Sally Sara:
Joining me now is the Federal Treasurer, Jim Chalmers. Treasurer, welcome back to Breakfast.
Jim Chalmers:
Thanks very much, Sally.
Sara:
The Deputy Opposition Leader, Jane Hume, has called for a reset on how migration is managed, saying the Opposition wants to see a lower number of people come to Australia and to raise the standards. Does the government think a reset is warranted?
Chalmers:
Well, we’ve been working methodically, in a considered way to bring net overseas migration down. In fact, in the last full year, it was 30,000 people fewer than what was projected. It’s now fallen 7 quarters in a row and it’s down 45 per cent below its peak. So, we had that big spike towards the end of the Coalition years, where it went up 174 per cent in 6 months. We’ve been working a way to manage that down and we’re doing that in a methodical and a considered way consistent with the national interests. And I think the Liberals are doing what they always do, chasing One Nation votes by trying to blow this up as a political issue. They mismanaged the program. We saw it spike towards the end of their time in office. We’ve been managing it back down since then and that’s why it’s 45 per cent below its peak now.
Sara:
Are too many people coming to Australia, in the government’s view?
Chalmers:
Well, we’ve made it very clear that the spike that we saw towards the end of the Coalition period in office and at the start of our time in office was not sustainable, that we needed to get net overseas migration down, and that’s what we’ve been doing. You know, the fact that it’s 45 per cent below its peak, the fact that we’ve had 7 quarters in a row where it’s fallen, the fact that even in the last year it’s come in tens of thousands of people less than forecast. That’s a good thing because we’re managing it down to more normal levels. And that’s appropriate but ‑‑
Sara:
So, you’re looking to bring it down further, Treasurer?
Chalmers:
Well, you can see in our forecast in the Budget that we expect it to come down further. We’ve taken a number of steps, cracking down on dodgy visas, for example, and a number of other steps at the same time to help manage that down. It’s got a bit further to go if you look at our forecasts in the Budget. But again, Sally, the big difference here is we’re managing it down in that, in a considered way, working through the issues. I think the Liberal Party hasn’t changed at all. You know, it hasn’t learned a thing they still want to play politics with migration despite the fact that they are responsible for that big six‑month surge at the end of their time in office.
Sara:
The former Treasury Secretary Martin Parkinson, who led the government’s migration review in 2023, has told the Fin Review that updating the system for the selection of skilled migrants would improve trust in the system and boost productivity. Is that something the government is considering?
Chalmers:
We do work through those issues. I mean, that was a really important report that Martin Parkinson provided the government. There were a number of steps taken after we received that report, but it is an ongoing focus of the government, certainly my colleagues in the cabinet, to make sure that we’ve got the right mix, that as we manage net overseas migration down and we manage the migration program in the national interest, to make sure that we’re getting the skills that we need and not as a substitute for training Australians, which is our first priority, but supplementing the workforce where we need to do that. And again, that’s why it’s so important that we’re doing this in a considered and methodical way rather than trying to play politics with it, which is what our opponents are doing.
Sara:
Let’s look at capital gains. Mr Taylor says the Coalition won’t be supporting any changes to capital gains tax discount for owners of investment properties. Mr Taylor says if you tax homes, you get less homes. Are you going to wind back the concession?
Chalmers:
Well, 2 things about that. I mean, first of all, we haven’t changed our tax policies. And the second thing is if Angus Taylor cared about lower taxes, he wouldn’t have been the architect of the Liberal Party’s policy to increase income taxes on all 14 million Australian taxpaying workers.
Sara:
But back to this issue on CGT. Are you going to wind it back? When will we know?
Chalmers:
As I said a moment ago, Sally, we haven’t changed our policy on that. Our policy is to cut income taxes and Angus Taylor opposes that.
Sara:
What’s guiding your thinking here?
Chalmers:
Well, from time to time we get asked, Sally, by people such as yourself about issues, intergenerational issues in the tax system and in housing. And I think I’ve been very upfront for some time now, certainly in and around the Reform Roundtable and since then, that there are intergenerational issues in our budget and in our economy and we’ve got other ways of addressing them, in housing by building more homes and making it easier to save a deposit, and in the tax system by cutting income taxes and boosting the low income superannuation tax offset. That’s the government’s agenda. We haven’t changed our policies when it comes to tax or housing. We’ve got a big ambitious agenda already on both fronts and any steps beyond that would just be a matter for the cabinet in the usual way.
Sara:
The International Monetary Fund’s latest report released overnight examining the health of Australia’s economy is calling for far‑reaching tax reform and more ambition on productivity reform. Things like increasing the GST, overhauling capital gains tax and changes to corporate income tax. What do you think of the IMF’s latest review?
Chalmers:
Well, first of all, it was a very positive report about Australia and about the government’s economic plan. It was a powerful endorsement of our responsible economic management and our reform agenda. It described our budget management as effective. It described our agenda for productivity as bold. And in the usual way, it made a number of suggestions about additional reforms. But the IMF was very positive about Australia and about the government in that report that it released overnight. Now we know that there’s more work to do to make our budget more sustainable, to make our economy more productive. We’ve got this inflation challenge which is a big focus of the government and will be a big focus in the Budget as well. And as always, there are some ideas in these reports that we agree with, some that we don’t, that we won’t be picking up and running with. But overwhelmingly, this IMF report was a very positive report about Australia and about the government’s economic plan.
Sara:
Just briefly, last week you introduced legislation to Parliament to double the tax rate on super balances over $3 million and to set it at 40 per cent for super balances over $10 million. Have you had any progress in negotiations with the Greens?
Chalmers:
Well, look, we’ve had some discussions with the Greens in the Senate. I had a discussion with Nick McKim last week who’s my opposite number in the Greens political party. Those discussions aren’t concluded yet, but I certainly appreciate the constructive way that they are coming at this. They know that it’s been introduced into the House, it’ll be in the Senate before long, and our hope is that it will be resolved as soon as possible, because this is about making the superannuation system fairer from top to bottom. And by voting against these changes, as the Coalition proposes to do, they will be voting for lower superannuation balances for people with low incomes and bigger tax breaks for people who already have tens of millions of dollars in super. And so, we’ve been discussing that with the Greens. We know that we don’t control the numbers in the Senate. We can’t pass anything on our own. And we’ve been engaging constructively with Nick McKim and others in that regard.
Sara:
Jim Chalmers, thank you for your time this morning.
Chalmers:
Appreciate it, Sally. Thank you.