Chalmers revs up road user tax as he cites quick wins from roundtable
By Paul Sakkal, Shane Wright, Millie Muroi and Nick Newling
Treasurer Jim Chalmers has revealed plans to slap EV drivers with road-user charges within months and to revamp environmental protection laws to accelerate the development of houses, mines and renewable energy projects, as he declared the tax system defective.
At the end of the government’s three-day economic roundtable, Chalmers confirmed a checklist of more than 30 areas – most of which had been known before the start of the discussions – that he and other ministers will move on, some within days.
Since Tuesday, more than 30 hand-picked experts, including representatives from business groups, unions, academia and community organisations, have sat in the cabinet room discussing issues ranging from the state of the budget to the cost of small tariffs on imported goods.
Chalmers, who declared the roundtable a success, said the government would move on several “quick wins” to help lift the living standards of all Australians, improve the budget bottom line and make the economy more resilient.
One of the first actions will be to get state and territory government agreement on road user charges to help make up for the looming collapse in fuel excise due to the rise of electric vehicles.
Chalmers and NSW Treasurer Daniel Mookhey were working on options for the proposed charges that will go to a meeting of all the nation’s treasurers on September 5.
Treasurer Jim Chalmers speaking after the final day of the economic roundtable.Credit: Dominic Lorrimer
“There was more than the usual amount of consensus in a conceptual way around road user charging, a lot of reform appetite in that area,” he said, but conceded there wasn’t agreement on a final model.
Another change expected quickly is the long-running overhaul of the Environmental Protection and Biodiversity Conservation Act, which both sides of politics have failed to improve over recent years.
Critics from developers and conservationist organisations have long complained about the current act, especially the delays it has created. In NSW, the average time to approve a wind farm is now 9 years.
Chalmers said Environment Minister Murray Watt would accelerate the introduction of changes to the EPBC Act, in line with a review of the law finished by former competition watchdog boss Graeme Samuel in 2020.
“I don’t want to preempt the work that we’ve asked [Watt] to do. We’ve asked him to accelerate it. He’s made a heap of progress, and it feels like that, that hard work that he’s put into it is, is, is bearing fruit,” he said.
Major tax reform, a perennial priority for many economists, was ruled out by Prime Minister Anthony Albanese before the roundtable, spurring accusations from the opposition that the government lacked ambition.
Chalmers used the summit to broaden the horizons of the government on tax, declaring that Australians paying income tax and younger people were not getting a fair deal.
He also said the Treasury would begin working with roundtable stakeholders on how to boost business investment, raising the prospect of both income and company tax cuts later this term.
Chalmers said it was a decision for the cabinet, not just him, on whether tax changes could be announced before the next election.
“I think our tax system is imperfect, and one of its most troubling imperfections is best seen through an intergenerational lens,” Chalmers said.
“Almost everybody around the table had a similar view, which is why we take our responsibilities to the coming generations seriously.”
During the final day of discussions, which was dominated by tax debate, Grattan Institute chief executive officer Aruna Sathanapally said there was huge inequality in the tax system, which only the federal government could address.
“The problem has always been a political one: the noise that attends any suggestion that tax breaks be withdrawn. As a result, the dysfunction of this system has only worsened with time,” she said.
Grattan Institute CEO Aruna Sathanapally told the roundtable the current tax system was failing the country and particularly young Australians.Credit: AFR
After 29 hours of discussions the roundtable came up with 10 reforms where there was broad consensus, 10 others that would be referred directly to ministers, and 10 other areas that required further research.
Consensus was made on issues such as improving the operation of the federation, building more homes and how to better use AI.
Items to go to ministers include the abolition of “hundreds” of so-called nuisance tariffs, a reduction of red tape in the national construction code and stripping out burdensome rules imposed by official regulators.
The Productivity Commission will look at ways to measure the sheer volume of regulation and how to measure its reduction, while Chalmers signalled a broadening of national competition policy to which the government has already pledged $900 million in possible payments to the states.
Allegra Spender, the only independent MP to attend the forum, said the move on tax was a major step forward for young people.
“For the last three years I have been pushing the parliament to put tax reform on the agenda, to help young Australians achieve the same milestones as their parents, and drive productivity and investment in our businesses,” she said.
“Today the treasurer announced that the government will start to work on these objectives, and I am delighted.”
Credit: Matt Golding
Commonwealth Bank chief executive officer Matt Comyn, who attended all three days, said people had come to the meeting with open minds.
“It was a terrific opportunity to roll up our sleeves on some of the big issues, with the goal of making sure Australia’s economy is strong for generations to come,” he said.
Shadow treasurer Ted O’Brien, the opposition’s representative at the meeting, said the government had to take responsibility for the state of the budget and get spending under control.
“There is a spending spree which is not sustainable. The government has thrown away the rule book. The government needs to re-introduce rules to control spending,” he said.
Economist Saul Eslake said some of Chalmers’ changes were worthwhile, but it wasn’t clear if Labor would tackle bigger problems.
“I think it was OK. I don’t think it set the world alight but they’ve now got a menu of things they can work with, some of which have a reasonable chance of making a difference in things like housing and maybe labour mobility between now and the election,” Eslake said.
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