Labor sees this populist wave as a threat and is going for policy boldness in response.<\/p>\n
For Taylor, the stakes are much higher. The populist wave is already crashing on the Liberal Party. He needs something radical.<\/p>\n
‘We aren’t standing still’<\/p>\n
Treasurer Jim Chalmers made the political intent of his fifth budget clear yesterday.<\/p>\n
“When you look around the world from Farage to Farrer, we are the last ones standing in the sensible centre of politics, but we aren’t standing still,” the Treasurer told the National Press Club.<\/p>\n
It was a revealing and deliberate comment, written into the set-piece post-budget speech.<\/p>\n
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What’s happening in the UK is being watched closely here. The rise and rise of Nigel Farage’s populist Reform Party and the crumbling support for Prime Minister Sir Keir Starmer have grabbed Labor’s attention.<\/p>\n
More than one senior government figure has identified what they see as Sir Keir’s big problem. He’s “doing nothing”.<\/p>\n
The Albanese government is determined to avoid falling into that trap.<\/p>\n
The assault on negative gearing, capital gains tax and trusts in this budget aims to show this government is willing to do something bold. Even if it means breaking a promise and upsetting investors.<\/p>\n
LoadingLabor telegraphs what is to come<\/p>\n
The tax haul will reap about $100 billion from asset owners over the coming decade. Only a relatively small amount is being returned to workers. At this stage.<\/p>\n
Chalmers is making no secret the $250 annual tax offset he announced for wage earners is only a “down payment”. He now has the firepower to offer a much bigger sweetener before 2028.<\/p>\n
Unlike the surprise tax cut announced in the budget before last year’s election, Labor is telegraphing what’s coming. It wants voters to know there’s more tax relief to come.<\/p>\n
And it knows the Coalition cannot repeat last year’s mistake of opposing a tax cut. The opposition would have to find a way to match whatever further sweetener Labor offers workers before the next election.<\/p>\n
That means either accepting it must keep the higher taxes for investors in place or identifying big spending cuts elsewhere. Neither is a great option.<\/p>\n
For now, Taylor is keeping the focus on the big broken promise.<\/p>\n
Anthony Albanese and Chalmers are yet to give a convincing explanation as to how exactly “circumstances changed” since the prime minister flatly told voters at the election that he would not touch negative gearing or capital gains tax.<\/p>\n
Everyone in Labor knows this creates a credibility problem. Whether it’s short-lived awkwardness or a longer-term problem of broken trust is unknown.<\/p>\n
But there’s also broad agreement across the caucus this was still a promise worth breaking, for the sake of doing the right thing for younger workers and for Labor’s own electoral survival.<\/p>\n
If the opposition is still pursuing Albanese’s credibility by the time of the next election, older Labor hands are ready to dust off John Howard’s 2004 election strategy.<\/p>\n
Back then, Howard successfully flipped Labor’s line of attack on his credibility, with the powerful question, “who do you trust?”\u00a0<\/p>\n
It re-framed the campaign to a bigger question of judgement and worked a treat.<\/p>\n
![\"Federal](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/05\/37b3f036f65595be74604116150d5725.jpeg\")
<\/p>\n
Tonight, the spotlight will be on Angus Taylor’s budget reply. (ABC News: Keane Bourke)<\/p>\n
The opposition’s turn<\/p>\n
Tonight, the spotlight will be on Taylor’s budget reply.<\/p>\n
The Liberal Party’s by-election humiliation in Farrer over the weekend has piled even more pressure on the opposition leader to come up with something bold tonight.<\/p>\n
Three months after replacing Sussan Ley on the grounds the Liberals had to “change or die”, this will be a test of whether Taylor really can revive the party.<\/p>\n
His pitch will echo One Nation’s focus on tackling what he calls “mass migration”.<\/p>\n
“Australia should only bring in as many people as it can house,” he will say. Taylor will promise to cap Net Overseas Migration at the number of new homes completed each year. How this cap might be enforced, and which migration streams would be restricted, remains unclear.<\/p>\n
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The opposition leader will also re-commit to a $5 billion housing infrastructure fund promised by Peter Dutton.<\/p>\n
Coalition figures are also hinting at a permanent fix to bracket creep, by promising to index tax thresholds to inflation, an idea Dutton floated as an “aspirational” aim in the desperate dying days of last year’s election campaign.<\/p>\n
That would be a big idea, and would grab the attention of younger workers, who are constantly pushed into higher tax brackets by inflation.<\/p>\n
But ending this “fiscal drag” by indexing tax brackets is also enormously expensive.<\/p>\n
Then prime minister Malcolm Fraser tried it back in the 1970s, and it didn’t last long. He had to unwind indexation as budget deficits escalated. His treasurer, John Howard, admitted he had “never been an enthusiast about tax indexation”.<\/p>\n
Still, these are desperate times for Taylor and the Liberal Party.<\/p>\n
If Labor felt the need to be bold given the shifting political landscape “from Farage to Farrer”, the Coalition arguably needs to be far bolder.<\/p>\n
David Speers is\u00a0national political lead and\u00a0host of Insiders, which airs on ABC TV at 9am on Sunday or on iview.<\/p>\n
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