Mark Riley: Prime Minister Anthony Albanese wins first round of tax battle, but war is far from over

Former Labor cabinet minister Joel Fitzgibbon was renowned for his straight talking. It frequently got him into trouble. Often with his own side. But his undiluted views were always worth listening to. And it was a dose of Fitzgibbon’s characteristic plain speaking that persuaded many in Labor’s caucus to hold their noses and wave through Scott Morrison’s stage three tax cuts in July 2019. “You can’t deny the punters a tax cut from opposition!” Fitzgibbon insisted. “Particularly so soon after an election where we had our backsides kicked.” He was right. Bill Shorten went to the 2018 election promising to repeal stages two and three of the Coalition’s tax package. He lost. Even Morrison described that as a “miracle” result. When Albanese followed Shorten into the Labor leadership, he decided to wave the changes through. Perhaps persuaded by Fitzgibbon’s frank advice, he conceded the battle to keep fighting the war. This week, Peter Dutton did much the same thing but with one major difference. Faced with the prospect of denying the punters an even bigger tax cut less than two years after his Coalition had its backside kicked at the election, Dutton withdrew from battle to continue fighting the war. Unlike Albanese, though, he says he is not abandoning his party’s principles on stage three altogether only to change them back after an election. Dutton is promising to take a revised tax plan to the next election, based on the principles of the original stage three. He sees his withdrawal from the current fight not as a defeat but a tactical retreat. This is in stark contrast to Albanese’s approach in opposition. He argued passionately against stage three in the Parliament. He fought to split the Bill so Labor could vote for stages one and two but against three. But when the Coalition and Senate crossbench defeated that move, Albanese folded his cards completely. At that point, he could have recommitted to Labor principles and promised to redistribute stage three more equitably in government. But he didn’t. He feared the same fate as Shorten if he went into the 2022 election facing yet another tax brawl. Instead, he promised to keep the plan in government. In a special for Seven’s Spotlight six weeks after Albanese’s election victory, I put to him that he truly didn’t believe in stage three. I suggested it impugned his fundamental commitment to helping those on lower incomes while at the same time ensuring the rich paid their fair share of tax. His reason then for not breaking his promise on stage three has come back to haunt him: “My word is my bond.” When I suggested he didn’t honestly believe in stage three, he added: “What I believe in is certainty for people. We said we would provide that certainty — and we will!” And now he certainly won’t. Equally, Dutton’s front bench committed to fighting against any changes to stage three. And now they won’t. Some uncomfortable quotes have come back to haunt Dutton, too, including one Treasurer Jim Chalmers leapt on this week: “The Opposition Leader called for an election on a policy he is now voting for!” he bellowed. “That would be a pretty strange election!” It was quite the zinger. The truth is that Dutton doesn’t want a strange election. He wants to drag Albanese into a traditional one. And for the Coalition, that means going in with a plan to deliver lower taxes. Dutton’s economic team is now working on “improvements” to stage three that could provide more relief to middle Australia while also addressing “aspiration-destroying” barriers at the higher end. If they succeed, then Joel Fitzgibbon’s words will again ring in Albanese’s ears as he confronts the prospect of denying the punters a tax cut — not from opposition this time but from government.