Speaker 1: Hi, I'm Daniel James and you're listening to seven AM.
Speaker 1: Labour is laying in the groundwork for a major overhaul
Speaker 1: of Australia's tax system. In just over a week, a
Speaker 1: handpicked group of people from business, unions and government will
Speaker 1: gather in Canberra for an economic roundtable. Already, a range
Speaker 1: of ideas are being touted for debate, from lowering company
Speaker 1: tax rates to rethinking negative gearing and a carbon tax.
Speaker 1: The Prime Minister is watching carefully to see which ideas
Speaker 1: gain traction and which are political poison before claiming them
Speaker 1: as part of his own agenda. Today Press Gallery journalist
Speaker 1: Karen Middleton on Anthony Albaneze's long game and the way
Speaker 1: he wants to change the economy to change the country.
Speaker 1: It's Friday, August eight.
Speaker 2: Making our way forward depends on what all of us
Speaker 2: can work together to achieve, and that's why I've asked
Speaker 2: the Treasurer Jim Charmers to convene a round table to
Speaker 2: support and shape our government's growth and productivity agenda.
Speaker 1: Karen. Later this month, Jim Chalmers is locking business groups,
Speaker 1: unions and NGOs in a room for three days. The
Speaker 1: Government's talking about it as a major part of their
Speaker 1: plans for economic reform. So how will it work and
Speaker 1: what are they hoping to get out of it?
Speaker 3: Yeah, well they're locking them in the cabinet room, no less,
Speaker 3: in the middle of Parliament House. Now, this concept, the
Speaker 3: Productivity round Table, which has been renamed the Economic Reform
Speaker 3: round Table, was the brainchild of alban Easy and Charmers together.
Speaker 3: It seems it's not clear exactly whose idea it was initially.
Speaker 3: I think the Prime Minister has taken some credit for it.
Speaker 3: But the underlying theme really is to come up with
Speaker 3: an agenda for economic reform that really goes beyond what
Speaker 3: they've already said they'll do.
Speaker 2: We want to build the broadest possible base of support
Speaker 2: for further economic reform to drive growth. But it's productivity,
Speaker 2: strengthen the budget and secure the resilience of our economy
Speaker 2: in a time of global uncertainty.
Speaker 4: It's a three day meeting.
Speaker 3: The first day is titled Resilience, Day number two is
Speaker 3: about productivity, and day number three is budget sustainability and
Speaker 3: tax architecture. Now, we saw a guest list put out
Speaker 3: in July kind of representatives of various sectors. So you've
Speaker 3: got business the public sector, people from think tanks, the
Speaker 3: unions will be there, and people with expertise and energy
Speaker 3: and in the care sector.
Speaker 2: And I expect that there'll be a whole range of
Speaker 2: viewers put forward, much of which is contradictory with each other.
Speaker 4: So it's a good spread of people.
Speaker 3: But also the government has said they need to gather
Speaker 3: consensus before they.
Speaker 4: Get in the rooms.
Speaker 3: So the treasure in the Prime Minister are trying to
Speaker 3: marshal consensus behind various ideas, and they've laid out some
Speaker 3: conditions for the ideas that come forward, and one of
Speaker 3: those key conditions is they can't be a cost to
Speaker 3: the budget bottom line.
Speaker 2: What we want is a focused dialogue and constructive debate
Speaker 2: that leads to concrete and changeable action.
Speaker 1: Can you tell me about some of those ideas that
Speaker 1: are being floated publicly already and why it's significant that
Speaker 1: it's unfolding that way and there's a condition on that.
Speaker 4: Yes, it's interesting.
Speaker 3: The government lined up the Productivity Commission to roll out
Speaker 3: a series of papers covering a number of the themes
Speaker 3: that it wants to tackle. The first one, that talked
Speaker 3: about tax, had some controversial ideas, including a cash flow tax,
Speaker 3: we've seen some proposals around the environmental taxation that isn't
Speaker 3: just a straight rerun of a carbon tax, but would
Speaker 3: have a number of other dimensions to it with an
Speaker 3: eye to the transition to more sustainable energy.
Speaker 4: And most recently we've.
Speaker 3: Seen a paper from them on artificial intelligence, and that's
Speaker 3: ruffling a few feathers because there was a suggestion in
Speaker 3: that paper that perhaps there shouldn't be.
Speaker 4: Too much regulation on AI as far as.
Speaker 3: Building language models and training AI by feeding it works
Speaker 3: that might be copyrighted.
Speaker 4: So that's causing some upset.
Speaker 3: Business clearly is keen on getting some industrial changes. The
Speaker 3: Union movement has resubmitted proposals to address concessions for property investors,
Speaker 3: so negative gearing and the discounts for capital gains tax.
Speaker 3: And will remember that was controversial for the Labor government
Speaker 3: because it was a proposal put forward in opposition, but
Speaker 3: they lost the election and they've been very reluctant to
Speaker 3: embrace getting rid of those kinds of tax concessions ever since.
Speaker 3: So there's a range of these kinds of ideas coming forward.
Speaker 3: It's probably a bit bamboozling for the general public. And
Speaker 3: at the moment we're not getting a hugely clear indication
Speaker 3: of which those are likely to have consensus behind them,
Speaker 3: And you do get the feeling that the government is
Speaker 3: sort of watching to see what the public reaction is
Speaker 3: to various things before it locks itself in behind anything too.
Speaker 1: So what sense do you have, Karen, as to whether
Speaker 1: the Albanezer government is genuinely canvassing new ideas versus staging
Speaker 1: a conversation where they already know their intended outcome.
Speaker 4: Well, it's an interesting question, isn't it.
Speaker 2: Well, the government will make decisions and the roundtable isn't
Speaker 2: a substitute for government decision making.
Speaker 3: There was a complaint from some in the business community
Speaker 3: after the Jobs and Skills Summit that they put on
Speaker 3: in the first term that some of them felt that
Speaker 3: they'd been used a little bit. They felt like the
Speaker 3: outcome was actually preordained. I don't think we're in that
Speaker 3: position this time. But you obviously have a government that
Speaker 3: had a limited agenda going into the election and it
Speaker 3: made a lot of the point.
Speaker 4: That it was doing what it.
Speaker 3: Said it would do, and it got re elected on
Speaker 3: that basis as well. So they are trying to create
Speaker 3: momentum behind economic reform that they weren't able to tackle
Speaker 3: in the first term of government. I think they're genuinely
Speaker 3: looking for ideas, but I think they also have a
Speaker 3: few of their own, and they're going to try and
Speaker 3: steer the conversation in that direction.
Speaker 1: After the break. Does the government have the stomach for
Speaker 1: big changes?
Speaker 5: But at the end of the day, it's the treasure
Speaker 5: is going to be spending your political capital from the
Speaker 5: election campaign. How much are you willing to see done here?
Speaker 5: Are you willing to take a really significant reform agenda
Speaker 5: from this roundtable?
Speaker 2: Be very clear, it's not a meeting at the cabinet.
Speaker 2: We just have one of those to meeting in the
Speaker 2: cabinet room.
Speaker 1: So, Karen, this roundtable is really about the Urbanezi governments
Speaker 1: turning out its agenda for the next term. They have
Speaker 1: a huge mandate and figuring out what to do with it.
Speaker 1: Do you think they have an appetite for ambitious reform.
Speaker 3: I think they have an eye to reform that would
Speaker 3: be lasting. So if you look at the last term
Speaker 3: of government, they were elected as a global financial crisis
Speaker 3: and a cost of living crisis in particular was becoming
Speaker 3: full blown in the wake of the COVID pandemic, and
Speaker 3: that really restricted the kinds of things that they could do.
Speaker 3: They had to be seen to be addressing people's household needs,
Speaker 3: and so they didn't focus as much on longer term
Speaker 3: structural reform of the economy.
Speaker 4: They focused more on relief for households.
Speaker 3: But now they've been re elected, the economy seems like
Speaker 3: it's turning around, interest rates coming down, people are starting
Speaker 3: to feel more positive, so they want to do something
Speaker 3: that is going to reshape the economy. They've also got
Speaker 3: a huge problem with things built into the economy that
Speaker 3: cost an enormous amount of money, like the Medicare system,
Speaker 3: like the PBS Pharmaceutical Benefit scheme, like the National Disability
Speaker 3: Insurance scheme, and they have to find ways to pay
Speaker 3: for it. What we're not sure about is whether they're
Speaker 3: inclined to cut back or misspending, or whether they're really
Speaker 3: just looking for revenue raising measures to help pay for
Speaker 3: what they want to do well.
Speaker 1: It's likely to require some form of tax reform, and
Speaker 1: of course it's impossible to talk about tax reform without
Speaker 1: the ghost of the twenty nineteen election being raised. Many
Speaker 1: of the topics that are going to be discussed were
Speaker 1: contentious for labor during that election. How is the government's
Speaker 1: layering around some of those thornier issues changed. I'm thinking
Speaker 1: about things like negative gearing and capital gains tax for instance.
Speaker 3: Yeah, So when we heard the ACTU come out with
Speaker 3: that proposal again on the weekend, everybody looked to how
Speaker 3: the government reacted, and the Treasurer was not really kiboshing
Speaker 3: it completely. He was saying things like that the unions
Speaker 3: are entitled to put forward their ideas and he's been
Speaker 3: encouraging kind of a thousand flowers to bloom and people
Speaker 3: to come forward with their ideas, provided that they fit
Speaker 3: in with all the criteria that they've laid down, the
Speaker 3: kind of guardrails they've put around this about building consensus.
Speaker 3: But since then we've heard that the Health Minister and
Speaker 3: then the Prime Minister start to suggest that they don't
Speaker 3: have any great plans to change the tax system.
Speaker 6: You know, I've said what our tax policy is, it's
Speaker 6: very clear what it is.
Speaker 3: What is starting to emerge is a message that the
Speaker 3: government is going to stick largely to the tax agenda
Speaker 3: that it has for the time being, but that may
Speaker 3: not rule out some changes going into the future.
Speaker 6: Is likely be he showed by the upcoming round table
Speaker 6: power that can put forwardever idea they want. And what
Speaker 6: you're saying is five or six ideas coming forward today.
Speaker 6: That's a good thing. That's a good thing. It's not
Speaker 6: government policy. Think government policies decided around a cabinet table.
Speaker 3: The thing is, if they're not going to make changes
Speaker 3: to tax, it's not very clear how exactly they can
Speaker 3: raise revenues, So it seems impossible to do that without
Speaker 3: tackling some substantial things around tax. Certainly, the Prime Minister
Speaker 3: has been pretty direct on the subject of the Goods
Speaker 3: and Services tax, he does not want to muck around
Speaker 3: with that. But beyond that, it's very hard to tell.
Speaker 3: And as I say, the messages are a little unclear
Speaker 3: with two weeks to go, how willing the government is
Speaker 3: to tackle some of those more difficult tax questions.
Speaker 1: Yeah, I guess one of the reasons the government's been
Speaker 1: coy about some of these bigger reform issues is that
Speaker 1: there's still a lot of debate as to whether shortens
Speaker 1: ambitious reform agenda was actually poisonous, or if people just
Speaker 1: didn't like he was selling it. So what sense do
Speaker 1: you have, Karen as to whether there's public appetite for
Speaker 1: BEG changes.
Speaker 3: Well, I think people understand that the economy needs to
Speaker 3: modernize and move with the times. We're seeing huge advances
Speaker 3: in technology with artificial intelligence and the like, and that
Speaker 3: does present huge opportunities. So I think people understand that,
Speaker 3: but there's always caution about change, and the lesson that
Speaker 3: the government has learned, well labor has learned when it
Speaker 3: was in opposition and in government.
Speaker 4: Is you shouldn't get ahead of people.
Speaker 3: So whatever they decide to do, they're very, very focused
Speaker 3: on making sure that they take people with them. Now
Speaker 3: there is a lot of emphasis coming out of the
Speaker 3: government that what really needs to be addressed in the
Speaker 3: housing area is supply more than demand, and these tax
Speaker 3: changes about negative gearing and capital gains tax would be
Speaker 3: more focused on demand. But there's also an acknowledgment if
Speaker 3: you talk to some people, that these issues do need
Speaker 3: to be dealt with at some point. So the question
Speaker 3: is when and whether this government, with this mandate that
Speaker 3: it now has the size of its majority, whether that
Speaker 3: is enough for it to be prepared to have a
Speaker 3: look at how it could be the one to make
Speaker 3: these changes.
Speaker 1: And finally, Karen You've said that Alberdezi is someone who's
Speaker 1: always thinking a long way ahead. So what do you
Speaker 1: think his long term vision is here? How would you
Speaker 1: like to change Australia.
Speaker 3: Well, I think he'd say he wants to make a
Speaker 3: better and fairer Australia and to reshape the economy to
Speaker 3: make it sustainable and create opportunities for all kinds of people,
Speaker 3: regardless of what their personal upbringing and economic circumstances are.
Speaker 3: What he does tend to do, in my experience, though,
Speaker 3: is to set a sort of a policy goal destination
Speaker 3: that he doesn't necessarily reveal, and then take steps towards that.
Speaker 3: And you won't always see where he's trying to get
Speaker 3: through along the way until he's a fair way down
Speaker 3: the track.
Speaker 4: And I suspect some of this economic planning is about that.
Speaker 3: It's about creating an economy that is sustainable, that can
Speaker 3: pay for itself, and introduce a policy that cares for
Speaker 3: people and can't be easily undone. And he's also got
Speaker 3: to tackle this huge question of climate change and once
Speaker 3: and for all make some changes to get the energy
Speaker 3: transition complete. So there's a range of things that are
Speaker 3: I think he is probably in his mind, and he'll
Speaker 3: be looking at small steps that are acceptable to the public,
Speaker 3: saleable to the public in a political sense, but that
Speaker 3: will help set a course to ultimately get to this
Speaker 3: better and fair Australia that I think he's looking for.
Speaker 1: Karen, thank you so much for your time.
Speaker 4: Thank you.
Speaker 1: Also in the news, US President Donald Trump said reciprocal
Speaker 1: terrorists have taken effect. Last week, the United States introduced
Speaker 1: a rap renewed tariffs on training partners, but kept taxes
Speaker 1: on Australia exports at the baseline rate of ten percent.
Speaker 1: Donald Trump has also threatened India with a fifty percent tariff,
Speaker 1: which will take effect on the twenty seventh of August
Speaker 1: unless it stops buying Russian oil. Meanwhile, Health Minister Mark
Speaker 1: Butler is planning to speed up medicine approvals as the
Speaker 1: US president threatens to put tariff's on two hundred and
Speaker 1: fifty percent on pharmaceutical products. Mark Butler said Trump's threat
Speaker 1: wouldn't affect a discount Australians received through the PBS, but
Speaker 1: says he's seeking ad vice about accelerating the approvals process
Speaker 1: for new drugs in Australia. Thanks for listening to seven am.
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