The radical plan to flatten Australia’s progressive tax system is the bastard child of base politics, the Faustian pact Labor made in its ruthless determination to win power.
It is the base politics of Scott Morrison’s division-by-design that summoned into being this brutal attack on egalitarianism, removing an entire tax scale so that people earning $200,000 would pay the same 30% rate as those on $48,000.
It is base politics that convinced Labor that, after the bruising 2019 election, it could not win office if it was labelled the “higher taxing party”, even if that meant rubber-stamping $9,000 tax cuts to those earning $200,000 and above and just $900 cuts to an average nurse.
And it is base politics that now makes it so dangerous for Labor to break its promise, regardless of the obvious damage it will do to the budget and Australia’s social fabric.
This is the simple political reality of the stage-three tax cuts. In an age of low-trust politics, driven by wrath and fury soundbites, a government that wilfully breaks an election promise is putting itself in the toaster.
I’m not here to condemn Labor for the successful small-target strategy it employed to keep the focus on a failing government in the lead-up to the last election.
Despite clear misgivings at the time, the then Labor opposition was not prepared to allow it to be so crudely wedged and I, alongside many others, accepted this as shrewd, mature leadership.
There is no saying how the alternate scenario would have played out, but it was certain to have provided significant purchase for the sort of orchestrated attacks from Morrison, Clive Palmer and Rupert Murdoch that went a long way towards stealing the 2019 election.
The question for the prime minister is, having made his Faustian pact, how does he face the consequences of this choice: to the budget, to the economy and, most pointedly, to the people who elected him?
According to this week’s Guardian Essential report, voters’ attitudes towards the changes to the tax system are luke warm.
These poll results show the overwhelming support for a progressive tax system where the wealthy pay a higher rate than the poor and services are properly funded. Low tax arguments are far less likely to land.
This suggests a recalibration on taxation is not just winnable, but that a contest on the merits of a system based on capacity to pay could be a political sweet spot against a Coalition that will always back the rich.
However, these are contrasted with results showing the Australian public is – on balance – opposed to promises being broken, even when circumstance change, although not overwhelmingly so.
Unsurprisingly, those who see a personal benefit in the tax cuts are less inclined to scrap them, but once you get past the big winners there is acceptance that Labor should be able react to changed economic conditions.
None of which solves the problem that once broken, the scrapping of the promise will define Albanese every bit as much as his predecessors.
From Keating’s law tax cuts that never came, to Gillard’s “no climate tax” (the one that never was) to Abbott’s vow of “no cuts to health, education and the ABC” that presaged the godfather of all austerity budgets, leaders who are pinged lying rarely get the chance to do it twice.
The only contemporary survivor of a bald-faced porkie was John Howard’s “never, ever” GST effort which he recast as a promise for a single term of power. He then had the wit to take that to the following election to seek a mandate to break it.
Whether Albanese has this flexibility to delay and seek a fresh mandate is unclear: even pushing out the promised tax cuts beyond the next election will be rightly portrayed as a repudiation of his Faustian pact.
But dig deeper into the pact’s origin story, as I have this week, and maybe there is a way through.
The Faust parable written by Goethe has the protagonist, an alchemist, doing a deal with the devil to exchange his soul for a life of unlimited knowledge and worldly pleasures.
As part of said pleasures, Mephistopheles conjures into being Gretchen, a maiden with whom Faust has his way and then a child. When she discovers the sordid truth of the union, she is so appalled she kills the bastard child and Faust is left to grieve his shame.
But the second and less quoted section of Goethe’s epic has Faust making peace with the world, engaging in politics to tame the forces of war and nature, so that on his death the angels determine that his unending striving for redemption is enough for him to proceed to heaven.
The real point of the Faustian origin story is not one of condemnation for the original sin, but rather one of salvation: having made the deal with devil what will be required to save one’s soul?
The second act of the Albanese government’s Faustian drama looms as just as important as the original deal.
From a position of power, can it build a tax system fit for the 21st century; one that corporates and the wealthy cannot hide their earnings and where capital is not privileged over income?
By invigorating the care economy, driving the energy transition and maintaining the NDIS, can it nurture a civility that recasts taxation as something to be embraced as an expression of citizenship rather than avoided as a statement of alienation?
Can it leverage the trust that comes with not blithely breaking election promises to ultimately delay these regressive cuts and seek a fresh mandate from the Australian people to preserve this vital part of who we are as a nation?
Redemption lies in not just building the case for our progressive tax base but for some of the other equitable fiscal policies that have been jettisoned in pursuit of victory: negative gearing, franking credits, family trusts, resources rent tax and the inheritance of privilege.
The stakes are high. Like Faust, the eternal soul of this government hangs in the balance.
Peter Lewis is an executive director of Essential, a progressive strategic communications and research company. He will discuss the findings of the latest Guardian Essential report live at 1pm today with Guardian Australia’s political editor, Katharine Murphy, and the Australia Institute deputy director, Ebony Bennett. Free registration here
