In 1990, American President George H. W. Bush agreed to new taxes after famously promising during his election campaign that there would be no new taxes during his term as president, a promise he asked voters to “read his lips” for and one that he summarily broke. In Australia, a similar situation has arisen in which Prime Minister Tony Abbott is poised to break his election promise on no new taxes. More than 20 years ago, Bush’s broken promise ruined his hopes of re-election, but has earned him the 2014 Profile in Courage Award due to the fact that he did what was best for the country instead of only looking out for his own political good. The example of that kind of leadership may be from the last century, but it could be instructive for world leaders today, and not just in the United States but worldwide, including Australia. The similarities between the two men are certainly there, but there is only one problem with drawing a direct comparison between them: Tony Abbott is no George H. W. Bush.
President Bush senior ran on the concept of not increasing taxes. As a fiscal conservative, his Republican belief was that raising taxes put a strain on the economy and prevented job growth. To truly improve the American economic situation, he thought that keeping tax cuts low was the best policy and that belief got him elected. Once in office, however, he faced a Democratic Congress that refused to pass a budget without a compromise on taxes. This left the elder Bush with a dilemma between breaking his election promise and the possibility of a government shutdown.
The decision to raise taxes as part of a compromise with Democratic leaders in Congress was a difficult decision and one that the senior Bush president knew would cause him political trouble. But admirably, he made the decision. Instead of shutting down the government for an ideologically motivated ideal, he faced the reality of having to work with others to get the job of governance done. No matter what side of the aisle someone may be on politically, that kind of willingness to deny personal aspirations in order to do a job is an admirable quality. Fittingly, that selflessness was honored by the John F. Kennedy Library and Museum when it gave George H. W. Bush the Profiles in Courage Award.
Two decades ago, Bush made a hard decision that cost him politically. Fast forwarding to the present day and switching continents, a similar situation is occurring in Australian politics. Or at least, that is what Prime Minister Tony Abbott would like people to believe. Obvious parallels can be drawn between the two men. They are both fiscal conservatives who ran their election campaigns on the promise of not raising taxes. Once elected, both men found a budget impossible to achieve without tax increases and they both apparently decided to violate their promises in order to get the job done. Nevertheless, while one man showed courage in the face of opposition, the other faces just the opposite sort of opposition to his tax hike.
Tony Abbott is currently facing opposition in government, not to a budget that keeps taxes low, but to his proposed increase to taxes, which he has termed a deficit levy. Abbott does not face a Democratic Congress. Unlike the American situation 20 years ago, the new tax and subsequent violation of campaign promises is entirely self-inflicted. The prime minister, then, had an opportunity to do what Bush would have liked to do: pass a budget with no new taxes. Instead, he has voluntarily proposed a tax increase that will disproportionately affect workers and the middle class in Australia.
If the Aussie politician knew the history of George H. W. Bush, he may have made a different decision on his “deficit levy.” The Omnibus Budget Reconciliation Act of 1990 that he signed in to law included tax cuts for the middle class and reduced taxes for the poor. Those key groups did not shoulder most of the burden of the new taxes. Instead, “luxury items” saw new taxes. Things that only the richest members of society would be purchasing, like a brand new yacht, had new taxes associated with them. According to the announcement of the act, these new taxes which only affected higher income taxpayers accounted for 28 percent of the revenue intended to reduce the deficit of the time. In addition, certain types of spending would be reduced that would also reduce the deficit, including caps on domestic and international spending and reductions in defense spending, and social security was taken off the table as far as changes went. Overall, the point of the act was to both reduce spending and prevent the middle class and other vulnerable parties from being overtaxed or affected to the point that they would have trouble surviving day-to-day.
With his new taxes, however, Tony Abbott has shown that he is not like George H. W. Bush and has proceeded to do the exact opposite. A month ago, the prime minister announced the purchase of new fighter jets from the American company Lockheed Martin at a price of $14 billion, making it the largest defense purchase the country has ever made. In addition, he has proposed a paid parental leave scheme aimed at individuals who make over $100,000 a year and will provide them up to $50,000 in paid leave after the birth of a child. Both of these measures represent an increase in spending while the age to receive a pension is going to increase from 65 years to 70 years of age. Unlike Bush, then, Abbott has gone in the opposite direction with his proposed budget.
Despite the similarities in situation, Abbott and Bush senior are two very different leaders. But Tony Abbott has proceeded to paint himself in the same light that Herbert Walker Bush was seen in by the givers of the Profiles in Courage Award. The Australian has repeatedly pointed to the difficulties of decision-making in government, pointing out that no one wants to make the hard decisions but that they must be made. In addition, he argued that voters will ultimately be thankful for the rise in taxes and spending that have occurred under his leadership. Unfortunately for him, it is unlikely that he will receive any awards for a self-inflicted political head wound and breaking promises that could easily have been kept.
Instead, it is more likely that Abbott will meet the same re-election fate that President Bush senior did when he lost to Democratic candidate Bill Clinton. Voters see promises as a measure of credibility. Breaking his promise in the early 1990s injured his credibility, but in the end it has been acknowledged that the former president did what was best for his country, not himself. Abbott, however, is swiftly losing his credibility and no one seems set to ever see him as a brave compromiser. According to polls, if an election were held today, Australian voters would not support Abbott or his party with their votes. In the next election, he might meet the same fate that his american counterpart did, but Tony Abbott is no George H. W. Bush and a lost election might be more well deserved in his case.
Opinion By Lydia Webb