Will the Coalition offer tax cuts during the campaign?

According to media reports, the Coalition has announced nearly $10 billion in new spending since the May Budget. But will it announce tax cuts during the campaign?

The political case for doing so is strong. The ACNielsen poll on Monday added to the accumulating evidence that tax cuts are heading back into favour. 51% of voters thought that tax cuts should be offered in the campaign, while 41% thought that they should not.

While that is only a small majority in favour, the proportion of potential Liberal voters interested in a tax cut is likely to be much higher. The 2004 Australian Election Survey found that Liberal voters were significantly more likely than Labor voters to prefer tax cuts to more services, and to rate tax as an ‘extremely important’ issue.

It is also an issue on which – consistent with the history of party stereotypes being resistant to contrary empirical evidence – the Liberals remain credible. In both the Newspoll and AES time series Labor is almost always well behind as the party better able to handle (Newspoll) or closest to the respondent’s view (AES) on tax. (Labor last drew even in the Newspoll series in January 1998.)

True, it is unlikely to save the Coalition from a big defeat. But it might help stave off electoral catastrophe. And if Labor keeps matching Coalition promises, it will at least deliver the Liberal constituency something, win or lose on election day.