But there’s often something of interest that gets overlooked a bit. In this case, it’s the government’s proposal to legislate tax cuts for the rich seven years in advance. This is an idea with a lengthy and inglorious history, taken to a new extreme.
As far as I know, the first government to legislate future tax cuts was that of Paul Keating, who proudly proclaimed, before the 1993 election, that his tax cuts were not mere promises, but L-A-W. Sadly, he ran into difficulties and the L-A-W had to be amended to take some of the tax cuts back.
The next instance was that of John Howard and Peter Costello, in the 2007 Budget, which promised three years of tax cuts with an aspiration for two more. Kevin Rudd matched most of this and carried through, unwisely in my view, given that the exigencies of the GFC forced him to break other promises. The lavishness of the Howard-Costello tax cuts and the near-stagnation in nominal incomes since then explain why we haven’t had any significant tax cuts since – the bracket creep that Howard and Costello counted on never happened.
The Morrison-Turnbull proposal takes the worst of Keating and Costello, combines them and squares them. Legislated tax cuts, going far beyond the forward estimates and the next two Parliaments, based on wishful thinking about future income growth. This farce makes Morrison a serious contender for “worst Treasurer ever”. His proposals are substantially more regressive than anything proposed before, while marking a new low in corruption of the Budget process.