The modern Liberal MP Tim Wilson gripped a copy of Milton Friedman’s Capitalism and Freedom as he affirmed his allegiance to the Queen before the new parliament this week.

There could not have been a clearer, more brightly-lit warning to Labor as to what defined the newly-reconstituted government they now faced, and what the tax cut debate was really about. Alas, those bright lights went unnoticed, or unheeded.

Observe: politicians either make their affirmation unencumbered by a text, or swear an oath on a holy book. Wilson’s choice to elevate Friedman’s libertarian-conservative “free market” polemic to the status of religious text defines the neoliberal zealotry of the modern Liberal party.

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In Capitalism and Freedom, Friedman makes a case against medical licensing, denounced as a market obstruction. The logic goes that if doctors mutilate or kill people, the appropriate punishment is fewer paying customers.

In the very same tome, he demands replacing progressive taxation with a flat tax on income. Friedman is unbothered by the reduction in revenue to fund the business of government – for Wilson’s guru, the role of government is but to provide defence and protect private property.

Surprise! That’s the overt and covert basis of what the Coalition just legislated! By flattening the tax rate, the government is not merely gifting more treats to those on an annual salary of $200k plus. It is gouging $40bn a year from the commonwealth’s capacity to spend on those trivial things – pensions, schools, hospitals, housing, roads, action against impending environmental catastrophe – that citizens imagine are state obligations but which Friedman and acolytes consider distractions.

Not fighting the tax cuts on a jobs message was a staggering squib

The AFR was delightfully unadorned in its assessment. “The Morrison government – and potentially future governments,” it wrote “will need to exhibit spending discipline to afford the tax cuts and avoid driving the budget into a sustained deficit”.

Dear Australian Labor party; the impacts aren’t just cut services and crumbling buildings. They’re mass layoffs. Opportunities for governments to create jobs in the future will be sacrificed on the neoliberal altar.

The Morrison government insists the tax cuts will stimulate our slowing economy from the per capita recession we entered three financial quarters ago and – now that the election is over – they finally admit exists.

Ah, yes – “from the prophets, deserts come”. What the Liberals won’t admit, of course, is that the crisis of low wages, underemployment and poor economic growth underneath that slowdown results precisely from all these years of their own Friedmanesque policies. For six years, they’ve cut services, sacked public servants, capped and cut wages, stomped on unions and wage demands … The problems get worse. Their remedy? To apply more of the problem!

It’s actually the remaining government investments – such as state government infrastructure spending – that have been propping up struggling growth figures and a poorly performing employment market. The promise to workers of tax cuts improving their prospects has already proven empty in America.

But zealots do not truck in facts. Instead, they evangelise their beliefs with such conviction they inveigle others into their fantasies. Repeating the government’s “stimulus” mantra, independent senator Jacqui Lambie voted up tax cuts to get modest social housing investment in Tasmania. The $157m for life-changing housing represents 0.1% of the potential spend the senator has traded away from everyone else.

Like Labor, Lambie did not have enthusiasm for the “third tranche” cuts that will reward the richest Australians the most, and at the greatest expense. Her claim that the Liberals will surely reverse the policy should it become too costly sure is an act of faith.

Alas, her vote, plus that of other crossbenchers, got the tax cuts over the line. Why, then, the Labor party – whose very platform commits them to progressive taxation, who barely lost a very close election two months ago on an explicit social-democratic platform, whose most notorious neoliberal has renounced the ideology of Friedman as “a dead end” – chose to throw their powerless votes behind failed economics and recruit themselves into complicity with an inevitable destruction of jobs … is just unfathomable.

Waleed Aly penned an articulate ideological riposte to Labor’s betrayal of principle. My criticism is pragmatic. There are 15 months before even a territory election obliges more caution. There is no cost to Labor now battling every parliamentary bout around the one simple, economic offer it can make to the electorate but which Liberal ideology prevents: Labor will protect jobs, and create jobs in the places – and spaces, like for the climate – where jobs are needed.

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Not fighting the tax cuts on a jobs message was a staggering squib. What is Labor’s fear here? That the Liberals will smear it as high-taxing? That News Corp will join in? It is amazing the Labor politicians have not learned: their parliamentary votes are immaterial. Their enemies mount the same attacks – they’ll even make them up – as they have, every election since Federation. Appeasing Liberal party policy never negates their attack. It merely allows the Liberals to legislate their madness without criticism.

The popular support Labor’s new leader, Anthony Albanese, enjoyed long before he even gained the leadership was based on a reputation for “fighting Tories”. Those who yearned for a dog in the political brawl who would show more teeth than the conciliatory, consensus politician Bill Shorten, have just watched their political animal enter its first actual fight, and roll over.

What is the appeal of capitulation to any part of the electorate?

Zealots, at least, have the confidence of their convictions. False converts, on the other hand, come across as craven. They come across as weak.

• Van Badham is a Guardian Australia columnist