Treasurer hints at possible changes to tax system
Treasurer Jim Chalmers has signalled the government could consider changes to corporate tax rates to encourage business investment “if we can afford to do it”.
Speaking to the ABC’s Insiders program on Sunday after last week’s three-day economic reform summit, Chalmers also hinted at broader tax reform but stressed that no decisions had been finalised. He said the point of the summit was to inform government thinking over the next three years.
Treasurer Jim Chalmer says it’s up to cabinet to determine timing for tax reform.Credit: Alex Ellinghausen
The summit heard from some of the country’s most senior business and union leaders, as well as examining proposals such as the Productivity Commission’s proposed 5 per cent cashflow tax on big business to fund lower taxes for small and medium-sized businesses.
Asked about the Productivity Commission’s call to reduce corporate tax rates to encourage businesses to invest, which would be offset by a new net turnover tax on big firms, the treasurer did not give a definitive answer but added that “I am open to tax changes which incentivise investment if we can afford to do it”.
Chalmers said ensuring a “fair go” for future generations of Australians was central to the government’s thinking as he deflected questions on whether tax breaks for retirees could be wound back in forthcoming budgets.
“We have taken, I think, some important steps to make the tax system fairer, primarily when it comes to income taxes. Cutting them last year, cutting them next year, cutting them the year after. And I think that establishes our bona fides,” Chalmers told Insiders host David Speers.
“[And] from budget to budget, we do consider additional steps. The best way to do that is to do that in a consultative way.”
Chalmers insisted there was “a lot of ambition in the government for policy reform, from the prime minister down”.
“Our primary focus is on delivering tax reform in all of those ways we took to the election, as I keep mentioning: income tax cuts, considering road-user charging, the standard deduction. These are important features of our existing tax agenda,” he said.
“I think there are more steps to be taken on tax reform ... we’ve got some time to do that. The roundtable was never about finalising tax policies, it was about informing tax policies for the next three budgets and beyond, and that’s the approach I take to it.”
Shadow treasurer Ted O’Brien on the final day of the Economic Reform Roundtable.Credit: Dominic Lorrimer
Chalmers was repeatedly asked if the tax breaks retirees enjoyed were fiscally sustainable and whether further changes could be made, in addition to the already flagged curbing of tax breaks with a superannuation balance of more than $3 million, but said no further changes were being contemplated.
He said the summit did not examine in detail possible changes to the current rate of the GST, while road-user charging – which the federal and state governments are contemplating introducing – would apply only to electric vehicles because these vehicles did not pay the fuel excise that petrol and diesel cars paid.
Shadow treasurer Ted O’Brien told Sky News that he had urged Chalmers, during the summit, to “stop the spending spree” by the government and put in place rigid fiscal rules to control spending.
“Jim Chalmers has thrown out the rules that control budget spending, and that is what has led to the increase in spending. And I went through some of the statistics, some of the concerns I’ve got,” O’Brien said.
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