Taxing lyrical
Jim Chalmers is selling tax changes as a productivity fix, but economists say supply bottlenecks and weaker investment could limit the payoff.
Jim Chalmers is clearly under pressure.
After a budget that drew a fiercely negative reception, the treasurer was keen to highlight the government’s role in pushing headline inflation lower through its temporary fuel excise discount, while insisting the budget was “so responsible”.
But at his midday press conference after official inflation data for April came in slightly weaker than expected, Chalmers faced questions almost entirely about his plan to scrap the 50% capital gains tax discount.
Apart from acknowledging that startups “have got a special case to make”, Chalmers argued the tax changes, combined with limiting negative gearing to newly built homes, would direct investment to “its most productive home and not for a purpose like established housing”.
“It’s a really strange argument that some people are mounting that says if we’ve had a quarter century of bad productivity outcomes the best thing to do in this big important part of the tax system is to leave everything exactly as it was,” Chalmers told reporters at Parliament House.
