The double edged sword: tax cut politics and the 2007 federal election campaign

Given the political success of the Howard government's approach to tax and fiscal policy in recent years it was not surprising that the Coalition persisted with its winning formula in the 2007 federal election campaign. Yet this article argues that by 2007 the Coalition's established brand of tax cut politics was economically inappropriate and politically counterproductive. Perhaps the most decisive moment of the 2007 election campaign was Kevin Rudd's campaign launch proclamation that he 'had no intention today of repeating Mr Howard's irresponsible spending spree'. This was significant because it represented a symbolic end to the pork barrel politics which had dominated the campaign to that point. This strategic policy shift allowed Rudd to portray himself as being a disciplined financial manager prioritising economic sustainability over electoral opportunism. So while the 2007 election campaign was devoid of significant tax policy reforms the ALP's preparedness to exercise marginally greater fiscal restraint was decisive.