So there are three debates about the stage three tax cuts, or three tangled parts of one debate among the politically engaged, which is maybe 2% of the population.
First is about policy: are the tax cuts an effective use of the maybe $150-200 billion they will cost over a decade (not $240 billion)? The answer to that is likely no, except if you work at the Financial Review. The tax cuts are the product of the pre-pandemic era when the return to a balanced budget was on the cards. And almost certainly there are better uses of such a sum regardless. They will also deepen inequality.
On the other hand, we rely too much on personal income tax; beneficiaries of the tax cuts on incomes like $180,000 are doing well but are by no means “rich” if they’re living in a major city with a million-dollar mortgage.
Second is the debate about the politics: can the new government get away with breaking its promise to keep the tax cuts as legislated? Many, primarily on the left, insist it can, that the electorate will accept that times have changed and the tax cuts are no longer affordable; others say that Albanese and Chalmers should make a virtue of doing the right thing fiscally and economically, even if hurts politically — ultimately that will redound to their advantage.
Those primarily on the right and in the media mutter about Gillard’s carbon tax promise (which, actually, she didn’t break, but anyway), Keating’s L-A-W tax cuts, and Tony Abbott’s spending cuts in 2014. It will hand a huge weapon to the Coalition and undermine, perhaps fatally, perceptions of Anthony Albanese as trustworthy.
The third is the one that far fewer are happy to engage in: what does it mean for political integrity if the government breaks its promise? If Albanese and Chalmers, say in the May 2023 budget, dump stage three — or amend it significantly — it’s a major broken promise. Labor promised to honour the tax cuts, over and over, before the election, despite everyone knowing Labor didn’t like them. It would mean Labor misled voters.
Perhaps it would be a lie: Labor always planned to ditch the tax cuts, but decided simply to pretend ahead of the election to support them. Or perhaps it would be a falsehood — Labor at the time intended to retain the tax cuts, but had since decided to dump them.
But if it’s good enough to call out Scott Morrison for lies and falsehoods, which we did scores of times, it’s good enough to do the same to Albanese.
Labor supporters, opponents of the tax cuts and most on the left, including most people reading this, will object: but this is different. This is a promise that should be broken. Circumstances have changed. This is a good government governing in the public interest, not a rotten government like Morrison’s.
What that all boils down to is: my side shouldn’t be subjected to the same standard as the other side. We’re better. When we lie, or break a promise, it’s for a good reason.
Of course, that’s what your political or ideological opponents think, too. For them a broken promise or a falsehood is every bit as justified by the public interest, or by the need to keep those awful socialists out of power.
In my book Lies and Falsehoods I wrote about the phenomenon of “blue lies”, a US term for police lying in court to protect their colleagues, or to ensure that a criminal who otherwise might escape justice gets convicted.
Political debate is riddled with blue lies, and it’s becoming worse. Lies that people think are justified by the circumstances. Lies that lead to a good outcome. Lies that are needed. What the left, and opponents of the tax cuts, are engaging in is blue lying, same as the right did ad nauseam when Morrison was PM.
You either apply the same standards in public life to everyone, or you don’t. Few of those making excuses for the government — those who think ditching the tax cuts is justified — would have ever cut Morrison such slack. But Morrison was awful, they’ll reply. This is different. Maybe it’s different, but that doesn’t change the fact that ditching tax cuts would be a broken promise.
There are ways for the government to avoid breaking the promise. It can increase other taxes. It could introduce a high income earners’ deficit levy (including on large corporations). Maybe it could shave the tax cuts to cap the amount the very wealthiest receive from them — though that wouldn’t do much for the budget. A small amendment to the tax cuts wouldn’t be a broken promise, just a bit of casuistry. Not enough to make it onto a putative list of Albanese Lies and Falsehoods.
But ditching them is a broken promise. It’s a lie or a falsehood. Doubtless plenty of readers strongly disagree and will berate me in the comments. But either you’re consistent in the standards you apply to politicians, or you’re cheerleading. Take your pick.
Do you think the government should ditch the stage three tax cuts? Or would you consider it a broken promise worthy of Scott Morrison? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and
