Peter Stefanovic:
A major about face from the federal Treasurer Jim Chalmers this week after a reversal on his proposed super tax on super accounts above $3 million after championing it for 2 years. That means a new search for revenue in an already swollen budget.
Joining us live this morning is his assistant Dan Mulino. Dan, good to see you this morning. So given your prior economic experience, and I did ask you about it in the past, did you ever catch the ear of the Treasurer and say, ‘Mate, this isn’t a good idea’?
Daniel Mulino:
Well thanks for having me on, Pete, and look, I really welcome the changes that the government has announced earlier this week. It’s a different and better approach to dealing with super tax concessionality. Firstly, at the higher end balances, we’ve made a number of adjustments which reflect the fact that we’ve engaged deeply over the last couple of years and taken on board some feedback. Which is exactly what you want governments to do.
Stefanovic:
Right, but the original plan –
Mulino:
But also really importantly –
Stefanovic:
Did you like it or not?
Mulino:
I just wanted to also flag –
Stefanovic:
Okay.
Mulino:
– at the lower end we’ve also made significant changes for those on incomes of $45,000 or less.
But Pete, on that issue that you’ve just raised, the policy that we took was always motivated by a need to make sure that super concessionality was fairer and more sustainable. And that objective is still being achieved by this package, which is the fundamental objective.
Stefanovic:
But you still thought that the original idea in its original form was a good one?
Mulino:
Well so, look, we’ve engaged throughout the last couple of years, and I’ve been in this role for 6 months or so, and on a number of occasions I’ve met with stakeholders who have put a wide range of positions. I think the Treasurer and a number of other senior members of the government have acknowledged that there were elements of the package on which there was a wide range of views. So we have been consulting and that’s exactly what you’d hope that governments would do. And then we stepped through that feedback in a careful and methodical way and came up with a different and better way to achieve the same core objective.
Stefanovic:
Okay. It’s not going to raise as much money, we’ll get to that in a moment, but the Coalition is still considering whether or not to support it. It seems unlikely. Are you expecting the Greens to support this revised down package?
Mulino:
Well, I think if you look at this package, the fact that it does deal with concessionality at the very high end of balances, the fact that it will provide much better and fairer treatment of, concessional tax treatment, for those earning less than $45,000, 1.3 million people will benefit from that arrangement whereby all taxpayers earning less than 45,000 won’t pay any tax on their super contributions. You know, I’d find it very hard to imagine the Greens not supporting a package with all of those elements.
Stefanovic:
Dan, does this dampen or kill any hopes for broader tax reform?
Mulino:
Well the government has a very wide-ranging tax reform agenda already. So this is one element of it. Another element of it is the fact that we’re going to be bringing in tax cuts for all taxpayers by reducing the lowest tax rate from 16 to 15 then 14. And of course that was one of the reasons why the LISTO changes, the low income super tax offset changes were so important, and there’s ongoing work on multinational taxation.
So, look, there’s a lot of taxation reform going on, and that’s a really important program.
Stefanovic:
Okay.
Mulino:
And of course that’s dovetailed with the fact that we have such an ambitious reform agenda in so many other areas like climate change, skills and the EPBC Act among many others which were raised at the Economic Reform Roundtable.
Stefanovic:
Are family trusts in your sights now?
Mulino:
So look, there’s no plans to look at anything other than the tax policies that we have on the agenda at the minute. And we now need to focus on undertaking consultation to make sure that we get this revised package correct. It’s a complicated set of reforms dealing with superannuation tax concessions in a holistic way.
So we’re now going to step through further consultation to get all the details right there and that’s really the focus.
Stefanovic:
Mark McGowan has re‑emerged, Dan, and wants you to focus more on spending restraint rather than higher taxes. How does that square with your thinking?
Mulino:
Well this has been a government that has been very strong when it comes to fixing the government’s bottom line. In our first term and this part of the second term we’ve seen well over $100 billion of savings identified. So this is a government that is determined to achieve all that it can for the community through programs that are really important but to also identify savings where there’s unnecessary spending.
So over $100 billion is very significant, and that’s contributed to the fact that we’ve delivered surpluses in our first 2 years and dramatically improved the bottom line over the forward estimates. So we’re talking about something in the order of $200 billion less in debt and a significant amount less in interest payments. So, look, I support that broad concept and I’d say it’s actually been undertaken in what we’re doing with the budget.
Stefanovic:
All right. Just a final quick one here, Dan, the Treasurer, your boss, is about to head off to the US. What’s he hope to get out of that trip?
Mulino:
So he’s going to be attending the APEC forum and also G20, and I think it’s worth noting that those are both forums which Australia has played a pivotal role in over decades and actually been instrumental in setting up. And then he’ll also go to the annual meetings of the IMF and the World Bank.
And given that the world is facing a range of very significant economic challenges and that there’s uncertainty on a range of fronts, these multilateral forums are extremely important in helping countries come together and work on solutions.
Stefanovic:
That’s the Assistant Treasurer Daniel Mulino joining us on this Thursday morning. Dan, thank you.