The truth hurts, which is why it will be painful for Anthony Albanese to come clean with Australians about how wrong it would be to spend $240 billion on tax cuts, the bulk of which will go to very high-income earners, mainly older men.

Breaking promises is never easy, but keeping the wrong promises is just as painful. If Labor sticks to Scott Morrison’s stage three tax cuts, in the lead-up to the next election it will find itself with the excruciating task of explaining to voters why handing $9000 a year to those earning over $200,000 is more important than helping low and middle-income earners struggling with falling real wages, rising mortgage payments and expensive essential services.

Keeping Morrison’s 2018 tax promise isn’t just a gift to the highest income Australians, it’s a gift to the Liberal Party, which has already made clear its intention to campaign in Labor’s outer suburban seats rather than try to win back the high-income seats it lost to the teals and the Greens. When then-treasurer Morrison announced the largest tax cuts in history, his budget speech made no mention of the enormous cost of his “tax plan” – but he did falsely assure the parliament, “This is what can be responsibly afforded, while keeping the budget on track.”

The budget isn’t on track, it’s off road. In 2018, Morrison predicted the budget would be in surplus from 2019 onwards and that, in 2022, federal government net debt would be $319 billion. It’s actually $714 billion. But it’s not just public debt that’s way off Morrison’s promised path. In 2018, Treasury was forecasting strong wage growth and low inflation as well, and in the lead-up to the last election, and Labor’s commitment to keep the stage three tax cuts, the RBA governor made clear he wouldn’t increase interest rates until wages grew strongly. That promise has been broken four times this year.

Good economic management isn’t a political slogan, it’s a daily task. Just as those steering a ship should veer off course when an iceberg appears on the horizon, all those aspiring to be “good economic managers” should beware the siren song of making long-run promises based on long-run forecasts. Responsible economic managers don’t make, or keep, irresponsible long-run promises.

But now that a bi-partisan bidding war has landed Labor with the wrong tax policy for an inflationary economy bursting with a shortage of teachers, nurses and aged care workers who all deserve a pay rise, how can Anthony Albanese avoid the economic and political pain of staying on the wrong course?

Step one is to highlight how radically different today’s economy is from the one that the forecasters assumed it would be. Surging consumer prices, falling real wages and repayments on a $700,000 mortgage jumping $740 per month weren’t just missing from Morrison’s 2018 budget, they weren’t even imagined in Josh Frydenberg’s budget from early this year.

Step two is to start an “honest conversation” about whether Australians would prefer the tax cuts designed by Morrison in 2018 to be delivered in full to the top 5 per cent of taxpayers, or whether they could be better and more broadly shared around. That bit shouldn’t be too hard. The PM needs to stop asking if it’s better to keep promises or not and start asking what priorities matter to Australians in 2022.

While it’s best to avoid making promises you might not be able to keep, the next best strategy is to be upfront about a core principle of responsible economic management: when the economic facts change, so too must economic policy.

After three years of Scott Morrison’s secrecy, no one wants another prime minister who can’t be trusted. But admitting to errors and consulting with people on how to fix them can build trust, not break it.

Australia is one of the richest countries in the world. Unemployment is at record lows and the world is paying record prices for our commodities. We can afford to do almost anything we want, but we can’t afford to do everything we want. Redesigning the stage three tax cuts so that they help low and middle-income earners cope with the rising cost of living will not just help reduce inequity, it will reduce the pressure on employers to boost wages for those same workers. It’s the after-tax wage rates that encourage labour supply.

Back before COVID, I promised to meet some of my oldest school friends for a long-overdue beer, a promise I reluctantly had to break. Breaking a promise doesn’t have to destroy trust, and keeping to the wrong promises when the facts change can actually destroy it. It’s nearly two years before the Stage three tax cuts are due to deliver huge windfalls to Australia’s highest income earners. Anthony Albanese has got plenty of time to start an honest conversation with Australians to see if that’s what they still really want.

Dr. Richard Denniss is the new Executive Director of the Australia Institute, based in Canberra. Twitter: @RDNS_TAI