Right tax moves matter more than mandates: treasurer
Jacob Shteyman, Andrew Brown and Tess Ikonomou |
Making the right decisions for Australians is more important than adhering to election promises, the treasurer says, as the government faces criticism it has no mandate for expected tax changes.
With Jim Chalmers preparing to hand down his fifth budget, Labor has been accused of going after “mum and dad” investors as family trusts join capital gains tax discounts and negative gearing on the list of possible targets for review.
Despite Prime Minister Anthony Albanese ruling out negative gearing changes before the 2025 federal election, the treasurer said intergenerational pressures would be a focus of the budget.
“The best way to build trust is to make the right decisions for the right reasons,” Dr Chalmers said on Monday.
“This budget is not about and never will be about setting some Australians against other Australians. It’s about recognising some of these legitimate intergenerational concerns, which, in my experience … are often shared by older Australians.”
Senior Labor figures have done little to dampen expectations the budget will deliver major changes to the treatment of investor tax concessions.
The budget is being finalised later than normal because of volatility in the Middle East and it remains unclear whether budget savings or increased taxes on investors will be funnelled into tax relief for workers.
Asked whether more tax cuts could be coming, Dr Chalmers deflected, saying reductions announced in the last budget were on the way.
While the treasurer said there would be a range of contingencies for further cost-of-living relief, a decision on whether to extend the fuel excise tax cut beyond the end of June would only be made after the budget.
There would be more dollars in savings than revenue upgrades in the budget, with government decisions set to have a net positive impact on the bottom line for the second update in a row, Dr Chalmers said.
Some savings have already been flagged, including plans to remove at least 160,000 people from the NDIS by 2030 as the government curbs growth in spending on the scheme.
The move will do the heavy lifting in budget repair, providing more than $35 billion in forecast savings, although states have sounded the alarm about the plan.
Businesses and economists would welcome a frugal fiscal update.
A big, broad-based stimulus would only make the Reserve Bank’s job tackling inflation harder, said HSBC Australia’s chief economist Paul Bloxham, who called for comprehensive reform beyond simply adjusting property tax breaks.
In its pre-budget submission, the Business Council called for spending discipline and changes to improve productivity long-term.
“This budget should include reduced spending to curb inflation, significant reductions in red tape and tax changes which drive investment and lift living standards,” the council’s chief executive Bran Black said.
In a speech to the Australian Chamber of Commerce and Industry in Melbourne on Monday, shadow treasurer Tim Wilson painted the expected tax changes as an “assault on family”.
“Their capital gains tax applies to everyday Australians, mums and dads, but probably won’t to industry super funds nor foreign investors in renewable energy,” he told the business group.
“Labor is building a class of Australians dependent on them being in office. This government is not about a better Australia; it is about securing power.”
The government on Monday announced it would suspend the commercial broadcasting tax for a further two years as part of the budget – a measure it estimated would save the industry $111 million through to June 2028.
AAP