House prices are in decline. Is there a reason for the Albanese government to flat-out break a promise?

I’m not sure I can recall any government getting away with what the Albanese government this week confirmed it will attempt. We now know the upcoming budget will include changes to negative gearing and capital gains tax concessions. We also know that, whatever the details end up being, this flatly breaks a pre-election promise to leave these concessions untouched. That means the government is about to undertake a sizeable, controversial reform, for which it has no mandate.

This is not like Labor’s 2024 amendments to the Morrison government’s stage 3 tax cuts. Yes, that was also a flat-out broken promise. And it’s emphatically true that broken promise didn’t hurt the Albanese government, which was returned last year with such a thumping majority that its repercussions are threatening to upend the two-party system. But that policy tweaked a tax cut that was not yet in force. By the time the amended package became real, every taxpayer experienced it as a tax cut. For the highest earners, it was a lesser cut than they had originally been promised, but it was a tax cut nonetheless. No one experienced it as a tax hike. The most this proves is that you can get away with a broken promise as long as it generates no losers.

That’s probably why Treasurer Jim Chalmers is saying any changes won’t raise “a heap of revenue” in the next few years, and that there will be “transitional matters” to soften the blow to current investors. But Labor’s 2019 policy, which would have grandfathered such tax changes so current investors would be unaffected, still struck plenty of voters as inflicting a loss. It’s hard to imagine they won’t see themselves as losers this time, especially after a lacerating campaign from the opposition. The government, then, is trying to land a broken promise that generates losers. That’s something more akin to the Gillard government’s carbon tax, or even the Abbott government’s horror 2014 budget that broke too many promises to mention. If it can do this, it will have demonstrated just how much politics has changed.

On that score, we know two things: politics has changed a great deal, and that these changes all favour the government’s gamble. Even the most superficial political change – that Labor now enjoys a heroically dominant parliamentary position while the Coalition is in disarray – is hugely consequential. That majority might just be too large for even a breach of trust to break. The opposition will no doubt hope the coming fight on property investment tax breaks will bring it roaring back in the suburbs; that it can successfully frame Labor’s policy as an assault on aspiration, and reclaim its 2019 constituency. But that only raises the deeper political shift that has the Coalition ensnared.

The electorate no longer has the hallmarks of being an aspirational. Aspiration requires faith in the system that underwrites people’s dreams, and it is that very system which is now in question. That’s not a matter of this or that policy. It’s a matter of disposition. The Coalition’s collapse in the cities and One Nation’s rise represents a politics of disillusionment. Beyond our borders is a war, waged by our closest ally, unleashing a chaos we cannot control, but for which we have no choice but to pay. Such moments leave us in no mood for aspiration.

The Albanese government is surely banking on this mood. The economic case for negative gearing and capital gains tax reform is no stronger now than it was before last year’s election. House prices are now falling in Melbourne and Sydney. If the impending changes won’t raise much money in the short term, it follows they won’t seriously affect house prices, either. If this is good policy, it was arguably better policy a year ago, and the year before that. And if it’s policy for the long term, there’s no reason it couldn’t have been delivered after taking it to an election and earning a mandate, exactly as John Howard did with the GST in 1998.

But this promise is not being broken as an urgent response to radically changed economic circumstance. It is a response to radically changed political circumstance. The treasurer acknowledges the forthcoming changes are about sending a message to younger voters that the government cares about what it calls “intergenerational equity”. That makes these changes symbolic, at least at first. The government’s calculation must be that the upheaval of the moment resets things so that all things are on the table, and that voters have little interest in what was said before the election. That is, the symbolism of addressing negative gearing and capital gains tax is more potent than the symbolism of a broken promise.

If that turns out to be true, it will be no small thing. Broken promises really should matter. Democracies rely on the consent of voters. If that consent is given on false pretences, it is not consent at all. If we decide this is simply irrelevant – if we declare parties are free to hoodwink their way to power – democracy’s foundations must eventually collapse under the weight of a chronic lack of trust. From there, politics easily devolves to something even worse than endless scare campaigning. It becomes endless phantom campaigns, where parties campaign against policies their opponents aren’t even proposing.

How lamentable, then, if intergenerational inequity has gotten so serious that it erodes trust even more than that. How precarious if the method of restoring that trust is to break your word, licensing voters to doubt what you say. And how damning if it has reached such a point, when the cliff of intergenerational inequity has been coming so clearly for so long yet could only be addressed in an atmosphere of crisis.

Waleed Aly is a broadcaster, author, academic and regular columnist for The Age and The Sydney Morning Herald.

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