Prime Minister Anthony Albanese’s reversal of tax cuts could be his ultimate masterstroke – if it can buy the nation’s forgiveness for his repeated lies about not doing it.
With a few simple tweaks to the Coalition’s reforms, he has delivered a much bigger windfall to 11 million Aussies – at the expense of 1 million high earners.
But even the top end of the city will still be best off overall, getting about $400 extra in their pockets every month from July 1, albeit less than the $750 per month they would get under the previous plan .
Those with a taxable income of $60,000 will now see a tax cut of $1,179, while those with $80,000 will be $1,679 better off and $100,000 a year earners will pay $2,179 less in taxes.
The move has left the prime minister’s critics confused.
The opposition’s focus on the Prime Minister’s lie, rather than on the cuts themselves, tells its own story… and it is a huge victory for the government after weeks of bad press.
“The Prime Minister has completely destroyed his credibility with the Australian public,” Dutton told Ray Hadley.
“The Australian public will not support a liar as Prime Minister.”
There were even astonishing indications from the opposition that they could reverse austerity if returned to power, taking money out of the pockets of millions of voters.
Deputy Opposition Leader Sussan Ley said she would “absolutely” support an initiative to repeal the cuts, before later backtracking and denying she would reverse them.
The original phase three cuts were drafted before the Covid-19 crisis, before the cost of living crisis – times have changed, needs are different. Families are hurting.
Hardworking Australians need help now – and a tax cut that provides a healthy boost to take-home pay can only ease their pain.
Prime Minister Anthony Albanese’s tax cut reversal could be his ultimate masterstroke – if it can buy the nation’s forgiveness for his repeated lies about not doing it (the Prime Minister is pictured with partner Jodie Haydon)
Opposition leader Peter Dutton disappeared in the wake of Albo’s political somersault as he formulated a response before coming out to criticize the prime minister on 2GB.
The Prime Minister will face a barrage of TV ads at the next election telling voters he cannot be trusted – but by then the masses will have hundreds or even thousands of dollars more in the bank.
Economist Steven Hamilton was a proponent of the previous phase three tax cuts, which were specifically intended to benefit the top 10 percent of the country’s high earners.
The university professor of economics – and former advisor to the Ministry of Finance until 2018 – sang their praises last month.
He defended these cuts as targeting the country’s highest-paid ‘because they pay a lot more tax’ and even suggested the Coalition’s plans were ‘demonstrably inadequate’.
He warned that any move to help the low-paid would fuel inflation rather than help, and said high earners would simply bank their extra money rather than spend it.
He added: “From where I stand, as an expert on public finances, Phase 3 (of the Coalition) is largely fine and just not as big of a deal as many make it out to be.”
But just six weeks later, Hamilton is now a big fan of Labour’s new tax proposals.
“As anyone who follows me may have noticed, I like them,” he posted on X on Wednesday evening.
“The key thing that most commentators have missed is that they are not just addressing fairness, but also economic efficiency.
“All in all, I am very impressed with this series of changes.
Economist Steven Hamilton (pictured with former Prime Minister Scott Morrison) was a supporter of the previous stage three tax cuts but has now endorsed Labor’s revised version
It’s no wonder the Prime Minister suddenly seems to be smiling more in every recent photo (Anthony Albanese pictured)
‘Reducing marginal tax rates for those earning between $18.2k and $45k is IMO a better use of revenue in terms of *both* equality *and* efficiency, because a lot more people live there and they are more tax sensitive. ‘
He added: “The key political point here is that anyone earning less than $148,000 is significantly better off under the new design.
‘Just in terms of winners and losers, the numbers are in favor of the winners. Will the opposition block a larger tax cut for the vast majority?’
It’s no wonder the Prime Minister suddenly seems to be smiling more in every recent photo.
When cuts start to feed into pay packets in six months’ time, voters will immediately forget the Prime Minister’s countless repeated promises that ‘his word was his promise’.
The gamble for the Prime Minister is to hold on to that good feeling until the next general election, until 15 months later, when he will be shown non-stop images of him being called a liar.
The tax cuts are an easy hit to win over voters who feel let down by the cost of living crisis, but come election time it will come at a high price.
Whatever the case, these tax cuts will be the crucial turning point in his leadership.
