One of the oddities of the past week is the belief, apparently near-universal among the Press Gallery, that Peter Costello scored a win over Labor last week as regards tax policy. In the boxing-match view of politics favored by the Gallery, Costello did indeed win several rounds – Labor shadow ministers contradicted themselves, appeared confused, and so on. But by Wednesday, thanks to Bob McMullan, Labor had a clear line, refusing to rule out new taxes and charges but promising not to increase the ratio of tax revenue to GDP. Three days of sneers and innuendo from Costello haven’t dented this line or produced any sign of a backdown from Labor. There’s no reason to suppose Labor can’t carry this line to the election. As McMullan points out, the endless sequence of special purpose levies introduced under this government, not to mention the GST, make any commitment of the form “no new taxes or increases in existing taxes” (literally) incredible. A commitment to a constant ratio of revenue to GDP leaves plenty of room for financing new spending initiatives simply by holding some existing programs constant in real terms.
Labor was always going to have trouble coming to a defensible form of words on tax and expenditure, and they had an uncomfortable couple of days. But the period of greatest danger in these things is the first few days after the position is taken, and this period has now passed. The effect of Costello’s attacks has been to solve Labor’s biggest problem six months before the real campaign.
John Quiggin 
I do not understand why so many things I hear and read assert that anything less than an iron-clad committment to cut taxes is obviously electoral suicide for the Opposition. Is the entire Press Gallery in the top bracket? I don’t know about such things, perhaps they are.
I’ve got what I regard as a good, comfortable white-collar job in a big company (only 8 years away from my long-service now ;^) and among my friends and colleagues, more ‘progressive’ tax scales and even a modest ‘Wealth Tax’ would be well-regarded if accompanied by the right service enhancements.
g.shine
I would imagine the entire Press Gallery is indeed in the highest tax bracket.
For those of us that are trying to make up our minds, the thought of paying higher taxes isn’t an instant invitation to vote for that party. Labour’s tax problem isn’t over; why can’t they just commit to saying “no new taxes or increases in existing taxes”?
After all, this is the highest taxing government in history; surely they can’t STILL want more out of us?
Scott,
In fact that is what the ALP is promising.
Overall tax won’t rise as a % of GDP but the tax mix may change.
why can’t they just commit to saying “no new taxes or increases in existing taxes”?
if they promised that, wouldn’t they would break it as soon as they closed some loophole in income tax or something?