EDITORIAL: Backflip shows how shocker of a Budget is deeply flawed

A phrase used by political leaders under pressure when they relent and make policy changes is to say they are scraping off the barnacles.

Well if Prime Minister Anthony Albanese and his sidekick Jim Chalmers think the Budget backflip announced on Thursday does the job they need to think again.

Put simply, they need a bigger scraper. The Budget is, to use that most Australian of terms, a shocker.

And after weeks of deflecting, denying and defending by the Albanese Government — and more than a few desperate attacks on those who pointed out the obvious flaws — the changes are a monumental confession that they got it wrong all along.

This was supposed to be defining tax reform, the biggest moment in the so-far less-than remarkable history of the Albanese Government.

But through its back-to-front process the Budget of broken promises was actually a lesson in how not to go about major change.

As a reminder, the changes to capital gains tax and negative gearing had been regularly ruled out by the Prime Minister before he was returned at the election held in May last year.

After the Budget landed with a thud Mr Albanese and Dr Chalmers were initially unmoved.

It was at first a nothing-to-see here approach. The legislation would go into Parliament and the some of the details worked out later.

A second tranche of legislation down the track would deal with the “implementation” and “details”.

“The core elements will be in the legislation . . . and then what we will have is legislation with the implementation and details. I mean, that is the normal process that occurs with tax policy,” Mr Albanese argued.

As to concerns about ministerial discretions embedded in the tax legislation, Dr Chalmers said the fears were a “beat-up”.

Opposition to a minimum 30 per cent tax on payouts from discretionary testamentary trusts, which are established in people’s wills —that opponents had labelled a “death tax” — gave rise to Government accusations they were used for tax avoidance.

Then there were references to scare campaigns and “a lot of lies”. It got very ugly.

Finally, after weeks of political pain, came the backdowns.

Incredibly, on Thursday Dr Chalmers said key changes would cost the Budget an estimated $475 million over the next four years.

“To put that into context, the negative gearing, capital gains and trust changes are expected to raise about $8.1b over the course of the forward estimates,” the treasurer said.

Here comes the real story. This was not so much about policy. It was a tax grab.

The inadequacy of the changes was made clear by some of the reaction, even from Labor’s side, with WA Treasurer Rita Saffioti arguing more was needed to safeguard the mining exploration sector, which she described as “the original start-up”.

This will not be the end of the issues which continue to be raised about a Budget document which is disintegrating into a patchwork of problems.

The Government has tried to cover over the piecemeal changes by claiming they showed it was listening.

Perhaps they should have listened before rolling out this mess.

Responsibility for the editorial comment is taken by Editor-in-Chief Christopher Dore