Isabella Higgins:
Treasurer Jim Chalmers has outlined his ambition to implement bold tax reforms. In a major speech, he declared he didn’t want to engage in a rule‑in‑rule‑out game. He says everything is on the table ahead of a key economic roundtable in August. He joined me a short time ago.
Treasurer, this conflict has already had some global financial impacts. In your view, what level of economic threat does this conflict pose?
Jim Chalmers:
The big risk here is obviously oil prices. We saw a big spike on Friday in the price of oil. That has implications for Australians at the petrol bowser. And there’s a lot of concern about what it might mean not just for inflation, as important as that is, but also global growth. If you look at the US Fed, which met overnight to determine the course of interest rates, they left their interest rates on hold for now. They want to see how that uncertainty plays out. But they did revise down their expectations for growth in the American economy. They did revise up their expectations for inflation and unemployment.
I think that’s a bit of a hint of the potential consequences of what we’re seeing in the Middle East. As I said before, it’s a really dangerous time on the ground in the Middle East, but also a dangerous time for the global economy. And I think a lot of people, including us, are alive to those risks. So, I get briefed daily on the consequences for our economy and the global economy from what we’re seeing in the Middle East.
Higgins:
Well, Treasurer, it’s your job in this uncertain times that you would like to, as you say, have a plan for major tax reform highlighted in a major speech yesterday saying that an economic reform roundtable in August is a key moment to shape what that might look like. You’ve said you don’t want to engage in a game of rule‑in‑rule‑out, but do you expect robust reforms can be implemented in this term of parliament?
Chalmers:
I think so. And the point that we’re making, the reason we’re gathering this reform roundtable, is because the best defence against all this global economic uncertainty is a more productive economy, a more sustainable budget and more resilience in the face of what’s happening around the world. It’s the best way to lift living standards and create more opportunities in our economy and in our society. So we’re bringing people together – our belief, the Prime Minister’s belief, and right through the government is the best way to make progress is together. That’s what this reform roundtable is all about. It’s a smaller group, it’s got a targeted agenda. It’s all about how we try and build some consensus around our major economic challenges.
We expect, we anticipate, we welcome the fact that people will have a whole range of views about the best way to go about that. Our job and the job of the reform roundtable is to see where there might be some common ground. We already have a big economic reform agenda. We’re already making progress in our economy. We’ve made big progress in our Budget. And this is about how we consider next steps in a consultative and a collaborative way.
Higgins:
But truly robust change, do they not need electoral mandate, major reforms? If we think, the GST John Howard took that to the election, are you nervous about taking major reform to the public when they haven’t been before the election?
Chalmers:
When I was asked about this at the National Press Club my point then, and the point that I would make again today, is that we would decide the sequencing and the timing of any changes depending on what the nature of those changes are. We don’t want to pre‑empt the conversation at the reform roundtable. People will bring big ideas. It will be an opportunity to see if we can build some consensus. And once we know the sorts of directions that people want us to pick up and run with, that would be the appropriate time to work out the sequencing of it.
It may be that there are some things that come out of the roundtable which could be implemented relatively quickly. We don’t know yet. And so let’s see what people bring to the table. I’ve been so encouraged by the spirit with which people are approaching this opportunity, and I don’t want to artificially limit that or narrow that by ruling things in, ruling things out or thinking about sequencing before we’ve got all the ideas on the table.
Higgins:
But Treasurer, just how willing would you be to compromise on some of these plans? For example, the superannuation tax reforms. The Coalition doesn’t look likely to support that. Are you willing to work with the Greens?
Chalmers:
We’ve said that we’ll do our best to get it through the Senate. And that necessarily involves conversations with the Greens. I think that’s self‑evident. The opposition is opposed to that change. And the roundtable is about working on the –
Higgins:
– on the superannuation, are you willing to meet the Greens on the lowered threshold of $2 million instead of $3 million, and those changes to indexation rules?
Chalmers:
I thought you meant am I prepared to meet with the Greens, which I will. But in terms of the proposals they’ve put on the table, our preference and our expectation is that we legislate what we took to the people and what we announced more than 2 years ago. But I will respectfully engage with the Greens and with others in the Senate to pass this legislation. We did announce this policy almost 2 and a half years ago. There has been an election in between, and we’ll have the necessary conversations to try and see it passed.
Higgins:
Treasurer Jim Chalmers, thanks very much for joining us on AM.
Chalmers:
Thanks, Isabella.