TONY Abbott and Joe Hockey have an enormous task. Australia has recorded six straight Budget deficits and they want to stop that run.

Our debt is way too high. I know the feeling. In 1996 we had six straight deficits before the Keating Labor government was turfed out of ­office. Back then our debt was higher, as a proportion of the economy, than it is now.

Back then the Budget had been smashed by a recession. This time it was smashed during a mining boom.

Australia has a spending problem. Labor geared up spending to stimulate the economy and never stopped. The public understands. They know spending has to be cut.

Last week the government floated the idea of raising tax as a way of “sharing the pain” so everyone would shoulder the burden of fixing the Budget.

It is important to note this is a political argument. The proposed tax “levy” has no economic benefit. It will detract from growth by reducing consumption. It will produce no interest rate reduction and, if it lasts four years and raises $10 billion, the most it could save would be $400 million in annual interest — hardly enough to touch the sides of the annual $12 billion government financing requirement.

The Commission of Audit did not recommend a “deficit levy”. It looked at funding of government services over the longer term by cutting spending. In fact the commission (rightly) said the government should budget to return the tax it is going to collect as taxpayers are pushed into higher brackets on the current tax rates. It did not recommend increasing those rates, either permanently or on a “temporary” basis.

The argument for increasing income taxes through some kind of levy is all about the politics. That’s why it was floated — to gauge reaction.

If the government had ­irrevocably decided to do it, it would have just announced it in the Budget scheduled for next Tuesday night.

I think there has been enough reaction now for the government to conclude that, far from making it easier to sell repairs to the Budget, the levy would make things harder.

It would open up much worse lines of attack on the Coalition and the Prime Minister.

If the government put such a levy in place then, long after this Budget has been forgotten, the press and the opposition would still be attacking the Prime Minister’s credibility.

And attacks over tax promises can be devastatingly effective — just ask Julia (There will be no carbon tax under a government I lead) Gillard, or Paul (L-A-W tax cuts) Keating.

The Budget will be put to bed on the weekend. Tax proposals are regularly put in and pulled out in the last week ­before a Budget.

Proposals can be changed or dropped altogether. The Prime Minister and Treasurer have cabinet authorisation to do that.

Now the proposed levy is being scaled back. Floating the idea has brought as much benefit as it could. It demonstrated how bad things are and the kinds of measures that will be needed if steps are not taken to cut spending now.

It has reminded ministers what will happen if they don’t co-operate and cut spending. It has had its “scare value”.

What more can be accomplished? If Labor and the Greens vote against it and Senator Day (Family First) and Senator Leyonhjelm (Liberal Democrat) are against it, it will not go through the Senate ­unless the Palmer United Party (PUP) votes for it. PUP will only vote for it if it can create maximum damage to its No. 1 political enemy — the Coalition.

The Liberal Party could be caught campaigning for a tax rise that will never be law. All on the grounds it has to be seen to do something to the middle and upper-middle wage earners who voted for it.

When Labor was handing out money to “stimulate” the economy with pension bonuses, tax bonuses and back-to-school bonuses, they weren’t going to these people.

They just kept working and paying their taxes and hoping for a better government.

Very few would have expected a Coalition government to propose higher income taxes than Labor ever did.

In 1996 I announced a surcharge on superannuation for higher income earners.

The surcharge was one of the worst things I ever did.

Labor voted against introducing it. When I finally abolished it (nine years later), they voted against that too.

Do you know what happened when Labor got into government? They reintroduced that surcharge.

That’s the thing about bad precedents. Anybody can take them up and it’s very hard to complain when they do.

If it is acceptable for an ­incoming government to increase higher marginal income tax rates, don’t think this will be the last government to try it.

Peter Costello is a former treasurer and chairman of the Future Fund