited and it also has an inkling of the big spending that’s going to be necessary to deal with the continuing reality of the COVID pandemic and the costs of creating an energy policy framework that is focused on the transition from fossil fuels to sustainable renewals.

Albanese will be mindful that reversing the tax cuts by repealing the legislation would mean unleashing the Murdoch media with the cry “Labor’s broken election promise” and that will be true. Against that is the broken economy left by Morrison’s profligate borrowing and reckless spending, and the realisation that successive bad decisions will be necessary if the new Government does not have the money to pay for them. That dark shadow will hang over the Albanese Government each time it makes another bad decision.

Labor needs also to realise that whatever it does or doesn’t do, the Murdoch media will unleash the dogs onto it because that’s what Murdoch does to Labor governments. Mindful of that, Albanese must be bold enough to not only repeal the stage three tax cuts but also put on the table equitably taxing multinationals, resources super-profits and the churches.

If Labor is meek, Murdoch will crucify it for being meek; if Labor is bold, Murdoch will crucify it for being bold. Being bold should therefore be an easy choice, but the Cabinet will need to make the choice or it won’t happen.

Being bold will be harder the longer it’s put off because voters will place a time limit on how long the Albanese Government can blame its predecessor for bad decisions made because of the budgetary nightmare created by that predecessor.

Paul Begley has worked for many years in public affairs roles, until recently as General Manager of Government and Media Relations with the Australian HR Institute. You can follow Paul on Twitter @yelgeb.

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