Sarah Ferguson:
Jim Chalmers, welcome to 7.30.
Jim Chalmers:
Thanks Sarah, always happy to be the warm‑up act for Jacob Greber.
Ferguson:
Well, thank you for that. Now obviously there’s a lot to get through, but let me start with tax. You’ve acknowledged the tax system is fundamentally unfair to younger workers compared to older Australians. How do you plan now to fix it?
Chalmers:
I think one of the clear areas of consensus out of the Economic Reform Roundtable is that when we look to reform the tax system, one of the most important objectives is to make it fairer in intergenerational terms, and when I was asked about this earlier today, I agreed that the tax system is imperfect, there’s a number of ways that we are looking to improve the tax system, cut taxes for working people, work on the multinational tax agenda, road user charging. There’s an agenda there, but one of the most important areas where there was common ground is that when we reform the tax system, we’ve got to make it fairer to the generations that follow us.
Ferguson:
You said you don’t need a tax review like the Henry Tax Review in the past. That tells us that beyond those you’ve already talked to us about, you have additional tax measures in mind. What are they?
Chalmers:
Well, I want to be respectful to the contributions that people made over the course of the last 3 days, and especially today. The government’s policies on taxes haven’t changed, our priority is to cut income taxes 2 more times in ways that we legislated, in ways that were contested at the last election. That is the government’s priority. We’ve said we’re working on road user charging for EVs and that’s an important priority as well.
The government’s policies haven’t changed in these key areas. What we have done is we have listened very genuinely, we’ve consulted with people who have a view about the tax system; experts, business leaders, union leaders, economists, academics and others. There is a view that if there is to be more tax reform that there are 3 ways that we need to go about it.
First of all, that intergenerational lens, particularly as it relates to a fair go for working people; secondly, attracting more business investment in an economy where that is a challenge; and thirdly, making our system simpler and more sustainable to fund the services that we need increasingly in the context of an ageing population.
Those are the objectives which were agreed at the roundtable today. Progress against those objectives is really a matter for the Cabinet. I want to be respectful of the Cabinet colleagues, and as we advance the various agendas put to us today and over the last 3 days, the Cabinet will be key.
Ferguson:
Look, with such a frank acknowledgement of the unfairness in the system, the inequity in the system and how that affects younger Australians, let me put this simply: have you fired a shot now across the bows of wealthy retired baby boomers living off property investments, and the very generous tax treatments that they enjoy? Are you telling them that these are now coming to an end?
Chalmers:
I wouldn’t put it like that, Sarah, what I would say –
Ferguson:
How would you put it?
Chalmers:
Well, if you look at the tax changes I’ve made already as Treasurer, that the Prime Minister’s government has made, they’ve been all about making sure that when it comes to income tax cuts, for example, that those income tax cuts are made available to younger workers and women, people right up and down the income scale, not just people who are already doing very well.
So there’s an intergenerational lens already being applied to those tax changes that we have made, and to a number of other areas, including the tax breaks for Build to Rent, for example, trying to get more rental stock into the system so people can find somewhere decent to rent at affordable prices, and that work is ongoing.
So already we’re applying an intergenerational lens. One of the things that was very clear out of the Economic Reform Roundtable, there was a lot more common ground than I was anticipating, to be candid, but one of the areas where the common ground was most obvious was that if and when we consider next steps in tax reform, we have to care about the intergenerational aspects, and that feedback from the group today, from my point of view, is very welcome.
We’ve made some progress on that front, there’s always more to do, and we’ll make sure that we work through the proposals and the ideas and the directions put to us in a respectful, considered and methodical way.
Ferguson:
Let me just get clear. Does this mean – can I get clarity on that – does this mean that you will now consider asking retirees to pay tax on earnings and withdrawals to reduce the capital gains discount, and as Treasury have wanted for a long time, crack down on family trusts?
Chalmers:
We haven’t taken a decision on any of those things. We haven’t changed our policy or our position on each of the issues that you raised. You know that we’ve already got policies and legislation that’s been in the parliament for a couple of years now when it comes to making superannuation tax concessions still concessional, but more sustainable.
And so again, I point you to our record in some of these areas. We haven’t taken any decisions to change our policies, we haven’t changed our policies as a consequence, it’s a matter for Cabinet.
But I do want to say again, Sarah, in the most respectful way that I can, the reason I brought these people together for 3 days, over 29 hours, as you rightly pointed out in your introduction, is because we believe that the best way to make progress in our economy and when it comes to economic reform of all kinds is to try and do that together, to listen where we can and include people where we can, and a lot of the work that people put to us will be ongoing. It won’t just end at 5 o’clock earlier this afternoon.
Ferguson:
Does this mean though, with what you’re saying, this is a matter for Cabinet and Cabinet will address this fairness issue, does that mean that the government can make decisions on changes to the tax system ahead of the next election?
Chalmers:
First of all, I think I’ve been really clear, as has the Prime Minister, and I was clear behind closed doors as well, that the group we brought together for 3 days was not to replace decisions taken by Cabinet, it was to inform decisions taken by Cabinet.
This was 3 days in August of 2025 to inform the next 3 budgets and beyond. Now we’ve made it clear as a government, and we’ve put policy action behind these views, in tax reform already when it comes to those income tax cuts, and in the other areas I’ve mentioned, that where we can make the tax system fairer, we will, but we’ll do that in a considered and methodical way. We haven’t changed our policy on any of those issues that you raised –
Ferguson:
Okay.
Chalmers:
– and any futures changes would be considered by the Cabinet in the first instance.
Ferguson:
On regulation, you say you want benchmarking, the crucial issue of regulation which goes to productivity. Will you set a target for the reduction in red tape, like the UK government has – something like 25 per cent by 2030 – will you do that?
Chalmers:
There’s a lot of enthusiasm for better regulation, to cut red tape where we can, get compliance costs down, and we did specifically discuss the UK proposal, and other proposals around the world. We’re going to ask –
Ferguson:
Do you like a target? Do you want a target?
Chalmers:
We’re going to ask the Productivity Commission for some help on benchmarking and targets. Those targets are not always the best designed targets, I make no comment on how other governments around the world are going about it, but if we’re going to have a target, it needs to be a good one, and so we’ve asked the PC to give us a hand with that.
But regardless of the advice we get from the PC, one of the big directions today is better regulation, cutting compliance costs, cutting red tape, making sure we’re not getting in our own way, this is one of the most important ways we make our economy more productive.
And what that means for people watching your program, Sarah, is building more homes more quickly, lifting living standards, sustaining the progress we’re making on real wages. That’s what a more productive economy means for real people in real communities – they are front and centre. One of the ways we go about that is to regulate our economy more effectively.
Ferguson:
Let’s talk about the road user charges, as floated before the roundtable. You say now that it’s a tax whose time has come. What level of revenue would you expect it to raise?
Chalmers:
Well, it depends on the model and it depends on the timing, and both of those decisions are yet to be taken. Again, important role for Cabinet and colleagues, like Catherine King and Chris Bowen, and others, the Prime Minister, the Finance Minister.
But in the first instance, I’m going to work with the states on an options paper that they are writing, they’ve got an interest here, and I’m going to convene the state and territory treasurers on 5 September. We’re putting this on the agenda to work through options.
There was a lot of appetite around the roundtable today for a form of road user charging for EVs, but not yet a consensus on the model or on the sequencing and timing of that, and until you know those things, you don’t know the sorts of revenue that you would be thinking about raising.
Ferguson:
You said you’re going to ask Environment Minister Murray Watt to speed up his action on reforming the EPBC, the Environmental Act. What does that mean in detail? What are you anticipating, what do you want from Murray Watt in terms of timing?
Chalmers:
Well, Murray’s done a heap of good work here, and he’ll have more to say about it in the next week or 2, and I don’t want to steal his thunder, frankly, but one of the areas where we made a lot of progress yesterday was in working out the – or getting around some of the remaining issues. My understanding is that he is relatively close to finalising those consultations –
Ferguson:
What does ‘relatively close’ mean?
Chalmers:
– which have been so important.
Ferguson:
Can you just put a timeline on that for me?
Chalmers:
I won’t do that, Sarah, because I’m respectful of Murray and his work, and I don’t want to steal his thunder, but I’ve had conversations with him. He was in the Cabinet Room for part of the roundtable as well, so that he could hear these views directly.
I’ve got a lot of confidence that we can move a bit more quickly than what we had earlier anticipated; that’s because of his good consultative work, and I leave it to him to talk more about it when he’s ready to do that.
Ferguson:
Can we expect changes that allow super funds to invest in housing?
Chalmers:
I’m going to have another look at the performance test in super. I want to make it clear to your viewers there’s absolutely no chance I’ll abolish it, and there’s absolutely zero chance that I will interfere with the super funds’ primary purpose, which is to maximise returns for its members, the working people of this country.
With those 2 conditions, I am prepared to have another look. There’s a compelling case being made to us that the way that the performance test works might be an unnecessary barrier to super funds investing more in areas like housing or energy, and we don’t want to see those unnecessary barriers if they are genuinely unnecessary. So I committed to the group that I would have another look at that, and I will.
Ferguson:
Just overall, this is a huge number of topics and areas that I referred to at the beginning. You’re looking for more than a percentage point increase in productivity. When and how should we judge the results?
Chalmers:
Well, we’ve got to chip away at this problem over time. Danielle Wood has said this, I think, in a really compelling way, the PC Chair, she’s pointed out that this productivity challenge is a big part of our economy for a long time now, it’s part of comparable economies around the world. You can’t turn it around quickly. If there was a switch you could flick to turn around our productivity performance, somebody would have flicked it already. It requires sustained, hard, collaborative and consultative work, and that’s what the roundtable was about, but that’s what our government’s about as well.
To shift the dial on productivity, we’ve got to do a lot of things simultaneously, and I’m pleased that the interpretation that you took from the progress we talked about after the Economic Reform Roundtable is that we are acting on a lot of fronts. That is genuinely the case.
Ferguson:
Treasurer, thank you very much indeed for joining us after a long 3 days. Thank you.
Chalmers:
Appreciate it.