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Albanese: Take a Stand on Tax for our Supporters’ Sake

A letter to Anthony Albanese:

Albo! Don’t pass phases 2 and 3 of the Tory Tax Plan

Abbott blocked good policy ; Now Labor has a right to block sweeping tax cuts that will indirectly hurt millions of its constituents. And many will be very disillusioned or angry if you let phases 2 and 3 pass.

The Government’s plans include the following for phases two and three (from Treasury):

“For 2022–23 and 2023–24, the top threshold of
the 19% tax bracket will increase from $37,000 to $41,000
the 32.5% bracket will increase from $90,000 to $120,000.

For 2024–25 income year onward, the top threshold of the 32.5% tax bracket will increase from $120,000 to $200,000.”

This represents an effective ‘flattening’ of the tax scales ; with higher income individuals on effectively lower rates of tax.

It will also cost the Budget $160 billion over 10 years. This when we’re likely heading for a recession. It will fuel austerity. Especially if the government prioritises the surplus even in time of economic downturn.

Finally: remember that the median wage in Australia is only approx $53,000/year. The Conservatives talk about people on $120,000/year as if they’re ‘battlers’. If we don’t stand up and fight only the Conservatives will eventually win with their long term agenda of a flat income tax.

They also want to legislate ahead for the next term of government which is totally unreasonable.

The Conservatives claim a mandate. Yet they won through a fear campaign based on lies ; Clive Palmer’s Money ; and preferences from Palmer and One Nation. And in Opposition under Abbott they never respected Labor’s mandate.

Labor needs to restructure income tax for fairness ; and index the lower brackets to avoid a vicious cycle of bracket creep and regressive tax cuts which flatten the scales. This must be a priority for Labor upon re-election.

We don’t need to capitulate on progressive policy. Labor needs a strategy to nullify the fear and disinformation campaigns. Capitulation is not a strategy.

Raise progressive taxes by somewhere in the vicinity of 1% to 1.5% of GDP upon retaking government. Exclude lower and middle income earners from higher taxes. Be thorough in this. Point out the moderate scale of the reform ; and explain where the money is going (eg: Aged Care Social Insurance, Medicare Dental). If Labor must tax a broader base then consider the Medicare Levy as well. It’s the closest thing in this country to “a popular tax” because of the clear connection with medical services, and the universal coverage most Australians value.

The Coalition is fond of arguing about “great big new  taxes” – even where there are no new taxes; Labor HAS to fight them on this.  Again: Insist on a figure in the vicinity of 1% to 1.5% of GDP in the first term of a new Labor Government. Point to our low tax rates in Australia compared with the OECD average (approx. 27% of GDP compared with approx. 34% of GDP). Australian tax overall is approximately seven percentage points lower in Australia compared with the OECD average. That’s a difference of approximately $119 billion Australian dollars a year.

If we give in we get an Americanisation of the discourse which gradually flattens tax scales, and makes meaningful social democratic reform on social wage, social insurance, public infrastructure and welfare impossible.

Take a stand, Albo. That’s what ordinary Labor members and voters want and expect from you.

Dr Tristan Ewins (Labor member of over 25 years)

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35 comments

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  1. Jack Cade

    I was afraid Albo would turn out like this. Labor will simply try and ape the coalition, content to be the least worst.

  2. Phil

    Albo is Shorten light. Another gut feeling now confirmed. Another experiment doomed to fail, It would appear our savior is not yet in the parliament.

  3. Keitha Granville

    yes, absolutely. He must not give in to the forces of the centre and the right. We voted for the left wing socialist policies, we need him to stick to them now. Otherwise he is totally deriding everything that Bill fought so hard for, and almost won.

    $120,000 battling ? Oh sure. That makes my kids poverty stricken then on minimum wage. How come that isn’t recognised ?

  4. ajogrady

    Labor needs to be LOUD AND PROUD. Labor has the resume and good track record that proves it is far better economic managers. Far better for the average person and our society.Far better for the environment. Labor has to talk up its credentials as it is as sure as hell that the lazy, corrupt L/NP stenographers masquerading as journalists in the Main Stream Media will never do their job of reporting the truth and abiding by their own code of ethics.
    The people of Australia do not need a snivelling cowardly opposition. STAND UP LABOR AND BE PROUD. If there ever was a time for a slogan that mimic’s Trump then Labor needs to MAKE AUSTRALIA GREAT AGAIN and lead from the front with daring and defiant.The people of Australia are tired of Labor being wimps. Australia is looking for real leadership.

  5. pierre wilkinson

    Labor must cry foul every time the COALition claims superior economic stewardship: the facts are there and they should loudly proclaim such, and point out the disparity between those who have and those who don’t.
    Too many people continue to believe that Labor are poor financial managers and it hurts them electorally all the time.
    Stand up and stand firm, Albo, or pass the baton on to someone who will.

  6. Stephengb

    “We don’t need to capitulate on progressive policy. Labor needs a strategy to nullify the fear and disinformation campaigns. Capitulation is not a strategy”.

    Spot on the money Tristan

  7. Wayne Turner

    Labor MUST block the welfare for the well off aka income tax cuts phase 2 and 3. If the COALition makes all the phases one policy,Labor MUST block it as a WHOLE,repeating “SPLIT THE BILLS! SPLIT THE BILLS” – If Labor buckles and then helps passes it ALL as one bill: Labor might as well disband,and let the Greens become the main opposition in federal politics.

  8. Henry Rodrigues

    To all the commentators above, I agree.

    Labor cannot just acquiece and roll over for the sake of looking cooperative and ‘responsible’. Did the coalition do that when they were in opposition ? Look where they are now. There must be differentiation from the ratbags. We’ve already lost another three years to the knuckle draggers and unless Labor wants to languish in opposition for many more years, Albo has to take the fight to them.

    Murdoch and the bastards and whores in the MSM will do what they want to do or are paid to do.

    And Labor is paid to fight them. Are you getting the message, Albo ??

  9. totaram

    I just laugh at all the people who said it was a “mistake” to let Shorten be the LOTO and Albanese should have been the allowed to be the leader. Then Labor would have won the election.
    With hindsight, I think that is pure bullshit. It is NOT “the leader” that determines everything. It is the party. And if the party has decided to capitulate and become “Liberal lite” then that is what is going to happen. However, on what basis they have decided this is a mystery. All logic would indicate that what some voters rejected were not the Labor polices, but rather the lies they were told about them. So why change? Counter the lies. You have three years in which to do it. But never mind.

  10. Wayne Turner

    Spot on totaram,on everything you just posted.I especially agree with this part:-

    “All logic would indicate that what some voters rejected were not the Labor polices, but rather the lies they were told about them. So why change? Counter the lies. You have three years in which to do it. But never mind.”

    My biggest fear,that Labor are so weak and/or lazy,that they would rather roll over policy wise,so the MSM and COALition are NOT so mean to them (The WRONG F’ING THING TO DO.).Rather than counter the LIES. They MUST PROVE ME WRONG.

  11. Christine Farmer

    There is no point in Labor attempting to modify its message to make it more acceptable to the conservative voter. Nothing will stop the MSM and LNP attacking and telling lies about anything Labor says or does. Instead simplify the message, and repeat endlessly. And rebut the lies, wherever possible.

  12. Wayne Turner

    That too Christine.

  13. wam

    I thought billy was a good man, a strong man, a beaconsfield concerned union man. He never showed that power in the 6 wasted years as opposition leader.
    When the pollies decided to reform the income tax not by raising the threshold which helped everyone,but only for people above $90k and give themselves the maximum benefit rather than the over half of the workers below $90k, they were pathetic.
    For labor to give themselves another crack at a tax cut under the guise of helping the workers they betrayed last time is %@&*@ AWFUL.
    But billy has wedged albo into agreeing.
    ps
    totaram regardless of the theory, in practice the leader makes and carries the decision. The fact that Billy and Tanya couldn’t ‘carry’ was clear when the loonies agreed with the rabbott in nov 2013 and they didn’t give the loonies a headache in the electorate to dump brandt..
    Will albo be better???

  14. corvus boreus

    I reckon that for Labor to have poured major resources into the division of Melbourne, where they had less than 30% primary vote, in an effort to unseat Brandt, a popular local member with a greater than 40% primary, would have been strategically imbecilic.
    Then again, I also believe that a party which wants to win government should probably preserve it’s powder for seats where there is an actual chance of winning, rather than formulating electoral strategies based on the repetitious, cacophonous and sub-coherent dribbling of some irrationally bigoted and patently demented anti-environmentalist troll.

  15. Dr Tristan Ewins

    WAM ; over half of all workers have incomes of $53,000/year or less! Which makes raising the 32.5% bracket to $120,000 problematic. Very few workers have incomes in the vicinity of $120,000. Raising that threshold’s maximum from $120,000/year to $200,000/year is just a gift to the wealthy. Everyone else pays.

  16. totaram

    Now the neoliberal Labor MPs are emerging and showing their true colours and you can see that the party is about to roll over. They will pass the whole lot, with the excuse that it is for the good of the less well-off – which it is not of course, because they are the ones who will suffer the most from the cuts to services. But that is all too hard for the “voters” to figure out, so we will go with the simpler explanation. Turkeys conned into voting for Christmas and Thanksgiving, all in one.

  17. Wayne Turner

    Labor MUST NOT support the bill if it is NOT split.They need to show GUTS,and rightfully put the blame on the COALition for NOT splitting the bill.They need to stick by this,no matter what the MSM,COALition,and gullible public say.Stand out for this belief.

    IF Labor passes the whole lot,then the Labor party can get f*cked,especially sell out Albo (He must refuse to,putting his leadership on the line if he must.),and should disband.The Greens then should become the major opposition,with no former Labor pollies allowed near the place.

  18. New England Cocky

    @ajogrady: ” Labor needs to be LOUD AND PROUD….. STAND UP LABOR AND BE PROUD….. The people of Australia are tired of Labor being wimps.”

    “Australia IS LOOKING FOR REAL LEADERSHIP (my emphasis).”

    Agreed wholeheartedly!! The Shorten small target strategy appeared to be working because there was no challenge to the group thinkers string the ALP agenda. Perhaps the ALP will now get ut on the front foot and talk to real Australian voters rather then the select few sycophants who attend focus groups.

  19. Wayne Turner

    I also agree Labor needs to STAND UP and TAKE IT TO THESE LYING EVIL BASTARDS aka the COALition,and their MSM.

    My biggest fear,is that Labor are already showing signs of taking the “wrong” message from the federal election result: Instead of calling out ALL the LIES of the COALition and their MSM all the time.Under Albo,Labor appears to be in a (possible) process of rolling over on their great policies,and (possibly) help pass policies they don’t/didn’t agree with.

    AKA Labor’s policies were and are NOT the problem – Selling of them,and combating ALL the LIES around them was and is the problem.If Labor go down this TOTALLY GUTLESS ROUTE,starting with passing the whole of the tax cuts,without splitting the bill,then it’s the END OF THE LABOR party.They will lose by more,and ALWAYS be in opposition.

    LABOR MUST FIGHT FIGHT FIGHT THE LIES AND STAND UP FOR THIER POLICIES!

  20. Harry

    Well I agree we need tax reform but not to ensure our national government can “fund” its spending. We don’t need to tax the well off for funding, we need to tax them to take way some of their spending power to make “space” for the national government to spend on needed programs without reaching resource constraints. That means taxes must be progressive but not confiscatory, except maybe those earning many millions.

    Our national government has unlimited spending power ( it creates money by marking up bank accounts) but it IS limited by what is for sale. It cannot spend what is not there otherwise it risks creating inflation.

    Anyone who argues otherwise will face the inevitable question: where will the money come from ? And unless a politician can answer that by speaking plainly of the money creating capability of the national government they will be on a hiding to nothing, a “gotcha,” that leaves them floundering.

  21. Stephengb

    Bill Shorten resigned, immediately the election was lost, I call this the esonse of an honourable man
    Bills response was understandable but In would have preferred him to just stay and get MONGREL!

    Labor has made a big mistake allowing him to resign and should have begged him to stay.
    That they didn’t has essentially destroyed anything Shorten says into the foreseeable future. They have sent a signal that Labor are defeated and beaten, Albo s probably a good man but he will be seen as the week kneed response of the Labor party to a sound thrashing.(even that is far from the truth).

    We can see from the remarks above that I am right and these are the comments of the Labor faithfull.

  22. wam

    Wow Dr evans I stand corrected
    I thought that a tax cut from 37% to 32.5% for 90K to $200k gives those under $90k nothing but increase the threshold from $18200 to 30k would give the poorest workers at $50k about $4k extra per year spending??? Still I was never more than an average arithmetician??

  23. Dr Tristan Ewins

    Increasing the tax free threshold would benefit a lot of people. But $50k is not ‘low income’ in the big picture. $53000k is LITERALLY ‘middle income’ ; ie: the median. But you have to consider the overall budgetary outcome. What you suggest may be possible ; but taxes would have to rise elsewhere. Tax credits, on the other hand, could benefit low and middle income earners – without flowing through to those on high incomes. The tax free threshold does at the very least need to be indexed.

    The government’s planned changes are explained here:

    https://www.ato.gov.au/general/new-legislation/in-detail/direct-taxes/income-tax-for-individuals/personal-income-tax-plan/

  24. wam

    Well said, crow.
    Are you ignorant of the strategies of the loonies standing candidates in every seat?
    Ever considered why?
    Like crows, they prefer to pick the eyes out of every carcass yet spend little or no party resources. Leaving the campaign expenses to the willing candidates but the party pockets the aec cash.
    Such ignorance of aec payments makes it difficult to follow the reasoning behind the tactic of bobby brown and narrow-nose’s boys re the timing of the adani trip

    Certainly it will not be easy but Brandt, like all extremists, is vulnerable to a concentrated effort?

  25. wam

    Thank you, Dr Tristan,
    Mea culpa,
    I am often too quick and miss the point.
    My calculations were based on the tax cuts for the $90k-$200k starting july 2019 I missed the 2024/5 start.

  26. helvityni

    Where would the Libs be without the Nationals…?

    So, why can’t Labor and the Greens do the same…and join the forces..

    I find this baffling.

  27. Harry

    Hi Dr Tristan,

    There will definitely be an adverse impact on the federal budget if the tax free threshold is raised to about $50K due to the sheer number of those who earn that amount and lower. So the tax take will be lower though low to middle income earners tend to spend all they earn and so a tax cut will be more stimulatory than the Coalition’s proposals.

    The impact on the budget is more of an issue for State governments who are more limited in their capacity to spend than national governments who literally create the money they need by the simple act of marking up bank accounts by the act of spending and can buy whatever unused resources are available to buy in our economy. (Labour, materials, etc). Resource constraints, rather than money, is the REAL constraint. We are a long way from running into general resource constraints as there is ample evidence of slack in the economy, ie a substantial gap between capacity and current conditions.

    This conception, which challenges the dominant paradigm is of course, MMT. Leading exponents in this country include Professor Bill Mitchell and Dr Steven Hail. I find it more compelling explanation than the mainstream narrative.

  28. Dr Tristan Ewins

    raising the tax free threshold massively would give a lot of money to low and middle income earners ; but that neglects the role of collective consumption ; for instance through Medicare and the Pharmaceutical Benefits Scheme. When you collectively consume through tax you can end up better off at the end of the day ; if if with less disposable income. On the other hand AFTER ESSENTIALS paid for through collective consumption – you can end up with MORE disposable income.

    But WHO is talking about raising the tax free threshold to $50,000?

  29. wam

    Dr Tristan,
    I thought $30k would give everyone a nice bonus?
    Another idiot troll-like idea was to make the medicare levy on gross income with no deductions..
    Then there would be no medicare problems everybody who declares an income would pay and the pm would be coughing up $10k with gina, twiggy and the fat cat’s paying heaps. Health would be first priority and fully funded.

    Helvityni,
    A look at the behaviour of the nationals in a coalition and then look at the diludbransimkims? QED?

  30. Harry

    The Real Democracy Party is and it makes sense to me providing you are prepared to accept the neoliberal framework is flawed and damaging to our collective well being.

    https://realdemocracyparty.net.au/Policy/Tax/

  31. corvus boreus

    Senile bigot,
    Yes, I am aware of the fact that both the Greens and ALP (and many others) field candidates in electorates where there is no plausible likelihood of them winning, partially to maintain brand profile, and partially to milk electoral funding.
    This does not alter the fact that your obsessively repeated demand that the ALP should squander significant resources into trying to unseat Adam Bandt is myopic stupidity based upon irrational hatred.
    Goodbye wankstain.

  32. Zathras

    I think Albanese is getting himself wedged.

    If he stops or delays the future tax cuts they will be used against him if the economy continues to decline.

    If he passes all the tax cuts, chances are he may find himself in a position having to rescind them at the next election if the economy goes bad and they become unaffordable.

    The best he can hope for is to pass them and let the Morrison government be in a position to reconsider them later on, but that’s unlikely because it would affect the Liberal power base. Morrison may yet need to make further cuts to services or increase the GST to compensate.

    It’s an unenviable position but at least it’s at the beginning of this term and there will invariably be other problems in the next few years.

  33. Dr Tristan Ewins

    If the last two phases won’t be passed until next term, what effect can the Liberals argue that has on the economy for this term?

    I don’t think that argument stacks up.

  34. Paul Davis

    Albanese (known to his colleagues as “Fumbles”) leader of the neoliberal-lite Centre Right Party, has so far shown himself to be an ineffectual indecisive bumbler unable to unite and rally his discontented opposition as the Shorten cohesion melts away. His misguided adventure into the Setka diversion shows how easily he can be gulled and wedged. Setka has always been a thuggish anachronism whose ilk should have been rubbed out a long time ago. A real leader would have done the spade work quietly within the party and factions leading to the elimination of the standover men and the civilising of the union. Now the grubment will go in hard applauded by the public and Fumbles will look like a dill.

    The CRP will almost certainly roll over on the tax bill in its entirety in the house as several CRP rentseekers threaten to cross the floor, and it will pass in the senate without too much drama given the spineless but selfish ‘swill’ looking for deals. It is unfortunate for those party faithful amongst the oppressed proletariat that the only strong performers in the CRP are senators, Wong and Keneally, who by themselves will not be able to galvanize the opposition. In three years both senators will retire, disgusted and exhausted from fighting for a lost cause. The younger CRP power hungry eager beavers are as vile troughsnouters as their LNP counterparts, eg Patterson, unelectable crap. LNP should have at least two more terms. Maybe in nine years Straya might grow a genuine euro style gruen democratic party….

    We, the collective electorate, really shouldn’t complain because, under our current preferential voting system,  we got what we voted for. HolyMo told us either directly or by inference that if reelected his government of corrupt corporate-coddling criminals and cronies would carry on as previously with business as usual. It matters little what theft and corruption are uncovered, eg Taylor and a host of others, the media will close their eyes. No serious investigations, no consequences. Like the now forgotten ‘royal’ commissions, no bankers go to jail no victims of the holy paedos get adequate compo and the aged care industry will survive and thrive after the current lawyers banquet is finished. We voted for a police state, to strip red and green tape, to slaughter the fauna, to allow the rich to pollute and ravage for profit, to bully and impoverish the disadvantaged and vunerable. Dog bless Straya, the internationally recognised undisputed champion land of shitfuckery.

  35. Dr Tristan Ewins

    posted this off to ‘The Age’ this morning:

    A new letter to ‘The Age’ ; which today seems to be making a case in favour of the Coalition’s regressive income tax cuts.

    “The Age (22/6) argues that middle and high income earners will pay some of the highest income taxes in the world without the Conservatives’ $160 billion tax cut plan. But ‘The Age’ has been unclear what it means by ‘middle income’ in the past. In fact the Median (ie: middle) income is approximately $53,000/year. $120,000/year is actually a very high income compared with most. Also the gap between Australian and OECD average tax rates is almost 7 percentage points. (or approaching $119 billion/year) The Coalition’s tax cuts would mean massive austerity (worse in a recession) ; and maybe some of the gap would be made up by raising the GST (as in many European countries with their VATs) and a negative distributive outcome for genuine low and middle income earners. Raising the top threshold of the 32.5% tax bracket from $120,000 to $200,000 would very significantly ‘flatten’ the overall system. Some other countries may also have inheritance taxes, wealth taxes, strong land taxes ; but Australia has always depended highly on income tax. The trend is towards less equality. But we don’t HAVE to follow the trend. And there was a time I expected better from ‘The Age’.”

    https://www.news.com.au/finance/work/how-much-do-you-need-to-earn-to-be-rich-in-australia/news-story/cd7e6647199773c56ad5a9270c7aab87?fbclid=IwAR0PdJydLNCE2-ltF_xHhybr8HGQASEPH4OPQLaG_OkyVMTzyXXRIWIuQ50

    https://data.oecd.org/tax/tax-revenue.htm

    https://www.budget.gov.au/2019-20/content/tax.htm

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