Peter Stefanovic:
Well, in about 5 or 10 minutes from now, the Treasurer will answer some questions from reporters, which is tradition in the lead-up to his fifth Budget that will be held tonight. So yeah, we’ll get a nice walkup from there on what’s a nice chilly-looking morning in Canberra. So as soon as we see the Treasurer, we’ll be sure to take him.
But in the meantime, let’s get to our Tuesday morning panel, and it’s all the Budget build-up. It’s with the Assistant Treasurer, Dan Mulino, Shadow Home Affairs Minister, Jonathon Duniam.
Daniel, I know you’re not going to give me all the details ahead of the Treasurer doing a Q&A with these reporters, but anyway, let me start with this. How confident are you that you’ll be able to survive the political fallout from a series of broken promises?
Daniel Mulino:
Well, firstly, thanks for interviewing me in a much warmer environment. And can I just say, I think people are going to judge this Budget on what it actually achieves on a range of important fronts, including intergenerational fairness, productivity and the resilience of our economy and our society. That’s really going to be the bottom line, I think.
Stefanovic:
Okay. Well, intergenerational fairness, I mean, it’s what it’s all about. So let me start with this, Dan. Do you negatively gear investment properties at all?
Mulino:
Personally, no.
Stefanovic:
Okay. But I’m sure other parliamentarians do, and if so, why should they benefit from a former system while new aspirational Australians can’t?
Mulino:
So, look, I’m not going to announce specifics about how any particular policy might be implemented. But what I would say is this: whenever tax policy is being considered where it affects investment decisions that are made over the long run, transition arrangements are part of those considerations.
So again, I can’t talk about specifics. If we have an interview either at this time next week or any time after tonight –
Stefanovic:
Yeah, but –
Mulino:
– I will be able to talk in more detail, but –
Stefanovic:
Sure, sure, sure.
Mulino:
– transition arrangements are always a factor.
Stefanovic:
I guess the point remains, and Jonno, I’ll go to you in a moment, but the point remains, it doesn’t seem very fair for newer, younger aspirational Australians.
Mulino:
Well, you always have to balance the policy goals that you’re trying to achieve by particular –
Stefanovic:
But isn’t this about helping –
Mulino:
– tax reform, but also take into account decisions that people have made in the past on a certain understanding, and I think what you’ll see when you look at the totality of this Budget, that it is very much in favour of younger people, very much in favour of people who are trying to get into the housing market and people who are working.
Stefanovic:
Yeah. But meanwhile, still favouring those who have multiple properties. Are you catching my drift?
Mulino:
Yeah. And what I’m conceding is that there are balances to be made in a lot of policy areas, including this one.
Stefanovic:
Okay, all right. Jonno, your response to that, and your concerns about what might or might not be unveiled tonight. I mean, it is – until tonight it’s speculation, but still, there’s a lot for us to discuss.
Jonathon Duniam:
Yeah, look, there’s a lot of speculation with no denials, I’ve got to say –
Stefanovic:
That’s right.
Duniam:
– around a lot of the changes being mooted here. So you can sort of take it as read there will be changes to negative gearing, but it will only affect younger people who aren’t in the market yet, and sort of probably protect those who are there and probably force them then to hang on to their properties given the changes to capital gains; again, sort of, I think, a reverse effect of what the government were probably intending.
But that aside, the key question is will Australians be better off, feel better off or worse off as a result, and I’m not sure that this whole balancing exercise we’re talking about here is going to be better for Australian households doing it tough now.
I mean there’s reports there that the little tax handout that they’re talking about for working Australians is going to be hoovered up by bracket creep over the course of the next 12 months, so how much better off are they going to be? I moot not very much happier.
Stefanovic:
Well, I mean, yeah. And Dan, back to you for this, I mean, is this a distraction from the other cost of living problems, ie, the high cost of energy, the high levels of immigration and the low number of new house builds?
Mulino:
So if we go to energy, the government put in place a 50 per cent reduction in the fuel excise and also heavy vehicle user charges for 3 months; that was really important. And if you look at the last few years, we’ve got a range of tax cuts for all Australian taxpayers, including re-working the Stage 3 tax cuts and 2 additional tax cuts for all Australian taxpayers.
Stefanovic:
Of $5 a week.
Mulino:
So these –
Stefanovic:
But that’s gone already, Dan.
Mulino:
– add up to a significant amount, and –
Stefanovic:
$5 a week.
Mulino:
– and those were opposed by those opposite. Sorry.
Stefanovic:
It’s gone already, $5 a week. We’ve seen what’s happened over the past few months, the war in Iran. I mean that, and your proposed $250 handout for working Australians, it’s already gone.
Mulino:
But if you look at the accumulated effect of the re-working of the Stage 3 tax cuts and the 2 additional tax cuts, they do add up to a lot, and the point is, that’s all gains that people wouldn’t have had, they would have had those removed if the policies of the Opposition had been put in place.
But you also have to look at a lot of the other cost‑of‑living supports, such as cheaper medicines, rent relief in the first term, and so on. So there’s a very wide-ranging and responsible and targeted set of cost‑of‑living supports that this government has brought in, and this Budget will build on that.
Stefanovic:
All right. Okay. I guess you’re not going to explain how it’s going to build on that. We’ll wait for Jim Chalmers in just a moment. But I mean those handouts, those offers, as nice as they are, I mean, they’re already gone, aren’t they, Jonno?
Duniam:
Yes, they are. This is the thing. I mean, again, that key measure of the success or otherwise of a budget is going to be felt around kitchen tables and in living rooms tonight, and if people aren’t saying, ‘Oh, thank God that Jim Chalmers has done X, Y or Z, and I’m now much better off’, then this is a fail for Australian families, and a lot of things that Dan’s just talked about there, as you quite rightly point out, is being hoovered up by the cost of living increases, the war in Iran that the government have said is the cause for inflation, even though it was running at high numbers before the war even started.
So I honestly cannot see how, despite everything that’s just been talked about, all of these silver bullets they’re going to fire out tonight, they think Australians are going to be better off. They won’t.
Stefanovic:
Okay. Just let me get back to capital gains, Dan. I mean, as I’ve said before and multiple times, you’re a bright economic mind. But won’t this lead to an exodus of investments – if this turns out to be true; if this turns out to be true – where the cap gains tax discount is taken out, won’t that lead to an exodus of investors who head overseas because the tax arrangements will be more favourable there, because here it would be amongst the highest in the world, so people won’t invest in companies, et cetera?
Mulino:
Well, so I can’t talk about the specifics of what’s going to be in the Budget. But what I can say is that when we held the 3 day Reform Roundtable last year, in an area like tax there’s generally not unanimity on anything, but what came out of that roundtable when we had business, academic experts, community leaders, unions, everybody agreed – everybody – that we needed to do more when it came to intergenerational fairness, that in addition to building more supply, which needs to be the focus, we need to use other levers in the housing market that have been on the tax agenda for a long time that haven’t been addressed.
So that was something which came out loud and clear, and in the community debate that’s occurred since that, over the last year, I’ve heard loud and clear in a range of forums in my own community that people want us to be ambitious, people want us to pull other levers, other than just the supply lever, which of course remains our focus.
Stefanovic:
What about a carveout, Dan? Will there be a carve-out for start-ups?
Mulino:
Well, so again, this goes to the details of what comes out tonight, but I can confirm the broad framing, which is that, you know, when we came out of that Reform Roundtable, which was participated in by high-level experts from right across our community, those 2 themes of intergenerational fairness and productivity growth were absolutely central, and everybody agreed with.
So this Budget was framed very much with those themes in mind.
Stefanovic:
Okay. Daniel and Jonno, always good to talk to you on a Tuesday morning. Thank you so much for your time. You have a busy day ahead.
Mulino:
Thank you.