17 November 2022

Virtual address to the Institute of Public Accountants


I acknowledge the Tharawal people of the Illawarra from where I am speaking today and pay respects to their elders past and present.

I reaffirm the Albanese Government’s commitment to the Uluru Statement from the Heart and a voice to Parliament.

I warmly welcome any First Nations Australians present with us today.

Thanks so much to Andrew Conway and his team for welcoming me here today. It’s great to be here.


Seven months ago, the Albanese government was elected with a mandate to be a better government.

To end the waste, to address the record debt and to put economic growth on a stable and sustainable footing.

Millions of Australian families are counting on our government to fulfil that mandate.

And we are already executing our plan.

We are getting wages moving again, supporting an increase to the minimum wage and strengthening our industrial relations system.

Our childcare reforms are giving 1.2 million working families the option of taking on more hours and earning more money.

Our aged care reforms are delivering more nursing care, more nutritious food and better pay for those who look after our seniors.

Our responsible targeted investments prioritise measures that provide an economic return, not a political payoff as our predecessors did.

Fixing the Budget

Good policy starts with an honest conversation about the facts.

There are challenges. Big challenges.

We’ve inherited a trillion dollars in debt – the interest payments on it are the fastest growing area of expenditure.

That debt will grow and grow if we don’t address the deep structural deficit in the budget.

Australians expect us to defend our nation, provide world class healthcare, care for our elderly, and support people with disabilities to live a dignified life.

We are committed to this, but we also have to be responsible. That’s why:

We have conducted an audit of waste and inefficient spending. This recovered $22bn which has been redirected.

We have increased our compliance effort to ensure money owed under existing law is paid, investing in resourcing the tax office to crackdown on the shadow economy and tax avoidance.

Our tough new approach to multinational tax avoidance that will collect billions more in taxes.

Rather than spend short term revenue increases on ongoing programs we have returned over 90 per cent of $124bn in windfall tax receipts to budget repair.

These measures will make a difference.

But alone they are not enough.

We have to explore measures that put the country on a path to sustainability.

Sometimes this raises criticism – like our plan to align the tax treatment of off‑market and on‑market share buy‑backs.

Protecting the Integrity of the Tax System

Today we are releasing draft legislation on this budget measure for public consultation.

Our changes are about system integrity and fairness.

They close a loophole which allows large corporations to buy back their shares at below market price using their excess franking credits.

Before I say something about sustainability – let me be very clear about one thing.

Franking Credits will stay – end of story, full stop.

This policy is not about changing franking credits.

Ordinary mum and dad investors will continue to receive their franked dividends.

And they can still participate in share buy backs.

Our change is only to align the tax treatment of on‑market and off‑market trades.

That is fair and as it should be.

This measure strengthens the integrity of our system.

It will ensure there is one simpler, clearer way of taxing share buy backs.

And it ends an unintended incentive for corporates to buy back shares off‑market instead of on‑market.

It is not what dividend imputation was designed for and it is not fair – not to shareholders and not to taxpayers.

Dividend imputation is there to give companies a way of allocating tax credits to their shareholders when they distribute franked dividends.

That purpose will remain.

It is not there for corporations to exploit the tax treatment, at taxpayer expense, of off‑market share buy‑backs..

Such deals can give preferential tax treatment to large institutional investors and often run into the billions of dollars.

Though relatively rare, averaging one or two a year, when they do happen there is a very big budget impact.

In 2018 BHP did an off‑market trade with some of its large investors to buy back $8.5 billion worth of shares.

The market price on the ASX was $32.14, but BHP only paid $27.64 off‑market.

This year Westpac employed the same mechanism to get a discount on its $3.7 billion off‑market share buy‑back.

And last year Commonwealth Bank got a discount on its $7bn off‑market share buy‑back.

To be clear, this is not a criticism of the companies or the funds that have taken advantage of the loophole.

It’s not illegal, and corporations will still be able to issue special dividends.

We estimate this measure will save the budget on average $200m a year.

Budget repair is challenging, there are no easy choices.

But we remain committed to improving the budget to ensure fiscal policy remains responsible and takes the pressure off the cost of living for families.


This is a different approach to government to the one that Australians endured before the election.

Speaking frankly, honestly about the state of the budget and the economy and helping Australians understand the choices that we face.

The election showed Australians expect parliament to act in their long‑term interests and we will do that.