The only explanation that the Prime Minister seems to be able to come up with to justify going ahead with the Stage Three Tax Cuts is that Labor had committed itself.
Yes, Labor promised to keep the wealthy and privileged tax cuts. Because of the circumstances at the time, they were legislated.
Since the election and the disclosure of Australia’s authentic debt, with the enormous amounts required to finance campaign commitments, repair the NDIS, and care for the elderly, the imperative for the cuts is now unwarranted.
The Stage Three Tax Cuts will overwhelmingly benefit the rich, but will they help the economy? The short answer is “no.” Those who benefit from the reductions won’t spend it and will probably invest it in accumulating more wealth. Nor would it encourage them to work any harder.
Given there are so many justifications for cancelling the cuts, Labor is afforded the opportunity to demonstrate the philosophy they talked about before and during the election campaigns.
That being equality; a fairer society.
Giving the tax cuts defies logic when stacked up against the reasons not to. They will not improve equality.
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When talking about Labor’s carbon tax, I think it was Tony Abbott who said something like anything you can legislate; you can be un-legislate.
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Analysis by the new parliamentary budget office projects that the wealthiest 1% of Australians will benefit as much from the stage-three tax cuts as the poorest 65% combined.
When asked at the August 29 National Press Club luncheon if the stage three tax cuts would go ahead, some journalists interpreted the Prime Minister’s answers as unequivocable, but others thought he left a little wiggle room. It’s hard to find an economic journalist who openly supports the cuts, and even MPs like Coalition backbencher Russell Broadbent find them ludicrous and called for them to be axed.
Mind you, the very same journalists cunningly and currently suggesting they abandon the legislation will be the same ones who will denounce them for their hypocrisy if they do.
Labor is certainly caught between a rock and a wrong place. Where has all that love and compassion gone? The fork in the road where economics meets equity.
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It is often difficult to distinguish a change of mind from a broken promise, particularly in politics. It takes courage to change your mind for the greater good.
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The Australia Institute has made some pertinent points about the Stage Three Tax Cuts.
Key Findings:
- Stage 3 tax cuts mainly go to high income earners with those earning more than $200,000 receiving a tax cut of $9075 per year, with CEOs, all federal parliamentarians and surgeons winning big.
- Those earning less than $45,000 will get nothing from the stage 3 tax cuts, with aged workers, disability carers, bakers, hairdressers and minimum wage workers among those worst off.
- If the Low and Middle Income Tax Offset is not extended, it will end this financial year & will mean 90% of taxpayers will be paying more tax.
- Even after the stage, 3 tax cuts come in, 80% of all taxpayers will still be worse off.
- The LMITO goes to middle-income earners with a maximum rate of $1,080. If the LMITO is not extended in the budget later this month, occupations like teachers, nurses and midwives will be paying $1080 more in tax.”
“Our research reveals that under this plan, billionaires benefit while battlers get slugged,” said Chief Economist Dr Richard Denniss from independent think-tank the Australia Institute.
“How is it reasonable that a bank CEO earning $5.2m a year will be given a $9,000 tax cut, while someone working in aged care or on the minimum wage receives nothing?”
At $243 billion, it is a considerable commitment when there is so much debt and so much screaming out to be done or repaired.
When questioned, Albanese has repeatedly stated that Labor has not “changed our opinion” on the tax plan. A plan that he had initially opposed.
“Parliament made a decision to legislate those tax cuts, and we made a decision that we would stand by that legislation rather than relitigate it.”
Poverty is a political choice.
By refusing to raise JobSeeker above the poverty line, but locking in tax cuts for the rich, Labor is choosing to leave hundreds of thousands of people in poverty.
Billionaires like Clive Palmer don't need more money. People on JobSeeker do.
— Adam Bandt (@AdamBandt) August 29, 2022
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The notion that a few privileged individuals can own the vast majority of a country’s wealth and the remainder own little is on any level unsustainable, politically, economically or morally.
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To retain its present support, Labor must demonstrate that it’s indeed a party of left-forward thinkers and willingly display its ideology to one and all. These changes make the tax system far less progressive.
The Guardian reported that the cuts “would abolish the 37% tax bracket, lower the 32.5% bracket to 30%,” and increase the top tax bracket to “start at $200,000 compared with $180,000.”
At the National Press Club, the Prime Minister stood firm on the Stage Three Tax Cuts:
“Prime Minister Anthony Albanese has reaffirmed his party’s commitment to keep stage 3 tax cuts for high income earners, despite growing calls for them to be delayed or scrapped.
Speaking at the National Press Club in Canberra for the first time as Prime Minister, Mr Albanese urged voters to look at the history of the party’s position on the tax cuts package.”
Ostensibly, the public owes a debt of gratitude to Albanese for the downfall of a rotten Prime Minister and a rotten Government. Our days seem less stressful without Morrison’s verbal lying assaults on all things Labor. And whilst on the one hand, Labor has performed well, on the other they have left many things untouched.
On the plus side, Chris Bowen has performed well turning around Australia’s climate policy, but many are questioning how much more they could have done. There has been a dispiriting decision to open vast areas of Australian waters to new oil and gas exploration. It is also pushing ahead with new coal and gas, regurgitating and ignoring a clear mandate to do more.
Yet another disappointment has been Albanese’s inability or lack of desire to remove his predecessor’s “obsession with secrecy”, though Question Time has shown slight improvement.
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We live in a failed system. Capitalism does not allow for an equitable flow of economic resources. With this system, a small privileged few are rich beyond conscience, and almost all others are doomed to be poor at some level.
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My thought for the day
The basic test of any nation surely must be the manner in which it treats its most vulnerable.
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