Tax cuts may exacerbate inequality, but that is a price Labor is willing to pay to win seats in the coalition | Kathryn Murphy

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IIf you’re a political tragic, you’ve probably heard of Emma Dawson. If you are a civilian, let me introduce it. Dawson runs the Per Capita Foundation – a progressive think tank. Prior to that, she worked for SBS and Telstra. After institutional gigs, she worked as a political advisor during the Rudd and Gillard governments.

A few months ago, Dawson was asked labor Party Elders of whether to contest Melbourne’s seat in the upcoming federal election – a region that is now a stronghold for the Greens. Her initial inclinations were yes. But since she was in good contact, and could read the play, Dawson saw a big problem with the line.

Work was about to to give up her opposition To the Morrison government’s Phase III tax cuts, Mostly benefit from high-income people which Dawson strongly criticized. A few days before Anthony Albanese declared Labour’s final landing point, I gave up the mile.

The tax decision wasn’t the only factor behind her tactical withdrawal, but it certainly was one.

Dawson opposed New Labor’s position on principle, and given the Green Party leader (and current Melbourne member) Adam Bandt was immediately on the offensive about The Labor Party’s political “greedy” decisionThe prediction was clear. She was going to be entering a really tough competition with a lot of weight in her purses.

“I have been a strong and consistent critic of the third phase of the coalition’s tax cuts since it was announced in the 2018 budget,” Dawson told me this week. “They are going to massively take out income inequality and remove significant annual returns from the federal budget at a time when our focus must be on investing in a better future on the other side of Covid-19.”

Dawson says she still “strongly believes” that the election of a Labor majority government is central to making Australia a “more equal, nurturing and sustainable society”.

But she says there were significant structural problems in the economy long before Covid arrived – “high home prices, low wage growth, high unemployment, increased underemployment, unsafe work, undervalued care and the need to act urgently to decarbonise.” of our economy.

These are significant policy challenges, Dawson says, “that cannot be fixed with more tiered tax cuts.”

On the essential political point, Dawson is absolutely right. Phase III tax cuts make the Australian tax system less progressive than the status quo, and are financially unsustainable.

Her implicit view is also correct. Right now, at this point in history, governments need to prioritize having financial firepower to ensure Australia can grow sustainably after the dual shocks of the global financial crisis and pandemic.

They also need to maintain a laser-like political focus on ensuring that inequality does not worsen here, because the slippery post-truth era we live in, and the dangerous return of demagogy that reached global apotheosis when Donald Trump arrived in the United States. The presidency has its origins in rising inequality, stagnant wages, and meager economic growth.

How did you get to this?

Labor has begun the third phase of its internal deliberations with the major players in the hope that they can balance their own circle of values ​​by maintaining the bulk of the government’s tax cuts. With a higher rate being imposed on high-income earners in Australia. But in the end, this was not the opinion of the majority.

During the last parliamentary session, when the Labor Party thought the government in exile rose to confront a social democratic moment that never materialized, there was a renewed and substantive political deliberation on a plethora of complex proposals.

But after the bitter defeat in 2019, some policy deliberations, such as tax talks, have become more like risk assessments — how can this particular commitment be turned into a weapon against us?

It would be a mistake to present Labor’s tax landing point as being about defense, though.

This decision also says something about where Labor wants to position itself politically in the looming battle with Scott Morrison.

I started this column with Emma Dawson. This short article highlights the negative impact of this week’s tax decision on any Labor-Greens competition in Melbourne, and seats like Melbourne.

Now Labor wants Melbourne back. But that is not the current campaign goal. Anthony Albanese is a progressive holding a progressive seat and in danger of falling to the Greens. But if you listen to what Albanese was like He says for a number of years now (And I advise you, because it’s not an artificial talking point, which I’m sure he means), his almost constant refrains are progressive people They should stop the unproductive flickering inside their bubble.

Change happens when minds change. Applying Albanian creed to the political arena, it means that the PKK wins elections when it can communicate with people from outside the tribe, and when it can convince the people who left the tribe to return. The Labor Party is not focused on winning progressive seats. You want (and need) to win coalition seats to form the government.

For marginal seat holders Attend a digital training session Run by Labor National Secretary Paul Erickson in May, Michelle Rowland – the first MP to hold a seat in Western Sydney by a margin of less than 3% – asked him to show him the path to victory in the upcoming election. Erickson told her that the campaign would target coalition-controlled seats in the outer suburbs and districts. The intended voters were working families worried about getting by.

With these goals in mind, during the deliberations about taxes, Roland told her colleagues that she didn’t want to stand in the pre-polling booth in Blacktown, talk to target voters, and advocate for tax increases—either real tax increases, or even worse, fantasies, like death tax, which was an armed version of Labor’s outright credit policy in 2019.

If Labor did it again, Roland’s view was that Morrison would win. This was the opinion that ultimately prevailed.

Not everyone agrees with the decision. Revenue from taxes increases spending on money, and there are always a lot of spending priorities. In an environment where debt and deficits have lost prominence because the pandemic has reshaped the rules, workers will have room to move, even without revenue measures to fund investments, particularly if they can find endowments, such as discretionary grant programs, to offer as savings.

But whoever wins the next election will have to deal with the calculus that comes on the other side of this crisis.

Labor will likely increase its chances of gaining power by avoiding a fight over tax cuts now.

But in the end, once Australia transitions to any form of normal Covid-19, the next federal government – whether led by Morrison or Albanese – will have to confront the challenges that Dawson has nominated as compelling reasons for states not to reduce their fiscal power by giving tax cuts to people who do not They really need it.

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of Algulf.net and Algulf.net does not assume any responsibility or liability for the same.

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