Sarah Ferguson:
The Treasurer, Jim Chalmers, joined me earlier. Treasurer, welcome to 7.30.
Jim Chalmers:
Thank you, Sarah.
Ferguson:
You keep saying how relaxed you are about the release of confidential advice from the Treasury. What did you actually say when you were told it had been released?
Chalmers:
I’m not sure what I said at the time, but I am genuinely pretty relaxed about it. First of all, there’s no point being angry about it. It’s happened, so be it. Governments get advice from departments all of the time. It’s up to governments to pick up and run with the bits of the advice that they would like to pick up and run with.
But I’ve done more than that, I’ve said publicly at the Press Club and on almost every other occasion that I’ve been able to do that, I’ve said the government’s priorities are budget sustainability, productivity and resilience. Those are the themes of the Economic Reform Roundtable I’ll be hosting here in Canberra and they’re the priorities that I’ve got in the second term of the government.
Ferguson:
On proposed changes to the GST. You’ve been opposed to changing the GST for a very long time on the grounds that it targets the poorest Australians or hits the poorest Australians disproportionately. So, why not consider changes to exemptions on things like private health and private education? Things that don’t target those people?
Chalmers:
Look, as the Prime Minister has made clear, and I’ve made clear on a number of occasions, as you rightly summarise in your question, this has not been an area that we are keen on. Whether it’s the base or the rate of the GST –
Ferguson:
But just on those, if I may, just on those specific things, because I don’t think I understand why. Why is it those exemptions? Is it just that you will not touch GST because they do seem to be options for revenue that don’t target the poor?
Chalmers:
Well, first of all, I’m just reminding your viewers, Sarah, that I have had a view historically about this, I’m not walking away from that view. But I don’t want to artificially limit or narrow proposals, ideas and suggestions that people might want to bring to the Economic Reform Roundtable. We’ve asked for people’s ideas and it may be that people come forward with ideas like the one that you’ve put in your question.
It’s not something that we’ve been attracted to. I think in addition to the concerns that we have repeated on a number of occasions now about the distributional impact on different people, we’ve also got to remember that every cent of the GST goes to the states. Often when people propose to us changes to the base or the rate of the GST, they spend that additional revenue many times over. Whether it’s compensation, whether it’s money for the states buying state tax reform, and that’s not irrelevant to us either. But again, if people want to come to the roundtable and put those sorts of views, they’re welcome to do so. The Prime Minister and I have had a view about this, and that view hasn’t changed.
Ferguson:
Well, let me flip the question then. You say you won’t touch the GST, you’re not going to touch the taxation of resources, or we know you’re not going to touch capital gains or negative gearing. So, what are the areas of taxation that you are focused on for raising the revenue that the budget so desperately needs?
Chalmers:
Well, I mean, again, we’ve shown a willingness and an ability to change the multinational arrangements, the PRRT arrangements and other tax reforms –
Ferguson:
That’s historically. Let’s focus on the future. Yep.
Chalmers:
Yes, but it reminds people that raising more revenue in one area in order to fund income tax cuts in another area is not especially new or novel. It’s been a feature of most of the first 4 Budgets that I’ve handed down with Katy Gallagher. That’s just a reminder about that. Now, also, we need to remember that tax is an important part of the roundtable, but not the only part of the roundtable.
We’ve asked people to come with ideas around tax and budget sustainability, but also ideas around AI and technology, productivity approvals, better regulation, Commonwealth state reform when it comes to productivity. And so there are a whole range of issues that people will raise at the Economic Reform Roundtable. That’s a good thing. We’ve made a lot of progress together in our economy. The best way to work out next steps is to do that together. And so in order to do that, I’ve tried not to dictate to people what ideas they might bring.
Ferguson:
Treasury says in this, in these subheads that were released by mistake, that you should build on your superannuation tax changes. What could that entail?
Chalmers:
As you refer in your question, talking about subheadings in a much longer document. It’s not possible for those subheadings to capture all of the nuance in a much bigger incoming government brief –
Ferguson:
Sure, but what was underneath? What was underneath that subheading? When they say build on your superannuation tax changes, what could that entail?
Chalmers:
I think the Treasury is making the same point in the incoming government brief that I’ve made publicly, which is we need to find ways to make the budget more sustainable. Now, from a government point of view, our focus has been on the changes that we announced 2 and a half years ago, which haven’t yet been legislated. We haven’t been proposing to take additional steps. We haven’t been working up additional steps to take. We’ve been trying to legislate the change that we announced some years ago.
Now, more broadly, as the Treasury has told us privately and as I have said publicly, we are interested in ideas to make sure that we can make the budget more sustainable. Part of that will be savings. Part of that will be spending restraint. Part of it will be dealing with some of the structural issues in the budget. And if people have ideas about tax reform, we want to hear those as well.
Ferguson:
The bluntest heading in these documents is this one. The 1.2 million new homes target will not be met. Now, it may be politically undesirable to change that target, but isn’t that better than holding on to an unrealistic target?
Chalmers:
First of all, we’ve made it clear – myself, Clare O’Neil the Housing Minister, her predecessor, the Prime Minister, and others have made it clear that this is a very ambitious target. It will be difficult to hit this housing target, but we make no apologies for being ambitious about housing because, for too long, it’s been put in a too‑hard basket.
We found tens of billions of dollars in investment, we’re working with the states and territories, the industry, the investors. We’ve made changes already. We saw a welcome tick up in dwelling investment in the most recent National Accounts, and we need that to continue if we’re to build the houses that Australians need.
Ferguson:
But let’s talk about this more frankly, Treasurer, because this is not about Treasury suggesting or recommending that you be less ambitious. It is saying to you bluntly that the target must be changed. So, you’re not prepared to listen to that advice?
Chalmers:
Well, I think I’ve been plenty blunt in saying, Sarah, that we’re going to need to do more and do better in order to hit that ambitious target. And I’d caution you against making assumptions about what the rest of the incoming government brief says. We speak on behalf of the government. We get advice from the Treasury. We take that advice very seriously.
But it’s up to the government to determine its policies. We do have an ambitious target and I have said bluntly today, on at least half a dozen other occasions, I’ve said again tonight, it will be hard to hit this target. That doesn’t mean we shouldn’t have an ambitious target. It means we will do more and we will do better in order to try and hit it.
Ferguson:
Treasurer, thank you very much indeed for joining us.
Chalmers:
Appreciate it. Sarah, thank you.