Bill Shorten has defended Anthony Albanese’s government as it prepares to break an election promise over negative gearing, arguing fairness should trump past commitments.
It has been widely reported Tuesday night’s federal budget will contain changes to negative gearing, the policy which allows landlords to reduce their bill at tax time.
If so, Mr Albanese will break his repeated election commitment to leave those tax settings alone.
While stressing that any changes are hypothetical until confirmed on budget night, Mr Shorten backed in the policy he unsuccessfully took to the 2019 election.
“It’s an idea whose time has well and truly come,” the former Labor leader told AAP.
In breaking an election promise on tax, Mr Albanese’s government will be repeating an act from its first term, when it re-designed Mr Morrison’s stage three tax cuts to be more generous to those with lower incomes.
Then a cabinet minister, Mr Shorten enthusiastically backed that change.
“Tax cuts for more people proved to be more palatable than tax cuts for people who already were pretty well-off,” he said.
“Because there were 13 million, 14 million winners and a relatively smaller number of perceived losers, in a cost-of-living crisis people thought that was pretty fair.”
It’s that same fairness principle Mr Shorten applies to the likely negative gearing U-turn.
“The idea that someone who might have three or four investment properties can turn up to bid on a house with a taxpayer subsidy in their wallet, compared to a young couple trying to buy their first home doesn’t seem fair to me,” he said.
Labor is taking the view it will be rewarded by an electorate concerned by rampant housing costs.
That’s a different calculation than with other infamous broken promises.
Bob Hawke’s 1987 election pledge that “by 1990, no Australian child will be living in poverty” was over-ambitious and unfeasible.
After winning the 1993 election, Paul Keating moved to scrap tax cuts promised as “L-A-W” because the money wasn’t there.
Tony Abbott’s 2013 election eve promise of no cuts to education, health and public broadcasters were reversed as part of wider cutbacks in the 2014 budget.
And Julia Gillard’s 2010 affirmation that “there will be no carbon tax under a government I lead” was a casualty of negotiations to form a minority government.
Sean Kelly, an adviser to Labor prime ministers Kevin Rudd and Ms Gillard, argues any broken promise can be powerful with voters as “it’s a betrayal (and) can have an emotional element”.
However, it’s hard to tell how each pivot will play.
“There is no single cut-through rule when it comes to broken promises. They all land in their own circumstances … and it’s very hard to take rules from the past,” he said.
In the case of Australia’s first female prime minister, Mr Kelly argues other factors were much more politically challenging.
“Julia Gillard had Kevin Rudd behind her, a wall of misogyny in front of her, and a minority government,” he said.
“Absent those things, I’m not sure that the carbon price broken promise looks quite the way it does.”