By Joe Montero
Anthony Albanese faced a great deal of opposition to his promise to keep Scott Morrison’s promise for big tax cuts for the very rich since the day of the election that made him Prime Minister. In fact, it threatened to Cause instability within the Labor Party. The angst was just contained in last year’s national party conference in Brisbane last year.
It was clear that this festering sore wasn’t going away and threatened t destabilise the government. Opposition wasn’t only internal to the party. Opposition has been high across much of the community.
The perception has been that a generous handout to those with an income of over $200,000 a year can’t be justified, especially at a time when the average punter is doing it hard under a rising cost of living.
If delivered, this tax cut could have contributed towards the fall of the Albanese government. Consequently, political expediency called for a modification of the promise. The result is a partial retreat. Aimed at taking off the heat. It goes to show what sufficient community pressure can achieve.
Photo by Martin Ollman/NCA NewsWire: The Stage Three tax cut was the brainchild of former Prime Minister Scott Morrison
True to their ambitions, the parliamentary opposition has hit back with accusations of betrayal. They themselves and those at the top end that they really represent, stand to lose out. Above all this though, is crass opportunism designed to lift their political fortunes. and this is being supported by a relentless campaign by the Murdoch media empire.
Past the political fog, the truth is that the very rich will get some reduction in the promised tax cut of around an average of $4,5OO a year on income over $200,000. They will still get around $4,500. Those in between 146,486 and 45,000 a year, the relatively well-off will get up to a maximum of $800 a year or $15 a week, which isn’t going to do much to counter the rising cost of living. Those on less than $45,000 will get about $12 a week on average.
The Albanese shift on the Stage Three tax cut is short in substance and big on public relations, designed to sell to the public that it is far more generous than it is., and to quiet the voices of dissent within the party.
Some important and relevant facts not being talked about are the momentum towards cutting government spending on important services, the continuing long run fall of the wages share of national income and rising poverty.
Tax cuts shouldn’t be the priority at this time. Far more important is to apply measures that will relieve the rising cost of living for most Australians. Reverse the rising trend in health costs. Reducing the cost to families of sending the kids to school, which has gone up substantially. A lot more can be done to make housing more affordable and to implement projects that will create new and permanent jobs. There is an urgent need to invest in a sustainable economy to counter the impact of climate change.
The loss of at least $250 billion in the original tax cut and not much less with what is being offered now, will have a significant impact on the capacity of government to deliver on these needs.
The Illusion that handouts to the wealthy will generate needed investment in the economy must be discarded by our politicians. They used to call this the trickledown effect and then neoliberalism. They don’t use the terms anymore because the application of this belief over more than 40 years has been an abject failure. Instead of generating more investment where it is needed, it has aided the withdrawal of and misallocation of investment.
Unfortunately, our political elite remains fixated on this ideology, and it’s harming our economy and society. As long as the bipartisanship on this continues, the political will to change will be absent. Only the will of the broad community can change this.