Chalmers to push ahead with unrealised gains tax as broader reform debate kicks off
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More news: Treasurer Jim Chalmers will not put taxes on unrealised capital gains in superannuation on pause as he opens up the debate on a broader tax reform agenda to drive productivity.
Responding to questions from the media after his National Press Club address on Wednesday, Chalmers said the government has a mandate for the changes it took to the election — including the new taxes on high-value super funds.
Instead, he said he anticipated and welcomed additional discussions about tax as the productivity roundtable occurs.
“We don’t see that as an opportunity to walk back on some of the things that we’re already committed to, in this case some years ago,” he said.
Speaking about the challenges of broader tax reform, he said one of the reasons countries have been spinning their wheels on reforms is due to difficult trade-offs. He said this was also the case in terms of “broadening the base and lowering the rate” in the tax system.
“There has been a welcome and encouraging discussion about the level of ambition that Australia has,” he said about the aftermath of the election.
“Right now, I feel encouraged and confident that there is an element of that in the broader community … I think that’s welcome, that’s necessary”.
He said he would try to “respond in kind” when the crossbench and the opposition take a constructive approach.
“The more buy-in we can get across the Parliament, the better,” he said.
He said he hoped there would be contributions from those participating in the discussion for where tax relief could be offset by less spending in some areas, rather than solely higher taxes elsewhere.
Asked about the timing of changes that come from the roundtable, he sad it was “to be determined”. Areas with broad consensus might “not be feasible or wise” to wait for another election.
One of the major changes being pushed for by some economists is a broadening and increasing of the GST. Chalmers has typically been hesitant on this topic, but he said he would “try not to get in the process of shooting [down] ideas between now and the roundtable”.
He suspects it will be raised in the roundtable but said he hasn’t, so far, changed his view on the subject.
Jim Chalmers calls for tax reform for budget sustainability
The news: Treasurer Jim Chalmers will look for tax reform to shore up the budget and has called for the media and stakeholders to enter the debate with an open mind to build consensus.
Speaking at the National Press Club on Wednesday afternoon, Chalmers said he sees no way to make "sensible progress" on productivity, economic resilience or budget sustainability "without proper consideration of more tax reform".
He expects this to be a major focus of the upcoming productivity roundtable and has promised to approach the issue from a "practical, pragmatic and problem-solving middle ground" not "an ideological point of view".
Chalmers said he would work with Industry Minister Tim Ayres and assistant minister Andrew Charlton on AI and the digital economy "to capitalise on the huge gains on offer, not just set guardrails".
The context: Chalmers will convene a productivity discussion in Canberra from 19 to 21 August. About 25 stakeholders will be around the table, with a mix of experts, government, civil society, business and union representatives.
He will call for submissions ahead of the roundtable, and is requesting that ideas are presented through the view of the national interest, not "sectoral, state or vested interests", that the suggestions are budget neutral or positive, and that they are specific and practical.
Productivity Commission chair Danielle Wood will brief the group, with the interim five pillar reports to be a part of the discussion. This report has been looking at a raft of productivity-focused areas and economic dynamism including the corporate tax system. Chalmers has also asked RBA governor Michele Bullock to participate.
What he said: “To make progress we need an environment conducive to reform not hostile to reform,” Chalmers said.
“We need to be sure there are not just the right constituencies for change but the right conditions too,” he said, criticising the “rule-in-rule-out game” in the media.
“Of course there are things no sensible government will contemplate, but limiting ourselves to ruling things in or out forever has a cancerous effect on policy debates,” he said.
“It can rob an informed and modern country like ours the flexibility and maturity to respond to big challenges.
“A related problem is that too often, the loudest calls for economic reform in the abstract come from the noisiest opponents of actual reform in the specific.”
He said a failure would not be due to a lack of ideas, options or choices, or courage “but a shortage of consensus”.
The source: Treasurer Jim Chalmers' National Press Club address
