Setting the stage for tax cuts that will cut low-income Australians to the bone

Adam Ford writes: I fail to comprehend how Bernard Keane has acquired such a disoriented bee in his bonnet about the stage three tax cuts (“Why progressives should get behind the stage three tax cuts — no, really”). If he thinks having a tax regime where battlers on a mere $45k a year are taxed at the same rate as people earning $200k isn’t going to significantly worsen inequality in this county in perpetuity and doesn’t represent the absolute acme of neoliberal fantasy thought, then I’m left wondering how he manages to come up with so much insightful and morally grounded work on just about every other topic he writes on.

The proposal is utterly obscene, and if waived through by a Labor government would represent the worst (of many) abrogation(s) of the entire supposed moral purpose of the party. And Keane has done such a good job tallying up all those other abrogations I’m left wondering how this particular blind spot has progressed into a complete failure of all visual faculties.

David McKenna writes: The headline caught my attention immediately. I consider myself one of Keane’s so-called progressives and was astonished to presume there could be a progressive argument in favour of the tax cuts. But I was wrong. It’s a politically savvy analysis of the issues facing Labor’s commitment to high-end tax cuts. You gotta love it when your opinion gets overturned by savvy analysis. 

Peta Newbound writes: A federal backbencher is paid $225,742 (2.3 times the average earnings of a full-time worker) a year. It is unbelievable that people at this income level and higher can grant themselves a huge tax cut yet let a single person on unemployment benefits survive on $19,749 a year. At that rate of income, it is more difficult for someone to be able to find work because of all the pressing financial issues that need to be dealt with.

Prime Minister Anthony Albanese’s promise of these tax cuts was a desperate move to grab the votes of the wealthy. This ALP government might be “centrist right” but it is not aiming to help the poor and middle class, right or left. How do those people feel about private education being overfunded by $3 billion and public education being underfunded by $6 billion? How do those people feel when the government is giving tax rebates for private health insurance when they have no choice but to go on a waiting list at a public hospital or spend time searching for GPs who bulk-bill?

Nick Houston writes: Keane is optimistic that the ALP will reform anything. I cannot see any reform happening — just management of the economy. I also cannot see any wage rises when set off against inflation. 

What the ALP should do is lure the Liberals into a cost-of-living trap, allow Opposition Leader Peter Dutton to howl about this and allow him to think the ALP might scrap the tax cuts. Then, when the pressure is unbearable, move on with the tax cuts but aimed at lower-income earners, thereby addressing cost-of-living pressure in the battler class. And then put in a super profits tax and use that to pay for the benefits increase. No broken promises and costs of living done and dusted for most voters. The ALP wins government with an increased majority at the next election.

 The only thing is, the ALP is both too stupid to do this and does not care about the battler class. It loves the neoliberal economy and dumping shite on poor people while pretending not to be shite dumpers. It’s in its DNA now.

Peter Barry writes: The stage three tax cuts should be adjusted to reflect the current state of the economy. It is not justified for a Labor government to provide large benefits to those already well off while the average Joe/Jane struggles to meet their basic needs. The total amount should stay the same, as promised, but skewed to better support those on lower incomes. 

Bill Morgan writes: I was perplexed when Labor allowed itself to be wedged by Scott Morrison to commit to the cuts years ago, but I agree now may be the right time. Viewed logically at the time they seemed absurd, given the Coalition’s “back in black” surplus prediction was mugged by the reality of COVID and the required fiscal indebtedness, and the inflation that then ensued. Given the likelihood of two consecutive surpluses, dampening retail demand and cost-of-living woes, now is the time for the tax cuts.

Perhaps they could be slightly more targeted to the poorer taxpayers. I agree that Dutton and the Murdoch commercial media would be relentless if Labor reneged on its promise.

Greg Hills writes: I agree with Keane’s logic. Better to keep this promise. One less piece of ammo for Dutton.

Cheryl Marquez writes: Maybe if the tax cuts were combined with an increase in all Centrelink payments to above the poverty line they’d be more acceptable?

Dominic Staun writes: All good arguments from Keane, but the fact remains that the stage three tax cuts are fundamentally unfair, and fairness is essential to a cohesive society. If Labor goes ahead with them I will place it second last on future ballot papers.

David Howe writes: As the Australia Institute has said: “The stage three cuts due to come into effect in July 2024 are the most expensive and most inequitable tax cuts in Australia’s history. If they were listed as expenditure, they would be the ninth most expensive program item in the budget.”

Those cuts could pay for a genuine program of social reform, such as expanded Medicare to include dental, a sustained public housing construction program, free university (OMG!), fast-tracked carbon-free electricity generation. I mean just think.

But no, Treasurer Jim Chalmers and his fanboys believe it is much more important to do fuck all about the things that matter to the majority and support a tax cut that will permanently flatten the tax system, make it less progressive, and provide the top 10% of earners with a massive ongoing benefit. The fact that politicians are among those getting the cuts seems overly convenient.

Crikey ran a series on state capture. I would argue the stage three cuts if implemented are a clear case of state capture by the rich. The political class that once championed policies to serve the greater good now pursues policies that serve only the rich.

Natasha Stewart writes: Why should I get a tax cut when I earn so much? Give it to those who need it. If Labor changes its mind it won’t affect votes from people such as me, but it may well secure votes from lower-income earners.

Robert Pulie writes: As I understand it, the tax cuts will result from a legislated erosion of our progressive tax system towards something more like the biblical tithe. And progressives are being asked to support something that is, by definition, regressive. Why? To improve the electoral prospects of the party that readily ditched its principles (again) when in opposition to evade the government’s wedging of it to improve its electoral prospects.

There’s no integrity in upholding a promise that’s already broken. And if broken promises are such electoral poison, how will Labor recover from its broken promises on transparency of government, humane treatment of asylum seekers and actual reduction of carbon emissions? While Labor continues to shadow the opposition, progressives will move to Greener pastures.

Don Maclean writes: Axing the stage three tax cuts isn’t an option for reasons presented by Keane. But restructuring them to benefit lower- to middle-income families etc at the expense of smaller tax cuts to the rich is also a no-brainer. 

Bracket creep does need adjustment. But tax cut promises based on 2018 legislation and Coalition ideology should be modified by better and fairer formulae as we near their implementation date of July 2024. This is especially true now that harder tax reforms of policies that caused our housing crisis etc are in the too-hard basket.