As we enter the holiday season after a frenetic period of parliament, it’s timely to reassess the demands outside experts typically make of governments and their lament that egocentric politicians lack courage.
A good case study is the Stage 3 tax cuts. Experts tell us that these top-end tax cuts are unfair and should be scrapped or heavily modified. But these experts don’t for a moment consider or couldn’t care less about the ramifications of the Albanese government breaking a pre-election promise it repeatedly made.
Some experts criticise Labor for promising to keep the Stage 3 tax cuts in the first place. They assert they have political judgement far superior to that of Anthony Albanese who has been in parliament for 26 years.
Just tell voters circumstances have changed, the experts advise – as if this is politically costless. It’s an excuse as old as humankind. “I promised you my loyalty, but circumstances have changed.” “I promised you I’d pay you for your cattle, but circumstances have changed.” “I promised you these tax cuts would be delivered, but circumstances have changed.
These same experts complain about the untrustworthiness of politicians while demanding they be untrustworthy.
Consider the political dynamics at the next election. Confronted with a structural deficit, as confirmed in the Morrison government’s final budget, the Albanese government would need to weigh the cost of ongoing deficits against the cost of breaking a promise.
The opposition parties would certainly campaign against a broken promise.
Such a campaign might not be enough to change the government, given that the Coalition has only 58 of the 151 seats, but with Labor’s present slim majority, it would be more than enough to plunge it into minority government.
Is minority government in the national interest? Experts would claim the minority government’s leadership lacked courage – reminiscent of the Black Knight in Monty Python and the Holy Grail who, having lost both his arms in a sword fight, declares “‘Tis but a scratch!” Bravely he fights on, only to lose both legs as well.
In a minority government, these experts would continue to allege that Albo the Black Knight lacked political courage – but in truth he would lack numbers in the House of Representatives.
Undeterred, such experts demand wider economic reform. But try getting unpopular economic reforms through parliament as a minority government.
The Stage 3 tax cuts are similar to those I proposed in my 2005 policy book, Vital signs, vibrant society, but they were conditional on base-repairing measures proposed by my then-backbench colleague, Malcolm Turnbull.
Repairing the tax base has proved almost impossible, as witnessed by the fate of the measures proposed by the Shorten-led opposition at the 2019 election. The Morrison-led opposition campaigned vehemently and successfully against reforms to negative gearing and franking credits.
The only government to have taken a tax reform proposal to a federal election and emerged victorious was the Howard government with its GST. Even then, it lost 14 seats and gained only 49 per cent of the two-party-preferred vote.
Labor’s best chance at successful reform is to begin by repeatedly telling a compelling story about the challenges facing the nation and the opportunities that will arise if those challenges are met and overcome.
Only then will the Australian people understand what is at stake. And they will likely support that better future.
As the ALP’s review of the 2022 election led by Greg Combet and Lenda Oshalem recommended, this future can be of Australia as a renewable energy superpower, undertaking the early-stage processing of minerals using renewable energy in regional Australia.
This new reform era would build on the Hawke and Keating reforms, such as allowing the entry of foreign banks, tariff reductions, a shift to enterprise bargaining and national competition policy. These weren’t politically popular, but they helped create Australia’s open, competitive economy.
As Christmas approaches, many Australians celebrate what they consider the greatest story ever told – the birth, teachings, death and resurrection of Jesus Christ. Whether or not you are Christian, you’ll probably agree with the power of storytelling to persuade the people.
Experts might view politicians as no more worthy than moneychangers in a temple, but It would take a miracle to convince the people that it’s okay for politicians to break promises solemnly made.
Craig Emerson is managing director of Emerson Economics. He is director of the Australian APEC Study Centre at RMIT University, visiting fellow a the ANU and adjunct professor at Victoria University’s College of Business.