NSW Premier Chris Minns is saying out loud what plenty inside the Labor Party privately know: bracket creep is doing the heavy lifting for federal revenue, and working Australians are paying the price.

That is why his intervention this week is so awkward for Anthony Albanese.

It is one thing for the Liberal Party to accuse Labor of taxing too much. That’s standard fare. It’s what oppositions do, and voters discount it accordingly.

It is quite another thing, however, for the Labor Premier of Australia’s largest state (Albo’s home state) to effectively say the federal government is clipping the ticket from workers who are already doing it tough.

Minns isn’t mounting some ideological crusade on behalf of the wealthy. Nor is he suddenly auditioning to become the pin-up boy for supply-side economics. 

His point is much simpler and much more dangerous for federal Labor: ordinary Australians are being pushed into higher tax brackets that were never designed for them and federal Labor is just letting it happen.

Bracket creep is the sneakiest tax increase in Australian politics. Governments don’t need to announce it, or even proactively legislate for it. 

They don’t need to stand at a lectern and admit they are taking more money from people’s pay packets. It happens automatically.

Albo and his Treasurer Jim Chalmers simply need to sit back and let inflation and wages growth do their work. And don’t forget, we are living through a period of rising inflation.

A worker gets a pay rise, partly because prices have gone up, and then Canberra takes a larger slice of what they earn automatically. The government gets more revenue without having to wear the political odium of announcing a tax rise.

It is a brilliant trick if you are the Treasurer. Which is why the opposition leader Angus Taylor has announced plans to index income taxes if elected, to end the trickery of bracket creep. And Minns loves the idea.

Throw in that Albo broke a clear-cut election promise not to raise capital gains taxes or cut negative gearing, and it's no wonder there is growing anger towards the federal Labor government. 

What has been the PM’s reaction to it? To give himself a pat on the back for breaking his promises. He told morning radio the pre-election lies prove he has ‘the ticker to take the ball up (as they say) in rugby league’. I wonder if blindsided investors are as congratulatory as Albo is about himself.

The PM has spent years talking about cost-of-living relief, yet bracket creep quietly moves in the opposite direction. 

It takes more from people precisely when household budgets are already under serious pressure. Minns understands this because he has a very practical problem of his own.

As Premier, he can negotiate higher wages for nurses, teachers, police and other public sector workers, but then Canberra clips the ticket.

The more those workers earn, the more the federal tax system takes. Eventually pushing them into higher tax brackets. 

That makes the wage rises Minns works to deliver to his public sector employees less meaningful. Albo’s government benefits from state-level pay increases via higher income taxes and Minns is sick of it.

So who can blame him for speaking out?

Especially given that NSW already feels short-changed on infrastructure spending courtesy of the recent federal budget.

Minns’ intervention is a shot across the bow of his own side of politics, and Albo is seething about it privately, telling close confidants that he’ll remember the barb and pay it back in kind down the track. 

With Minns facing his own re-election in March next year it will be interesting to see if Albo seeks to cause him political damage during the state campaign.

The PM’s problem is that Minns’ critique cuts through because it’s true. It fits with what people feel in their own lives, working hard, earning more on paper, but not necessarily getting ahead. 

The usual Labor defence is that tax cuts are expensive, and governments need revenue to fund important services. 

But that isn’t an excuse for permanently banking the proceeds of inflation. Indexing income taxes wouldn’t just help people to retain a fairer share of their earnings, it would force spending-addicted governments to be more responsible with other people’s money.

Forcing them to find savings rather than let recurrent spending continue to climb off the back of bracket creep.

Every year that bracket creep goes unaddressed, the tax system becomes less honest. It drags more workers into higher marginal rates and makes the gap between gross income and take-home pay more painful. 

Minns saying that workers work Monday, Tuesday and half of Wednesday for their families before working the rest of the week for the government powerfully cut through about just how much tax many Australians are forced to pay.

We have one of the highest income tax dependencies anywhere in the world. Federal Labor knows this, but it is incentivised not to reform it.

Minns, on the other hand, has had a gutful.