Karl Stefanovic:
More now on Labor’s budget back‑down, and Treasurer Jim Chalmers joins us from the Central Coast of New South Wales. Jim, good morning to you. Look, carve outs or cave in, the whole thing’s a bit amateur hour, isn’t it?
Jim Chalmers:
Morning, Karl. This is the consultation that we flagged on Budget night. It’s all about providing more certainty for investors, more support for small business, more incentives for innovation. It’s not unusual when a government’s embarking on significant tax reform for there to be a period of consultation to nail down the implementation details, and that’s what we’re seeing here.
Stefanovic:
Well, the policy’s a howler. You just didn’t see the wild backlash coming, did you, and that’s why you’ve changed it?
Chalmers:
No, Karl, we anticipated that there’d be the usual partisan campaign that accompanies economic reform in this country, particularly tax reform in this country. There are people who would prefer that we left everything exactly as it is, but the status quo right now in the housing market and the tax system is locking too many people, particularly too many young people, out of housing. That’s why we’re taking difficult decisions politically but the right decisions to address that problem that’s been in our economy and in our society for too long.
Stefanovic:
The right decisions, but aren’t you admitting this morning that the policy was wrong?
Chalmers:
No, Karl, we flagged on Budget night that we’d do more consultation with start‑ups. We’ve said for weeks now that we’re engaged with the small business community –
Stefanovic:
But, Jim, you changed it.
Chalmers:
What we’ve done here is we’ve announced the implementation details, the next steps. We said we’d consult on start‑ups, we have and we are. We said that we’d engage with the small business community on the turnover threshold.
What the next steps that we announced yesterday mean is that 100 per cent of the 2.7 million active small businesses in this country will have access to concessions, 98 per cent of active businesses overall. That’s because the consultation’s been real, it’s been meaningful. We have listened as we’ve bedded down these implementation details.
It’s not unusual for governments of either political persuasion to engage in that kind of consultation after a budget and before the legislation is passed through the parliament, and that’s what we’ve been doing here.
Stefanovic:
Okay. You’ve said the criticisms on ministerial powers weren’t a problem, they were rubbish and untrue is what you said about the criticism, and then you backed down. You know how bad that looks?
Chalmers:
Two points there. First of all, governments and treasurers of both political persuasions have had the ability through legislative instruments which are disallowable by the parliament to set some of the definitions in tax law. I don’t remember there being an uproar when Liberal treasurers did it. That’s the first point.
The second point is where we can provide more certainty and more clarity in the efforts of passing this legislation through the Senate, we seek to do that. In some instances where it would be normal for a Treasurer to have those legislative instruments, that ministerial discretion, if we can put that into the primary legislation, we will try and do that.
That once again is about trying to provide more certainty for people who are interacting with these tax reforms that we’re proposing.
Stefanovic:
Doesn’t it get more confusing now? I mean maybe you can clarify for us this morning. What is a start‑up?
Chalmers:
We put out a paper on this yesterday because there’s more consultation happening on start‑ups, because some of the most important –
Stefanovic:
But I think there’s more confusion over the paper.
Chalmers:
No, I don’t think so. The Tech Council, which represents the tech start‑up community, were very welcoming of the paper that we put out yesterday and the consultation process more broadly. I’m grateful for them for the way that we’ve been engaging with them.
Stefanovic:
I don’t think tech operators are very happy with it.
Chalmers:
In that paper some of the consideration –
Stefanovic:
Have you read much from them this morning?
Chalmers:
There’s never going to be a unanimous view about economic reform, and particularly about tax reform, we acknowledge that. But the Tech Council welcomed the steps that we put out yesterday. The definition of start‑up is part of that consultation paper. It’s about whether there’s innovation, how long the shares are held for, how old the company is, those sorts of considerations. They exist elsewhere in the tax law and in public policy and so we’re consulting on that in ways that the Tech Council has welcomed.
Stefanovic:
Okay. I don’t know that it gets less confusing. What about biomedical start‑ups?
Chalmers:
We say in the paper that we understand that in the biomedical part of the start‑up sector, the innovation sector, that there are some longer time frames. We’re very specific about that in the consultation paper and we’ll continue to engage with that really important part of the economy.
Stefanovic:
Any other back downs coming, or is that it now, bearing in mind that your word is your bond?
Chalmers:
The turnover threshold for small business concessions is settled now, we’ll try and legislate that in the parliament in the course of the next fortnight. Some of these other considerations around start‑ups, we’ve said that there is more consultation happening.
What we’ve been able to do here is to maintain the intent of the legislation, which is all about making it easier for first-home buyers, cutting taxes for workers, making the tax system fairer for people who work for a living. Those objectives are still in place.
There’s lots of consultation has been underway and will continue to be underway about the final details of all of that, and we’re engaging in good faith with the representatives of the various groups.
Stefanovic:
Look, the public I think is still wildly angry about not being consulted about this, the fact that it wasn’t taken to the last election. You sprung it on them, you tried to get it through quickly and now you’re backing down on some of those areas. Do you get the feeling that the PM is off you?
Chalmers:
No, not at all, we worked very closely on the Budget and subsequently as well to bed down these implementation details in the tax reforms that we are proposing. I’m very grateful to the PM. We know that when you take on economic reform in this country, and especially tax reform, that that can be politically difficult. But what we’ve chosen to do together is to take the more difficult path to get this right, the hard road of reform rather than the path of least political resistance, and we work very closely together to land these details and to get it through the parliament.
Stefanovic:
You’ll both go down together.
Chalmers:
We work very closely together, we both think that these are really important reforms for the country because it’s about making it easier for first-home buyers and making it possible to cut taxes for workers. Those are our objectives.
We’ll continue to work through all of the issues that are raised with us to bed down these implementation details, but this is a really important set of reforms. We’re proud of these reforms, we’ll work very hard to land them.
Stefanovic:
All right, plenty of work to do. Appreciate you being on the show as always, Jim, thanks mate.