It is all but certain that Labor will proceed with the Liberal Party’s Stage 3 tax cuts. The cuts, which take effect in July 2024, are an enormous handout to the rich, and are forecast to cost $313 billion over ten years. Of that amount, around two-thirds will go to people earning more than $150,000 per year. The lowest 60 percent of income earners will receive just $25.2 billion over the decade.

As Greg Jericho, chief economist at the Australia Institute, writes, “Almost half of the total benefits go to the richest 3% and so massive are the costs at $300bn over 9 years, that you could raise Jobseeker from its current rate of $693 a fortnight to $1,925 and you would still end up with a smaller government deficit in 2032-33 than you would with the Stage 3 tax cuts”.

Despite this, and the cost-of-living crisis facing millions of people, the Stage 3 tax cuts did not even rate a mention at the Labor Party’s recent national conference, where the so-called “left” of the party held a majority of delegates. Along with backing in the $368 billion spend for nuclear submarines as part of the AUKUS pact, the conference made clear the priorities of the ALP.

Labor’s pledge to guarantee just $500 million per year to stimulate new housing as part of its Housing Affordability Future Fund, for example, comes to a price tag of only 1.6 percent of what the Stage 3 tax cuts will cost. On top of this, we could add the $24.4 billion the government spent last year alone on negative gearing tax concessions, and the $23.7 billion in capital gains tax discounts, much of which ends up in the pockets of wealthy property investors.

The scrapping of the low-middle income tax offset, which was worth up to $1,500 for people earning up to $90,000, means that workers on average wages and below will actually be paying more tax in the coming years. Someone on the current median income of $65,000 will pay $1,000 more in tax in 2024-25. So, while the richest, including CEOs, politicians and surgeons, will receive an extra $9,075 per year, many nurses, teachers, secretaries, aged-care and hospitality workers (and most others) will be paying more. 

All this comes in the context of wage rises that are far below inflation, and soaring prices for basic necessities. At a time when workers’ living standards are sliding backwards, the Labor government is taking money from their pockets to give to the rich.