A shift on stage-three tax cuts would move the first Albanese budget from B for boring to B for big | Kathrine Murphy

The new British prime minister Liz Truss has been rolled by colleagues unprepared to support a fiscally profligate, market-spooking, trickle-down package that would have abolished the 45% top rate of income tax. The United States looks to be heading for a recession.

The reason for this is simple. Another economic storm is brewing. At the moment, the third major global economic downturn in 12 years looks more probable than possible, and that has implications for Australia.

The rebalancing of the language was evident in television interviews Chalmers did last Thursday and on Sunday.

Before we examine what Chalmers has been saying, a quick recap for people who have missed the whole stage-three debate. These tax cuts are already legislated, and due to come into effect in July 2024. The changes create a 30% flat tax rate for anyone earning between $45,000 and $200,000. Flattening the tax scales costs the budget $244bn over 10 years.

We saw this policy logic play out in Britain spectacularly over the past 24 hours. The original UK mini-budget proposal scrapped the 45% top tier tax rate for those earning more than £150,000 a year, and lowered it to 40% for everyone earning more than £50,270 on the argument cutting tax would be growth enhancing.

The supreme ineptitude of Truss and her chancellor has now handed Labor a very useful precedent. But amending our own stage-three package would fly in the face of what Labor said about those tax cuts prior to the May election.

But the treasurer said several other things as well that are relevant in this context.

Whether the reposition happens in this coming budget is for now an open question. When Labor considered the stage-three package back in opposition, there was an attempt at that time to adopt a position of maintaining the Morrison tax cut for workers earning below $180,000 while imposing a higher, deficit levy-style tax rate for people earning above that. But that attempt was ultimately overruled by a shadow cabinet decision that was more about pre-election politics than about medium-term budgetary prudence.

Labor absolutely understands that any broken promise will be weaponised by its political opponents, although making the case to blow a hole in the tax base in an economic slowdown may not prove a winning pitch.

But apart from anything Peter Dutton may have to say about it, revising stage three could be disconcerting for voters who supported a change of government on 21 May because Anthony Albanese ran a small target, safe option, pitch.

The message is simple: this package was legislated in a different economic and budgetary context. When circumstances change, smart people change their minds.