Labor plots budget housing boost to fend off One Nation
Jacob Shteyman |
Changes in the federal budget will counter political discontent fuelling the rise of right-wing populism, the treasurer says, as he unveils his centrepiece productivity package aimed at lifting living standards.
As voters prepare to cast their final ballots in the Farrer by-election on Saturday and probably elect a right-wing One Nation MP to federal parliament for the first time, Dr Chalmers revealed Labor will cut regulatory costs for businesses by $10.2 billion each year.
The productivity push, which includes slashing layers of reduplicative red rape for businesses and simplifying skills recognition for migrant workers, forms part of a broader theme around Tuesday’s budget of making it easier for young Australians to buy a home.
Economic disaffection was impacting politics around the world, Dr Chalmers said in an interview with AAP that was conducted before Nigel Farage’s right-wing populist Reform party enjoyed a massive swing in local elections in the UK.
“We don’t want to go down that path in Australia,” he said.
“We’ve got a lot more going for us here, but we’re not complacent about the risks.
“A big motivation for this budget is to help more Australians get a toehold in the economy and part of that is helping more people get a toehold in the housing market.”
The government maintains its primary focus to lift home ownership is to boost supply.
The budget promises to build on state and territory efforts to liberalise planning and zoning laws by removing red tape holding back modern methods of construction, like modular housing.
There will also be changes to the points test for skilled migrants and moves to speed up skills recognition for migrant tradies in a bid to address the worker shortage hitting the sector.
Support for home-buyers will go beyond productivity.
The budget will wind back negative gearing and capital gains tax discounts for property investors, which will give prospective owner-occupiers a relative edge over landlords, even if most economists expect the impact on prices to be marginal.
The housing reforms risk being framed as a cash grab targeting older generations and an attack on aspiration.
But Dr Chalmers said the “difficult decisions” the government was taking to tackle Australia’s intergenerational challenges should benefit everyone.
“Primarily, this is about providing more opportunity to more people,” he said.
“Whenever you’re going down the hard road of reform, rather than the path of least resistance, there’ll be the usual scare campaigns full of lies, and there’ll be people trying to make everyone angry about the sensible steps that we are proposing on Tuesday night.
“But overall, it’s about making our economy stronger and fairer, our budget more sustainable, in a way that we hope that every Australian will benefit from.”
The government’s productivity package is expected to boost GDP by $13 billion a year.
Small businesses will get their wish of the $20,000 instant asset write-off being made permanent, which the government says will save employers 376,000 hours on their tax returns.
But Labor is yet to announce any changes to business tax arrangements that would incentivise productivity.
Dr Chalmers confirmed the budget won’t include the Productivity Commission’s proposal for a novel corporate cashflow tax, which was intended to encourage investment but was rejected by the business community as too complex and adding to the tax burden.
Of the five fiscal blueprints in his time as treasurer, Dr Chalmers said this has been his most difficult, but also the most ambitious and the most responsible.
War in the Middle East has added a new focus of resilience to the budget, and $10.7 billion in new spending to increase Australia’s fuel reserves.
Feasibility studies will also be conducted into expanding existing fuel refineries or building new ones.
“Overwhelmingly, our approach has not been to try and turn back the clock to some kind of 1950s-style protectionism,” Dr Chalmers said.
“Our goal is to recognise the opportunities of the modern economy. To look forwards, not back.”
AAP