Australian Federal Politics: Budget Fallout, Tax Debates, and Existential Risks

Welcome back to your weekly federal politics update, where Courtney Gould gets you up to speed on the happenings from Parliament House.

For a group of people who declared they were prepared to tackle a post-budget scare campaign, the government has looked anything but in control this week.

The prime minister and treasurer split off on their cross-country roadshow. There were newly built apartment buildings to visit to remind people that the changes to negative gearing and the capital gains tax were about making housing affordable.

But, that message had already run away from them. The problem, according to the papers and other critics, was everything else: shares, start-ups, and small business.

The chief concern was that the removal of the 50 per cent discount in favour of of taxing profits, except the portion caused by inflation, would act as a disincentive for investment.

Those concerns were only inflated by the creation of an AI-generated meme that dubiously suggested Anthony Albanese would become a 47 per cent silent partner in their businesses as a result. The creator later told the ABC not all businesses would pay 47 per cent tax when they sell up.

But that nuance was lost, as it often is, in the meme-scape. And as the pile on online grew, so did Albanese and Treasurer Jim Chalmers’ frustration.

They repeated over and over that the budget books themselves said more consultation was required when it came to start-ups. As was the promise that exemptions and concessions for small businesses currently in place would remain so.

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Independent Allegra Spender – who spent years developing her own vision of tax reform – also acknowledged she underestimated the impact.

But in typical Albanese fashion he dislikes giving into pressure and wants to pass reforms before parliament rises for the winter break.

He views the noise as campaigns being run from "the right-wing parties and their allies" to distort what is in the budget. Chalmers described it as the government's opponents "engaging the usual scare campaigns on lies".

On the other side of the coin, the debate on tax hasn't just been ring-fenced to capital gains. The government is also getting pummelled by the campaign for higher taxes on the gas industry.

Pick any of the prime minister's latest Instagram posts and you’ll find it flooded with demands to "tax gas now". South Australian Premier Peter Malinauskas told a gathering of industry executives at the Australian Energy Producers conference in his state that the issue had cut through.

It was being raised with him at the local footy. Chalmers also said he's had people raise it with him IRL too. But the focus, at the moment, is on the gas reservation.

After four years of handing down relatively safe budgets that created more winners than losers, Labor finally put a target on its back.

Coalition misses a trick

And what a bullseye it should have been for the Coalition. It says a lot that the most effective campaigns against the budget didn’t come from the opposition.

Angus Taylor used his post-budget reply last week to confirm he wants income tax brackets indexed to inflation. It would start with the first two brackets, before moving on to the higher cost end of scale.

It should have been all he talked about as he visited young couples' homes and small businesses and start-ups concerned about the budget's impact on them.

After a year of not having anything to say beyond net zero and migration (with a leadership contest thrown in for funsies) the Coalition finally had a concrete policy to go out and sell.

But the inclusion of a plan to tie migration to housing and cut permanent residents' access to 17 welfare programs opened up a door for other questions. As did him declaring he would tinker with the Sex Discrimination Act to define biological sex.

In other words, he shifted focus from his own signature tax policy. This was an immediate reminder to voters put off at the last election by Peter Dutton’s culture wars that the Coalition hadn’t strayed too far.

His view may be that using the term “mass-migration” and weighing on transgender rights is part of the path to win back votes who left the Coalition for One Nation. But with an opening right in front of him on tax, why would he not take it?

Shadow Treasurer Tim Wilson’s post-budget address avoided the topics of migration and gender. He’d rather be focused on the aspiration of the small business owners who created the anti-Albanese memes.

In his 30-minute address, the opposition’s tax policy only ranked one mention. He defended that decision, saying the Coalition will “absolutely continue to sell this policy all the way through to the next election”. But for now he's sticking with trying to win back the small business owners.

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Meanwhile, a minister's uplifting message

If you need a post-budget boost, look no further than the cheery perspective of assistant treasury minister Andrew Leigh who reminded us it could be worse.

You know, just like the end of humanity.

He argued in a speech the newspapers headlined as an "An economist’s plan to fight the zombie apocalypse" that the risks of a mass-extinction event are rising, and we’re bringing it upon ourselves, say with nuclear war fare, climate change and advanced artificial intelligence.

“Modern economies may be systematically better at generating dangerous capabilities than at building the safeguards needed to control them,” he will say.

“Technological progress raises productivity, but it also expands the set of ways in which humanity can do irreparable harm to itself. The same engine that delivers prosperity may, at advanced stages, increase fragility.”

Yikes.

But hey if you're looking for a silver lining, at least a zombie apocalypse would be good for first home buyers.