The ruthless decision Albanese had to make

July 30, 2021 â€" 5.00am

Anthony Albanese and Jim Chalmers decided months ago to use the dead of winter to drop Labor’s old tax policies into a deep crevasse so they could lighten their load on the march to the next election.

The Labor leader and treasury spokesman did not plot to make their move at the very time Australia stopped to watch Ariarne Titmus win gold in the 400-metre freestyle in Tokyo. That was just luck. But they had enough political cunning to do it when most of the country was looking the other way.

Shadow Treasurer Jim Chalmers and Opposition Leader Anthony Albanese. Credit: Alex Ellinghausen

Only after the final decision was made, in three meetings on Monday morning, did some of the Labor shadow cabinet members realise Titmus was racing in the Olympic final. “I was completely oblivious,” says one.

So the party’s media advisers called a press conference for 12.30pm to announce a pivotal change and found that almost everyone’s attention was on a race that finished a few minutes before Albanese and Chalmers walked out to the cameras.

Everyone knew it was better to get it done quietly. Everyone knew it was nothing to be proud about. But they knew the policy clean-out had to be done before Parliament resumes next Tuesday, when they want all eyes on Scott Morrison.

This was a delayed, but necessary, admission of political reality. Labor had argued for more than five years that its changes to negative gearing and capital gains tax would help improve housing affordability and add more than $30 billion to the budget. It agonised for almost three years over whether to repeal or amend income tax cuts for people on higher incomes.

But it lost in 2016 with a big policy platform and then lost in 2019 with an even bigger one. Albanese and Chalmers chose to take the hint.

The Labor faithful are venting their disappointment but their complaints will not change the outcome. Albanese loves Labor and its history but is not as sentimental as some of his branch members. Those who romanticise the leaders of the past can easily forget that Labor has not taken power from opposition in living memory by proposing higher taxes. Not under Gough Whitlam, not under Bob Hawke, not under Kevin Rudd.

And progressive voters are not the only ones who count when an election is under way, as former Labor leader Bill Shorten discovered in Gladstone in April 2019 when a tradie asked him for a tax cut for workers earning more than $250,000.

The plan to reposition on tax has been a long time coming. Albanese formally dropped the policy on franking credits, which would have raised a phenomenal $58 billion over a decade, in early January. It took months of engagement with caucus members to take the next steps on income tax and negative gearing.

Most of the discussions were outside shadow cabinet and rarely split along factional lines. The divide was between pragmatists and idealists, not left and right, and there is no doubt who won. The final decision sailed through the expenditure review committee, the shadow cabinet and the caucus at 8.30am, 9.30am and 10.30am on Monday. Some MPs made their concerns clear by advocating a stronger policy on housing affordability, but nobody spoke against the outcome.

This was a calculated risk for Albanese and Chalmers and could have backfired if just one or two MPs had chosen to start a fight. But a big part of the caucus discipline was the memory of the last election.

“After 2019, you cannot exaggerate how desperate people are to win government,” says one MP.

Some caucus members can feel a victory within reach. The polls show it.

Voters have cut their rating of Morrison’s performance, although not to the point of preferring Albanese as prime minister. The Coalition’s primary vote is down. The government is scrambling to catch up with another coronavirus outbreak, needing four updates to its financial support for people in lockdown. And the vaccine rollout is still too slow.

The result? Labor is in its strongest position since the last election. It has a chance to topple Morrison and does not want to fumble it again. One caucus member puts it this way: “Unless we blast the guy out now, he could be there for a very long time.”

The objective is to make the next election all about Morrison rather than letting the Prime Minister turn it into a referendum on a Labor tax agenda. This is obvious but also fundamental because the coming election will be so different to those in the recent past, and not just because it will be about the pandemic. This time, a prime minister will have to run on his record after serving a full term. This has not happened since 2007.

An immediate test for Albanese is whether he can intensify the pressure on Morrison when Parliament resumes on Tuesday. This will be a cut-down Parliament with dozens of MPs and Senators forced to stay home in lockdown, but Labor will not get many chances to use question time before the election. There are only eight sitting weeks before the end of the year, and four of them come in the next five weeks.

The whole point of Labor’s move on Monday was to make sure it could keep the focus on Morrison rather than spending time in Canberra talking about itself. If Morrison chooses a March election â€" still a preferred option among some cabinet ministers â€" Parliament may not even meet next year before the country goes to the polls. Every sitting day counts.

There is a cost to Labor’s new pragmatism. By sacrificing its negative gearing plan, the party has given up a costed policy that was welcomed by many economists as a curb on property speculation. Now it has no answer to the 60 per cent of voters who think younger Australians will never be able to buy their own homes.

The party could be heading for strife on health policy, also, because it is likely to overhaul the funding for cancer care that it took to the last election â€" something Shorten put at the heart of his campaign. The legacy policy will go. The question that worries caucus members is whether a better approach will take its place.

Albanese has thrown away the old ideas before he has enough new ones to convince the Labor faithful, let alone swinging voters, that he has a compelling agenda for government. It is a risk, but it has paid off for others. Morrison unveiled his agenda six weeks before polling day.

This was a decisive week for Labor â€" a week when the caucus, so badly bruised by the last election, showed how hungry it is to drive Morrison from power and install Albanese in his place. It was disciplined. In fact, it was utterly ruthless.

But as Ariarne Titmus showed in Tokyo, that is the way to win.

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David Crowe is chief political correspondent for The Sydney Morning Herald and The Age.

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