WEBVTT - Albo’s Pauline-powered backflip

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<v Speaker 1>From The Australian. Here's what's on the front. I'm Claire Harvey.

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<v Speaker 1>It's Friday, June nineteen, twenty twenty six. Brittany Higgins has

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<v Speaker 1>failed to account for more than one million dollars of

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<v Speaker 1>the two point four million she received in a Commonwealth

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<v Speaker 1>compensation payout. That's the finding of a trustee in bankruptcy

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<v Speaker 1>who says there's virtually nothing left of her payout. That's

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<v Speaker 1>an exclusive live now at the Australian dot com dot au.

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<v Speaker 1>It's the four hundred and seventy five million dollar backflip

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<v Speaker 1>that might make things worse. After the most bruising five

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<v Speaker 1>weeks of his prime ministership, Anthony Albanezi has announced four

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<v Speaker 1>big and very complicated changes to the controversial capital gains

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<v Speaker 1>tax and death tax measures in the budget. But will

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<v Speaker 1>it be enough to quell the fury of young investors

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<v Speaker 1>and entrepreneurs who feel the governments let them down. Greg

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<v Speaker 1>Brown is here in just a moment, we.

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<v Speaker 2>Back Australian small businesses and the important role that they

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<v Speaker 2>play in Australia. It's always contested, it's always contentious, but

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<v Speaker 2>it will be worth it, and genuine reform is often

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<v Speaker 2>difficult but it's the right thing to do, done for

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<v Speaker 2>the right reasons.

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<v Speaker 1>Greg Brown is The Australian's chief political correspondent, and Greg

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<v Speaker 1>will we expecting Anthony Albanezi and Jin Chalmers to stand

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<v Speaker 1>up on Thursday morning and make what seems to be

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<v Speaker 1>a pretty big backdown.

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<v Speaker 3>We didn't expect this to come quite this early. There

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<v Speaker 3>was a little bit of scuttle by round that maybe

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<v Speaker 3>they'd look to do some of it in the next

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<v Speaker 3>sitting fortnite to try and allay some of the criticisms,

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<v Speaker 3>particularly in business, that they're trying to ram through this

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<v Speaker 3>CGT legislation before they strike deals on concessions. But they

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<v Speaker 3>have gone further than expected with their concessions.

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<v Speaker 1>The budget was five weeks ago. It's been a nightmare

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<v Speaker 1>five weeks for the government to try to deal with

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<v Speaker 1>what I guess they would say has been the misrepresentation

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<v Speaker 1>of their quite reasonable changes. The anger that they've been

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<v Speaker 1>dealing with in communities has been significant, and of course

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<v Speaker 1>they're dealing with the rise of One Nation, which, as

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<v Speaker 1>you and I have discussed previously on the front, has

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<v Speaker 1>coincided with the release of this budget. How much is

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<v Speaker 1>Pauline Hanson able to claim credit for these changes that

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<v Speaker 1>we're seeing today.

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<v Speaker 3>Well, Pauline Hanson certainly seemed to loom large in Anthony

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<v Speaker 3>Alberze's press conference on Thursday morning.

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<v Speaker 2>Well, I have a view which is consistent that I

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<v Speaker 2>think that one nation do not present alterns. I didn't

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<v Speaker 2>hear anything about costs of living.

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<v Speaker 3>She made her first ever appearance at the National Press

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<v Speaker 3>Club on Wednesday, and you'd have to say, by any measure,

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<v Speaker 3>it was a political success.

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<v Speaker 4>My overriding concern, and that of the people I talk to,

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<v Speaker 4>is that politicians today are good at talking but not listening.

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<v Speaker 4>They will do anything to get your vote, but when

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<v Speaker 4>that has been achieved, the voter is ignored.

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<v Speaker 3>They're the two words Anthony Alberezi can't escape at the moment,

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<v Speaker 3>Pauline Hansen. He was announcing big changes to what was

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<v Speaker 3>proposed in the budget, and the questions were framed around

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<v Speaker 3>what are you going to do to try and win

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<v Speaker 3>back support. Some of these changes are exactly what business

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<v Speaker 3>was calling for. For example, they've lifted quite considerably the

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<v Speaker 3>existing exemptions and concessions small businesses receive. They've lifted that

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<v Speaker 3>threshold of what is considered a small business from two

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<v Speaker 3>million dollars to businesses with a turnover of ten million.

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<v Speaker 3>That's quite a win for business. But don't expect many

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<v Speaker 3>of the business groups to be saying that this is enough.

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<v Speaker 3>They're all now saying this is good, but we want more.

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<v Speaker 1>Two million dollars does not seem like a lot in

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<v Speaker 1>the turnoil of any business really in twenty twenty six, Greg,

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<v Speaker 1>do you think the government got that role had a

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<v Speaker 1>lack of understanding about what a small business actually is

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<v Speaker 1>in this day and age.

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<v Speaker 3>Yeah, that's exactly right, Claire. And that threshold had not

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<v Speaker 3>changed for many years as well, so it was really

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<v Speaker 3>a common sense move that they were dragged kicking and

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<v Speaker 3>screaming to. To be quite frank, they've also put out

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<v Speaker 3>a discussion paper for an effective carve out of the

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<v Speaker 3>new CGT regime for startups. There's still a bit more

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<v Speaker 3>work to do on that. That will not be included

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<v Speaker 3>in the bill that the government tries to ram through

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<v Speaker 3>in the Senate in the next sitting period, but the

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<v Speaker 3>indicating that for businesses with a turnover of up to

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<v Speaker 3>fifty million that started from nothing and are in their

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<v Speaker 3>first ten years of operation, they will go under the

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<v Speaker 3>old system of the fifty percent discount for the CGT

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<v Speaker 3>and that goes for investors in those businesses as well.

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<v Speaker 1>They use this phrase in the press conference. That really

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<v Speaker 1>caught my attention was innovative businesses.

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<v Speaker 3>Innovative business CGT concession. These would provide a fit.

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<v Speaker 1>I think most businesses would say they're being innovative, whether

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<v Speaker 1>they're running a headdressing salon or a trucking fleet, especially

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<v Speaker 1>now in the age of AI when everyone is trying

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<v Speaker 1>to use these new productivity tools to make a living.

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<v Speaker 1>So I mean, what is an innovative business? Are we

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<v Speaker 1>talking here just about tech?

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<v Speaker 3>It really remains to be seen. There is a greater

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<v Speaker 3>risk within the tech sector of people going offshore. But

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<v Speaker 3>it's not just tech. It's also companies that work on

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<v Speaker 3>innovative solutions for other industries, such as tech solutions for

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<v Speaker 3>the financial sector or the medical sector, et cetera. The

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<v Speaker 3>discussion paper does talk about the need for these businesses

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<v Speaker 3>to prove that they can be scalable and achieve really

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<v Speaker 3>high levels of commercialization, So it will be targeted more

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<v Speaker 3>around by those definitions. It will favor the tech startups

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<v Speaker 3>where it lands will be fascinating because if they go

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<v Speaker 3>too narrow that will be very contentious. They'll be accused

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<v Speaker 3>of favoring certain sectors. However, they've already backflipped. We'll be

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<v Speaker 3>told very firmly in the past few weeks that they're

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<v Speaker 3>looking at narrow carveouts for only small firms within the

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<v Speaker 3>tech sector, and now they've done something bigger for small

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<v Speaker 3>business more generally.

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<v Speaker 1>The accusation that the government was bringing in a death

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<v Speaker 1>tax has clearly spooked this government and we've seen Anthony

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<v Speaker 1>Albanezi seeming very wounded and cabinet ministers going on breakfast

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<v Speaker 1>television trying to explain what testamentary trusts were.

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<v Speaker 2>Twenty thousand discretionary trusts, but not testamentary trusts, not testimentary.

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<v Speaker 1>Trust I've certainly learned a lot about what a testamentary

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<v Speaker 1>trust is greet that I didn't know before. What is

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<v Speaker 1>the change that they're here? And do you think this

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<v Speaker 1>is an admission that it was a terrible idea in

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<v Speaker 1>the first place?

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<v Speaker 3>Well, this was just one oh one. I mean as

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<v Speaker 3>soon as this appeared on the front page of The

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<v Speaker 3>Australian a couple of days after the budget by James Kirby,

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<v Speaker 3>and the story was that if you're receiving an inheritance

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<v Speaker 3>from a discretionary testametry trust, you'll be paying higher taxes. Now,

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<v Speaker 3>it's not that hard for your political opponents to frame

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<v Speaker 3>that as an effective death tax. So when this came out,

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<v Speaker 3>they were like, oh, no, it's rubbish. We've got no

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<v Speaker 3>death taxes, no death taxes, and it was just an

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<v Speaker 3>obvious one just to kill it straight away, But they

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<v Speaker 3>sort of let it run for a bit, and they

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<v Speaker 3>did indicate a couple of weeks ago that they'd be

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<v Speaker 3>looking at changing it possibly, and now they've an outstate

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<v Speaker 3>would So if you receive your inheritance from any testamentary trust,

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<v Speaker 3>you will not be taxed at the minimum thirty percent rate.

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<v Speaker 3>That's just common sense politically. I mean, we've seen how

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<v Speaker 3>this plays out in campaigns, the prospect of a death tax.

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<v Speaker 3>In twenty nineteen, the Labor Party, when they went to

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<v Speaker 3>the election, they had nothing resembling a death tax. Testamentary

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<v Speaker 3>taxes trusts were completely carve out of their increasing taxes

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<v Speaker 3>on trusts, and there were still underground campaigns that were

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<v Speaker 3>very successful accusing them of having a secret death tax.

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<v Speaker 3>So it was quite a political miscalculation to include testamentary

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<v Speaker 3>trust within the framework of this.

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<v Speaker 1>In the first place, there's two ways to look at

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<v Speaker 1>this past five weeks from a political point of view.

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<v Speaker 1>Greed one is that in two years time, when we're

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<v Speaker 1>finally going to an election, we'll barely remember that there

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<v Speaker 1>was a five week period after the twenty twenty six

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<v Speaker 1>budget when everything kind of went custard for Anthony Albineasi.

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<v Speaker 1>The other way to look at it is that this

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<v Speaker 1>has been an absolute disaster and that he's given away

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<v Speaker 1>valuable time and airspace to pull in Hanson and he'll

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<v Speaker 1>never get that back. What's your take on it, And

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<v Speaker 1>to be fair, I'm putting you on the spot here.

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<v Speaker 3>Well, the specific announcement on Thursday about the carveouts was

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<v Speaker 3>a bit of a no brainer considering the pressure dar under.

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<v Speaker 3>They needed to do this at the very least, and

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<v Speaker 3>they're going to be phace calls to do far far more.

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<v Speaker 3>But I think more generally, the problem with this budget

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<v Speaker 3>is the views of the government within the community could

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<v Speaker 3>be set in stone before the government has a chance

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<v Speaker 3>to turn them around, and once that happens, you're in trouble.

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<v Speaker 3>And this is why the fire of the liar slogan

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<v Speaker 3>has stuck because they broke fundamental election promises. Can you

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<v Speaker 3>rule out any changes to negative deering and capital gains tasts?

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<v Speaker 2>How hard is it? For the fiftieth time.

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<v Speaker 3>It was pretty sketchy what they did. They went to

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<v Speaker 3>an election saying they weren't going to do these things,

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<v Speaker 3>and then they win this massive majority. They have a

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<v Speaker 3>friendly state where they know they'd probably be able to

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<v Speaker 3>get in these sort of taxes, they'd be able to

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<v Speaker 3>get them through the parliament. So first budget up, bang,

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<v Speaker 3>they do it without really making a case for it.

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<v Speaker 3>And not only that they did it without unfailing equivalent

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<v Speaker 3>income tax cuts or company tax cuts. So the problem,

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<v Speaker 3>Claire could be that not only will there be a

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<v Speaker 3>community view setting that Anthony Albanezi is a liar, which

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<v Speaker 3>is very damaging, there could also be another view setting

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<v Speaker 3>that this government is all about raising taxes. Now the

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<v Speaker 3>government is indicating that they've got more income tax cuts

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<v Speaker 3>planned ahead of the next election, but the problem for

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<v Speaker 3>them is if the community mindset is that this government

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<v Speaker 3>is just all about raising tax and that really firms

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<v Speaker 3>and then they come in before the election with brand

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<v Speaker 3>new tax cuts, then maybe it will be too late

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<v Speaker 3>to change people's minds, or even to.

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<v Speaker 1>Get them to believe that they're going to really do it,

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<v Speaker 1>you know exactly. I was really interested in the wake

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<v Speaker 1>of this budget. I really learned something about who was

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<v Speaker 1>investing and who was negative gearing. I met a young woman,

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<v Speaker 1>a hairdresser married to a plumber, who was furious about

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<v Speaker 1>the changes. And this was kind of her political awakening

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<v Speaker 1>because she not being able to buy a house in

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<v Speaker 1>Sydney because the housing market is so bad, had invested

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<v Speaker 1>in three negatively geared properties in regional towns. She was

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<v Speaker 1>absolutely furious. I suspect that the government didn't expect that

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<v Speaker 1>she was the kind of person who would be angry.

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<v Speaker 1>We're not talking though about negative gearing today in these changes.

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<v Speaker 1>Is the government going to hold the line on that

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<v Speaker 1>despite that fury that's out there?

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<v Speaker 3>Yeah, I think that hold the line on negative gearing, Claire.

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<v Speaker 3>It's interesting because in twenty nineteen the debate was all

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<v Speaker 3>about negative gearing. Bill Shorten had a CGT policy not

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<v Speaker 3>dissimilar to this governments, where he was going to have

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<v Speaker 3>the fifty percent discount to twenty five percent for all assets.

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<v Speaker 3>But back then that sort of went under the Ray day.

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<v Speaker 3>It was all about what negative gearing would do to

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<v Speaker 3>the housing market, whereas the COVID boom has happened since then.

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<v Speaker 3>I think now there is more community support for acting

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<v Speaker 3>to lower the growth of housing prices, even though it

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<v Speaker 3>was blatantly broken promise, and I think you'd have to

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<v Speaker 3>say they probably should have foreshadowed it and then taken

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<v Speaker 3>it to an election. But that part has been less

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<v Speaker 3>contentious than what they've done with applying a CGT change,

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<v Speaker 3>changing the regime for all assets, not just housing investment.

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<v Speaker 3>It's made a lot of people in the business community

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<v Speaker 3>wonder why they're doing it, and also a lot of

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<v Speaker 3>young people wonder why they can't avail the same investment

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<v Speaker 3>discounts as what their parents did.

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<v Speaker 1>Yeah, we're in the age of the side hustle now,

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<v Speaker 1>aren't we. These smart young people who might be negatively

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<v Speaker 1>gearing investment properties, or they might be starting a business

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<v Speaker 1>or investing in some shares with their money precisely because

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<v Speaker 1>of their frustration with those traditional pathways that their parents

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<v Speaker 1>used to get a house. Do you think the government

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<v Speaker 1>didn't quite get that those are actually the people who

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<v Speaker 1>were going to be the most annoyed.

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<v Speaker 3>Yeah, I think there was a fair bit of Hubra Senate.

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<v Speaker 3>I think that they believed that the coalition was so

0:13:33.040 --> 0:13:36.440
<v Speaker 3>shot to pieces that they get away with it. They didn't,

0:13:36.920 --> 0:13:40.319
<v Speaker 3>I think, foreshadow that one nation would be a true

0:13:40.400 --> 0:13:43.760
<v Speaker 3>threat to them as an alternative government. There's still a

0:13:43.800 --> 0:13:47.040
<v Speaker 3>long way to play out before that is established. By

0:13:47.120 --> 0:13:51.080
<v Speaker 3>the way, they've only been ahead in one newspole so far.

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<v Speaker 3>But they would have expected the controversy to be among

0:13:56.720 --> 0:14:00.280
<v Speaker 3>people who already had wealth. I don't think they would

0:14:00.280 --> 0:14:03.920
<v Speaker 3>have anticipated that it would be so unpopular among young

0:14:03.960 --> 0:14:07.880
<v Speaker 3>people who were maybe just starting to build their share portfolio,

0:14:08.640 --> 0:14:12.040
<v Speaker 3>or who didn't have investments yet but wanted to one day.

0:14:12.720 --> 0:14:16.439
<v Speaker 3>The other interesting aspect of this debate, Claire, has been

0:14:16.480 --> 0:14:21.360
<v Speaker 3>the grandfathering aspect, which again in twenty nineteen, nobody spoke

0:14:21.400 --> 0:14:24.320
<v Speaker 3>about grandfathering. It just seemed like it was a done thing.

0:14:24.800 --> 0:14:30.360
<v Speaker 3>Whereas now, because they're selling this budget through an intergenerational lens,

0:14:30.880 --> 0:14:34.080
<v Speaker 3>I think this is why this has been such an issue.

0:14:34.680 --> 0:14:37.920
<v Speaker 3>All that's happened is young people have gone, well, the

0:14:37.920 --> 0:14:40.880
<v Speaker 3>boomers can still receive these benefits, but I won't be

0:14:40.880 --> 0:14:45.320
<v Speaker 3>able to. So how is this intergenerational fairness? And it's

0:14:45.360 --> 0:14:49.960
<v Speaker 3>been interesting because this intergenerational fairness argument only really works

0:14:49.960 --> 0:14:53.360
<v Speaker 3>if they were able to deliver massive income tax cuts

0:14:53.440 --> 0:14:56.560
<v Speaker 3>with it, and they couldn't do it because they banked

0:14:56.560 --> 0:14:58.800
<v Speaker 3>a lot of it, and quite frankly, they would need

0:14:59.160 --> 0:15:02.440
<v Speaker 3>other revenue to really make income tax cuts worth it,

0:15:02.520 --> 0:15:03.400
<v Speaker 3>like big ones.

0:15:03.640 --> 0:15:05.640
<v Speaker 1>Yeah, and maybe they just didn't want to do it at.

0:15:05.480 --> 0:15:08.360
<v Speaker 3>All exactly, and that might be one reason why. I've

0:15:08.400 --> 0:15:12.000
<v Speaker 3>also certainly declared over the past week or so, they've

0:15:12.040 --> 0:15:17.359
<v Speaker 3>been shifting the narrative on the budget from intergenerational equity

0:15:17.680 --> 0:15:20.440
<v Speaker 3>to the old class war approach, which is where I've

0:15:20.440 --> 0:15:22.520
<v Speaker 3>seen Jim Chalmers come out and have a go at

0:15:22.560 --> 0:15:25.720
<v Speaker 3>Angus Taylor for being born wealthy. I mean, you wouldn't

0:15:25.720 --> 0:15:29.680
<v Speaker 3>have seen language like that even six weeks ago. And

0:15:29.720 --> 0:15:34.320
<v Speaker 3>we're seeing Anthony Albanezi talk about Paul and Hanson receiving

0:15:34.400 --> 0:15:39.600
<v Speaker 3>planes from billionaires, and we've seen Wayne swanseay they need

0:15:39.680 --> 0:15:42.160
<v Speaker 3>to not be centrist, they need to talk like the

0:15:42.240 --> 0:15:47.400
<v Speaker 3>working class and deliver for them unashamedly. So there has

0:15:47.520 --> 0:15:53.160
<v Speaker 3>been given. The intergenerational argument has fallen flat and has

0:15:53.240 --> 0:15:57.760
<v Speaker 3>not resonated. The government is increasingly shifting its argument to

0:15:57.840 --> 0:16:01.440
<v Speaker 3>a fairness and a class war well.

0:16:01.280 --> 0:16:02.760
<v Speaker 1>I'm sure it won't be the last time we talk

0:16:02.800 --> 0:16:04.880
<v Speaker 1>about it. Thanks so much, Greg for being on the show.

0:16:05.160 --> 0:16:05.920
<v Speaker 3>Thank you, Claire.

0:16:10.440 --> 0:16:14.240
<v Speaker 1>Greg Brown is The Australian's chief political correspondent. You can

0:16:14.320 --> 0:16:17.160
<v Speaker 1>check out all the analysis and reporting from our experts

0:16:17.280 --> 0:16:20.000
<v Speaker 1>right now at the Australian dot com dot au