The stage three tax cuts are a pile of garbage, and everybody knows it | Greg Jericho

We know the prime minister and the treasurer, Jim Chalmers, think the cuts are bad policy because they told us as much when they were in opposition.

That is not a defence of policy, it is an excuse for inaction.

Anthony Albanese could learn a thing or two from him.

Because, as in 1983, things have changed.

The RBA predicted inflation would peak at 3.75%, not 7.8%, and it forecast GDP growth slowing to 2% by June 2024, not 1.8%, and certainly not 1.7% by December 2024 as it does now.

The PBO also provided ample evidence to remind us how terrible the tax cuts were from the get-go.

The stage-three cuts reduce the marginal tax rate faced by the $45,000 to $200,000 tax bracket to 30%. By 2032-33 in total this will have cost $243.5bn and reached $36.9bn a year.

And who gets that money? The PBO estimates in 2024-25 the top 1% of income earners will receive the same total benefit as will the bottom 65%.

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Because women earn less than men, the PBO estimates that in the first 9 years men will receive about 65% of the total benefit.

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For example, a primary school teacher who earned $74,012 in 2019-20 will earn $180,000 in 2050 (if they are able to secure an annual wage growth of 3% in that time).

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Someone on $45,000, can look forward to getting most of the benefit of the tax cuts in 2070 (best not to spend it just yet).

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But of course, both he and Chalmers were right in 2019. There is a massive link.

In 2024-25, $12.7bn of the $17.7bn cost of the tax cuts will go to those earning above $120,000. That is almost the same amount expected to be spent on Jobseeker payments that year.

While $120,000 is nearly four times the poverty line, the current level of Jobseeker is almost $300 a week below it:

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The relative level of unemployment benefits is as low now as it has been in the past 50 years:

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More than enough has changed in the economy since the election to justify dumping the tax cuts. But they should never have been agreed to in the first place. They are an anathema to the aims of any progressive political party and will leave the nation with fewer resources to help those who truly need it.