Peter Stefanovic:
To Canberra now, and it’s now a year since the federal government made a controversial decision to break an election promise and change plans for stage 3 tax cuts, and as we get closer to a federal election, the Treasurer claims the pivot has helped more people and even more will benefit from July this year.
Treasurer Jim Chalmers joins us now. Treasurer, good morning, thanks for your time. So how will more people benefit?
Jim Chalmers:
First of all of all, Pete, you were right to say it was a controversial decision at the time. Our opponents said that they’d absolutely roll back these tax cuts, but it was the right decision because it meant that every Australian taxpayer got a tax cut to help with the cost of living, not just some taxpayers.
What we’re seeing over the course of this financial year is every taxpayer getting a tax cut. That tax cut will grow in the next financial year because wages are up as well.
If you think about how we’re combatting the very real and genuine cost‑of‑living pressures that people are confronting, we’ve got unemployment low, we’ve inflation down, we’ve got wages up, and that means the tax cuts are bigger as well.
That’s because the defining purpose of this Albanese Labor government is to make sure more people are working, earning more and keeping more of what they earn, and that’s what the decision that we took a year ago from Saturday is all about.
Stefanovic:
Right. But those gains are being swallowed up by overall cost of living though, aren’t they?
Chalmers:
Australians would be worse off without them. That’s very clear. If Peter Dutton and Angus Taylor had their way and only some people were getting these tax cuts, then a lot of Australians would be worse off.
We do more than acknowledge that people are under pressure, we’ve actually acted to help take some of the edge off these cost‑of‑living pressures – whether it’s tax cuts, energy bill relief, getting wages moving again, early childhood education, medicine, student debt relief, Fee‑Free TAFE – all of these measures. They don’t just demonstrate that the Albanese Labor government has been completely focused on the cost of living. They also show that we’ve been able to do all of those things at the same time as we’ve got the budget in much better nick.
Stefanovic:
Okay.
Chalmers:
We know that when we make progress together nationally in our economy or in the budget, it doesn’t always immediately translate into how people are feeling and faring in the economy. But people would be much worse off without the tax cuts we announced a year ago.
Stefanovic:
Right, yeah.
Chalmers:
They’d be much worse off under Peter Dutton, and that’s why he’s such a risk to their household budgets as the year unfolds.
Stefanovic:
Yeah, and look, further to that, I’m just not sure how much of that message is translating though because, you know, people are looking at their pockets, as you know, and a new Resolve poll out today has 46 per cent of voters saying that they expect real wages to fall this year, 50 per cent believe inflation will worsen. So even though more people stand to earn more, as you’ve just outlined, have you made things worse on the whole?
Chalmers:
No, we’ve made things better when it comes to getting inflation down and providing cost‑of‑living help, getting real wages up, keeping unemployment low. But again, we acknowledge that some of these polls reflect the pressures that people are under.
We don’t need opinion polls to tell us that household budgets are tight. That’s why we’re responding to that with all of this cost‑of‑living help.
There have been 2 polls out this week, they’ve said very different things about the cost of living, but overall despite the progress that we’re making in the economy together on inflation, on wages, on jobs, and getting the budget in much better condition, we know that people are still under pressure and that’s why the choice at this election is so important.
You’ve got Anthony Albanese and Labor helping with the cost of living, strengthening Medicare, building Australia’s future, and you’ve got the very real risk posed by Peter Dutton and the Coalition. He went after Medicare last time he was Health Minister. They will push wages down again. They will push electricity prices up with this nuclear insanity and they’ll take Australia backwards.
As we get closer and closer to the choice at this election between Labor helping with the cost of living and Peter Dutton making things worse, that choice will crystallise.
We know that people are under pressure. We’ve spent 2 and a half years responding to those genuine cost‑of‑living pressures and people would be much worse off without our efforts.
Stefanovic:
All right, okay. I’m running out of time, but I’ve got to get your response to a few other things too, Treasurer. So I just want to get your view on the Coalition’s recent tax promise for small business. The Daily Telegraph has some detail on that this morning. Tickets to footy matches, a round of golf, trip to the movies has been included, not so for meetings at strip clubs – I’m not sure how many meetings actually take place there but here we are – what are your thoughts on that?
Chalmers:
It’s a farce and that’s why this policy’s falling down all around them. It’s why –
Stefanovic:
Which parts are farces?
Chalmers:
– they won’t tell us how much it will cost. It’s a farce that after 2 and a half years, almost 3 years in Opposition this is the best they can come up with. And again, it goes to the choice at the election.
We’re for helping workers with decent pay rises and tax cuts and helping with the cost of living. These characters are for taxpayer funded long lunches and golf days for bosses, and that does speak to the very real difference and the very real choice at the election.
It’s long past time for Peter Dutton and Angus Taylor to tell people how much does this farce cost? How will they make sure that it’s not rorted? They’re making it up as they go along despite having 3 years to come up with it, and the contrast really couldn’t be clearer.
We’re for workers and cost‑of‑living help. They’re for taxpayer funded long lunches and golf days for bosses.
Stefanovic:
James Paterson’s coming up in the program too, I’ll put those questions to him. Just 2 more, Treasurer. Your plans to double the tax for super balances above $3 million, it’s hit a roadblock, or maybe 8 roadblocks in the number of crossbenchers who don’t seem to like it. Is it doomed?
Chalmers:
We made this announcement 2 years ago to turn what are very generous concessions for people with big super balances into slightly less generous concessions for people with big superannuation balances. We remain committed to it. The Senate has expressed a view on that on a couple of occasions and we’ll keep working to implement it.
Stefanovic:
Right.
Chalmers:
Because this is one of the ways that we fund the cost‑of‑living help or strengthening Medicare or the things that we want to see in our Budget in the most responsible way.
We know that our political opponents are digging in for people who have got more than $3 million in super, they’re digging in for long lunches and bosses.
Stefanovic:
Yeah.
Chalmers:
We’re for cost‑of‑living help and strengthening Medicare and we’ve got to pay it for it somehow.
Stefanovic:
Just on that, I mean as you know there’s assets and families have farms and whatnot parked in super that they hand down to the next generations, and the sticking point is that it’s about unrealised gains. Is it really fair to tax gains that haven’t happened yet? I mean this is an approach that the Democrats recently took, it didn’t work in the US. So, is it something that you’re going to have to wind back?
Chalmers:
First of all, we did heaps of consultation and this was the best way to go about it.
Secondly, there are other parts of the superannuation system where unrealised gains are calculated.
And, thirdly, when it comes to some of the issues raised by farmers and others, it’s already the law that people are supposed to maintain an element of liquidity to be able to meet their tax obligations.
We know that people have got a view about it. We engage respectfully with the Senate. We would like to pass those tax changes so that we can pay for our efforts to strengthen Medicare and provide cost‑of‑living help because we think that’s the most responsible way to go about it.
Stefanovic:
All right. One more, Treasurer, because I know you’ve got to go. As your government pursues social media giants for the tech tax, do you have any concerns about Donald Trump’s blowback and that he could increase taxes for Australian businesses operating in the US?
Chalmers:
We expect there to be policy changes out of the US. We’re confident we can navigate those policy changes from a new administration. We’re well placed and well prepared to do that.
When it comes to the news media bargaining code, what we’re talking about here is just implementing a change that began in 2021 under our predecessors.
It’s just about making sure that the tech platforms make deals with the media organisations to reflect the value of the media that’s presented on those platforms. And so not an especially controversial change. It will affect different American companies differently, but overall, we’re confident in our ability to navigate the policy changes that we expect from a new administration.
Stefanovic:
All right. That’s the Treasurer, Jim Chalmers. Thank you so much for your time this morning, Treasurer, appreciate it.