MICHAEL ROWLAND:
Treasurer, good morning to you.
JIM CHALMERS:
Good morning Michael.
ROWLAND:
You only started this conversation about super concessions a week ago. It was a very short chat. Why did Federal Cabinet move so quickly today to bring in these changes?
CHALMERS:
We thought it was important to make clear our intention to make this modest but meaningful change to superannuation tax concessions so that we can make super a bit more sustainable and affordable and so that we can make the Budget a bit more responsible. We take seriously the fact that we inherited that trillion dollars of debt and deficits as far as the eye can see and intensifying pressures on the Budget ‑ and so we need to do something about it. What this change means is that 99 and a half per cent of Australians will be unaffected. For that half a per cent with large superannuation balances, they'll still be able to access generous tax breaks on their super just a bit less generous than before. And as you rightly identify in your introduction, the change doesn't come in until after the next election.
ROWLAND:
Okay, so again, it was a short chat, there wasn't much in the way of consultation. Were you worried about the conversation getting away from you?
CHALMERS:
Not at all, and I think it was a good thing to be able to give Australians a bit of a sense of the sorts of budget pressures that we're grappling with. We have been talking about them for some time. One of the things I've tried to do as Treasurer is to engage with the Australian people on the pressures on the Budget, whether it's the increasing costs of servicing that trillion dollars in debt as interest rates rise, whether it's the NDIS, aged care, health care, defence spending. A lot of these pressures after the next couple of years are intensifying, rather than easing, and so we need to make a structural difference to that budget position. This is a good way to do it, because it leaves almost everybody unaffected. And even those people who will be affected will still be able to access generous tax breaks. And so we think it's a good change, a modest change in the context of all the superannuation tax concessions, but a meaningful and important change.
ROWLAND:
You said last night, you prefer to err on the side of frankness, so in that spirit, Treasurer, of being frank, why don't you just say `yes, we have broken this election promise but we've done so for all these reasons'? But at heart it's at odds with what you and the Prime Minister said you wouldn't do before the election.
CHALMERS:
First of all, the change comes in after the next election. I think that is important ‑
ROWLAND:
So why not wait? By all means take it to the people at the next election, but not bring it in until say 2026 or 2027?
CHALMERS:
It comes in after the next election.
ROWLAND:
But you could take it to the voters before the next election and say, for the sake of a year, if you vote us back, we will bring in these changes with a mandate in 2026?
CHALMERS:
We are taking it to the voters and the outcome of that election will determine whether we make this modest change or whether Peter Dutton comes after Medicare or finds the money some other way, like the last time that he was in office when he was the Health Minister. That will be one of the choices that people will make at the next election. But in terms of that spirit of frankness, we have been really up‑front with people about the sorts of pressures on the Budget. We've deliberately made this change after the next election. It's not a major change to the superannuation system, it leaves all the fundamentals in place, everybody can still access generous tax concessions in the system. But we need to be up‑front with people about the pressures on the Budget, including in those areas that I rattled off a moment ago. A responsible government can't ignore that. And that's why the announcement that we made yesterday is about one thing above all else, and that's responsible economic management, making these tax concessions more sustainable so that superannuation is more affordable and the Budget is more responsible.
ROWLAND:
In the spirit of frankness, can Australian taxpayers continue to afford losing $24 billion a year in deductions for landlords?
CHALMERS:
Those numbers that we released yesterday ‑ again ‑ governments of both political persuasions are required to release those numbers. And when we released them yesterday, we tried to make them as clear and accessible as possible so that people can understand the various parts of the tax system, including the tax breaks in the system, but I think we made it really clear yesterday that our focus in the system is on these superannuation tax concessions. $150 billion worth of concessions in the top 10 of those tax breaks by value ‑ that is superannuation. We made it clear that that's what we're focused on.
ROWLAND:
Excuse the interruption, it also includes $24 billion for landlords, pretty much about the same amount for discounted capital gains tax benefits for people selling things like investment properties. In the spirit of frankness, any government concerned about tackling the Budget would have to at least consider widening those measures back.
CHALMERS:
There are a range of tax concessions in the Budget but what we've said is we're focused on superannuation costs and that's why we made the announcement we made.
ROWLAND:
Those other measures are off the table, you won't touch deductions, the capital gains tax discount and the like?
CHALMERS:
We're not focused on those, Michael. When a government makes a meaningful announcement as we did yesterday, I think that demonstrates our priorities and our values here, which is to deal with some of these tax concessions in superannuation. Inevitably, people will make all kinds of suggestions about other parts of the tax system but we've made our priorities clear by announcing what we announced yesterday, we understand that changes in this area can be controversial. We accept that. But our job is to take the right decisions for the right reasons. Sometimes the right path is not the path of least resistance. We know that the Opposition wants to have a political fight about this. We don't think they should, but we know that they will. And we stand by these changes that we've announced because we think that they're a good policy outcome. They make the system a little bit fairer, without making major changes.
ROWLAND:
A couple of very quick questions before we go. Will these changes also apply to the generous politician pensions enjoyed by some politicians and defined benefit schemes enjoyed by public servants?
CHALMERS:
Yes, we're trying to include the defined benefit schemes in this. There's a lot of complexity. Again, it's one of the things that we're consulting on. But what we said yesterday is our intention is to include defined benefit. What we said is that there is an opportunity now, between yesterday's announcement and the Budget in May to engage in some meaningful consultation, and one of the things that we do want to engage on and consult on is how we include defined benefit in the changes that we've announced. It's not unusual for governments to do that in 2016, when the Liberals increased taxes on super, they found a way to factor in defined benefit. We've got a similar objective here, and we'll work with the sector to try and get it right.
ROWLAND:
Okay, something completely different to finish on overnight, the White House in the States has ordered all federal agencies to wipe TikTok off their phones. It follows similar moves by Canada and the European Union. I know some departments here in Australia have done so already but as a member of the National Security Committee, Treasurer, is it a time for Australia to consider a public service‑wide and agency‑wide ban on TikTok on devices.
CHALMERS:
We'll take the advice of our national security agencies ‑ that hasn't been the advice to date. We're obviously aware of the announcement the Americans made overnight. No doubt our colleagues in the agencies will be considering that and factoring that into their own thinking. But the advice to us hasn't yet changed. I'm not on TikTok, I'm not cool enough to be on TikTok.
ROWLAND:
You don't know what you're missing. You're not missing too much.
CHALMERS:
If we get that advice, no doubt people will act on it, but we haven't received that advice yet.
ROWLAND:
Okay, Treasurer, appreciate your time this morning. Thank you.
CHALMERS:
Thanks, Michael.