Speaker 1: From The Australian. Here's what's on the front. I'm Claire Harvey.
Speaker 1: It's Friday, June nineteen, twenty twenty six. Brittany Higgins has
Speaker 1: failed to account for more than one million dollars of
Speaker 1: the two point four million she received in a Commonwealth
Speaker 1: compensation payout. That's the finding of a trustee in bankruptcy
Speaker 1: who says there's virtually nothing left of her payout. That's
Speaker 1: an exclusive live now at the Australian dot com dot au.
Speaker 1: It's the four hundred and seventy five million dollar backflip
Speaker 1: that might make things worse. After the most bruising five
Speaker 1: weeks of his prime ministership, Anthony Albanezi has announced four
Speaker 1: big and very complicated changes to the controversial capital gains
Speaker 1: tax and death tax measures in the budget. But will
Speaker 1: it be enough to quell the fury of young investors
Speaker 1: and entrepreneurs who feel the governments let them down. Greg
Speaker 1: Brown is here in just a moment, we.
Speaker 2: Back Australian small businesses and the important role that they
Speaker 2: play in Australia. It's always contested, it's always contentious, but
Speaker 2: it will be worth it, and genuine reform is often
Speaker 2: difficult but it's the right thing to do, done for
Speaker 2: the right reasons.
Speaker 1: Greg Brown is The Australian's chief political correspondent, and Greg
Speaker 1: will we expecting Anthony Albanezi and Jin Chalmers to stand
Speaker 1: up on Thursday morning and make what seems to be
Speaker 1: a pretty big backdown.
Speaker 3: We didn't expect this to come quite this early. There
Speaker 3: was a little bit of scuttle by round that maybe
Speaker 3: they'd look to do some of it in the next
Speaker 3: sitting fortnite to try and allay some of the criticisms,
Speaker 3: particularly in business, that they're trying to ram through this
Speaker 3: CGT legislation before they strike deals on concessions. But they
Speaker 3: have gone further than expected with their concessions.
Speaker 1: The budget was five weeks ago. It's been a nightmare
Speaker 1: five weeks for the government to try to deal with
Speaker 1: what I guess they would say has been the misrepresentation
Speaker 1: of their quite reasonable changes. The anger that they've been
Speaker 1: dealing with in communities has been significant, and of course
Speaker 1: they're dealing with the rise of One Nation, which, as
Speaker 1: you and I have discussed previously on the front, has
Speaker 1: coincided with the release of this budget. How much is
Speaker 1: Pauline Hanson able to claim credit for these changes that
Speaker 1: we're seeing today.
Speaker 3: Well, Pauline Hanson certainly seemed to loom large in Anthony
Speaker 3: Alberze's press conference on Thursday morning.
Speaker 2: Well, I have a view which is consistent that I
Speaker 2: think that one nation do not present alterns. I didn't
Speaker 2: hear anything about costs of living.
Speaker 3: She made her first ever appearance at the National Press
Speaker 3: Club on Wednesday, and you'd have to say, by any measure,
Speaker 3: it was a political success.
Speaker 4: My overriding concern, and that of the people I talk to,
Speaker 4: is that politicians today are good at talking but not listening.
Speaker 4: They will do anything to get your vote, but when
Speaker 4: that has been achieved, the voter is ignored.
Speaker 3: They're the two words Anthony Alberezi can't escape at the moment,
Speaker 3: Pauline Hansen. He was announcing big changes to what was
Speaker 3: proposed in the budget, and the questions were framed around
Speaker 3: what are you going to do to try and win
Speaker 3: back support. Some of these changes are exactly what business
Speaker 3: was calling for. For example, they've lifted quite considerably the
Speaker 3: existing exemptions and concessions small businesses receive. They've lifted that
Speaker 3: threshold of what is considered a small business from two
Speaker 3: million dollars to businesses with a turnover of ten million.
Speaker 3: That's quite a win for business. But don't expect many
Speaker 3: of the business groups to be saying that this is enough.
Speaker 3: They're all now saying this is good, but we want more.
Speaker 1: Two million dollars does not seem like a lot in
Speaker 1: the turnoil of any business really in twenty twenty six, Greg,
Speaker 1: do you think the government got that role had a
Speaker 1: lack of understanding about what a small business actually is
Speaker 1: in this day and age.
Speaker 3: Yeah, that's exactly right, Claire. And that threshold had not
Speaker 3: changed for many years as well, so it was really
Speaker 3: a common sense move that they were dragged kicking and
Speaker 3: screaming to. To be quite frank, they've also put out
Speaker 3: a discussion paper for an effective carve out of the
Speaker 3: new CGT regime for startups. There's still a bit more
Speaker 3: work to do on that. That will not be included
Speaker 3: in the bill that the government tries to ram through
Speaker 3: in the Senate in the next sitting period, but the
Speaker 3: indicating that for businesses with a turnover of up to
Speaker 3: fifty million that started from nothing and are in their
Speaker 3: first ten years of operation, they will go under the
Speaker 3: old system of the fifty percent discount for the CGT
Speaker 3: and that goes for investors in those businesses as well.
Speaker 1: They use this phrase in the press conference. That really
Speaker 1: caught my attention was innovative businesses.
Speaker 3: Innovative business CGT concession. These would provide a fit.
Speaker 1: I think most businesses would say they're being innovative, whether
Speaker 1: they're running a headdressing salon or a trucking fleet, especially
Speaker 1: now in the age of AI when everyone is trying
Speaker 1: to use these new productivity tools to make a living.
Speaker 1: So I mean, what is an innovative business? Are we
Speaker 1: talking here just about tech?
Speaker 3: It really remains to be seen. There is a greater
Speaker 3: risk within the tech sector of people going offshore. But
Speaker 3: it's not just tech. It's also companies that work on
Speaker 3: innovative solutions for other industries, such as tech solutions for
Speaker 3: the financial sector or the medical sector, et cetera. The
Speaker 3: discussion paper does talk about the need for these businesses
Speaker 3: to prove that they can be scalable and achieve really
Speaker 3: high levels of commercialization, So it will be targeted more
Speaker 3: around by those definitions. It will favor the tech startups
Speaker 3: where it lands will be fascinating because if they go
Speaker 3: too narrow that will be very contentious. They'll be accused
Speaker 3: of favoring certain sectors. However, they've already backflipped. We'll be
Speaker 3: told very firmly in the past few weeks that they're
Speaker 3: looking at narrow carveouts for only small firms within the
Speaker 3: tech sector, and now they've done something bigger for small
Speaker 3: business more generally.
Speaker 1: The accusation that the government was bringing in a death
Speaker 1: tax has clearly spooked this government and we've seen Anthony
Speaker 1: Albanezi seeming very wounded and cabinet ministers going on breakfast
Speaker 1: television trying to explain what testamentary trusts were.
Speaker 2: Twenty thousand discretionary trusts, but not testamentary trusts, not testimentary.
Speaker 1: Trust I've certainly learned a lot about what a testamentary
Speaker 1: trust is greet that I didn't know before. What is
Speaker 1: the change that they're here? And do you think this
Speaker 1: is an admission that it was a terrible idea in
Speaker 1: the first place?
Speaker 3: Well, this was just one oh one. I mean as
Speaker 3: soon as this appeared on the front page of The
Speaker 3: Australian a couple of days after the budget by James Kirby,
Speaker 3: and the story was that if you're receiving an inheritance
Speaker 3: from a discretionary testametry trust, you'll be paying higher taxes. Now,
Speaker 3: it's not that hard for your political opponents to frame
Speaker 3: that as an effective death tax. So when this came out,
Speaker 3: they were like, oh, no, it's rubbish. We've got no
Speaker 3: death taxes, no death taxes, and it was just an
Speaker 3: obvious one just to kill it straight away, But they
Speaker 3: sort of let it run for a bit, and they
Speaker 3: did indicate a couple of weeks ago that they'd be
Speaker 3: looking at changing it possibly, and now they've an outstate
Speaker 3: would So if you receive your inheritance from any testamentary trust,
Speaker 3: you will not be taxed at the minimum thirty percent rate.
Speaker 3: That's just common sense politically. I mean, we've seen how
Speaker 3: this plays out in campaigns, the prospect of a death tax.
Speaker 3: In twenty nineteen, the Labor Party, when they went to
Speaker 3: the election, they had nothing resembling a death tax. Testamentary
Speaker 3: taxes trusts were completely carve out of their increasing taxes
Speaker 3: on trusts, and there were still underground campaigns that were
Speaker 3: very successful accusing them of having a secret death tax.
Speaker 3: So it was quite a political miscalculation to include testamentary
Speaker 3: trust within the framework of this.
Speaker 1: In the first place, there's two ways to look at
Speaker 1: this past five weeks from a political point of view.
Speaker 1: Greed one is that in two years time, when we're
Speaker 1: finally going to an election, we'll barely remember that there
Speaker 1: was a five week period after the twenty twenty six
Speaker 1: budget when everything kind of went custard for Anthony Albineasi.
Speaker 1: The other way to look at it is that this
Speaker 1: has been an absolute disaster and that he's given away
Speaker 1: valuable time and airspace to pull in Hanson and he'll
Speaker 1: never get that back. What's your take on it, And
Speaker 1: to be fair, I'm putting you on the spot here.
Speaker 3: Well, the specific announcement on Thursday about the carveouts was
Speaker 3: a bit of a no brainer considering the pressure dar under.
Speaker 3: They needed to do this at the very least, and
Speaker 3: they're going to be phace calls to do far far more.
Speaker 3: But I think more generally, the problem with this budget
Speaker 3: is the views of the government within the community could
Speaker 3: be set in stone before the government has a chance
Speaker 3: to turn them around, and once that happens, you're in trouble.
Speaker 3: And this is why the fire of the liar slogan
Speaker 3: has stuck because they broke fundamental election promises. Can you
Speaker 3: rule out any changes to negative deering and capital gains tasts?
Speaker 2: How hard is it? For the fiftieth time.
Speaker 3: It was pretty sketchy what they did. They went to
Speaker 3: an election saying they weren't going to do these things,
Speaker 3: and then they win this massive majority. They have a
Speaker 3: friendly state where they know they'd probably be able to
Speaker 3: get in these sort of taxes, they'd be able to
Speaker 3: get them through the parliament. So first budget up, bang,
Speaker 3: they do it without really making a case for it.
Speaker 3: And not only that they did it without unfailing equivalent
Speaker 3: income tax cuts or company tax cuts. So the problem,
Speaker 3: Claire could be that not only will there be a
Speaker 3: community view setting that Anthony Albanezi is a liar, which
Speaker 3: is very damaging, there could also be another view setting
Speaker 3: that this government is all about raising taxes. Now the
Speaker 3: government is indicating that they've got more income tax cuts
Speaker 3: planned ahead of the next election, but the problem for
Speaker 3: them is if the community mindset is that this government
Speaker 3: is just all about raising tax and that really firms
Speaker 3: and then they come in before the election with brand
Speaker 3: new tax cuts, then maybe it will be too late
Speaker 3: to change people's minds, or even to.
Speaker 1: Get them to believe that they're going to really do it,
Speaker 1: you know exactly. I was really interested in the wake
Speaker 1: of this budget. I really learned something about who was
Speaker 1: investing and who was negative gearing. I met a young woman,
Speaker 1: a hairdresser married to a plumber, who was furious about
Speaker 1: the changes. And this was kind of her political awakening
Speaker 1: because she not being able to buy a house in
Speaker 1: Sydney because the housing market is so bad, had invested
Speaker 1: in three negatively geared properties in regional towns. She was
Speaker 1: absolutely furious. I suspect that the government didn't expect that
Speaker 1: she was the kind of person who would be angry.
Speaker 1: We're not talking though about negative gearing today in these changes.
Speaker 1: Is the government going to hold the line on that
Speaker 1: despite that fury that's out there?
Speaker 3: Yeah, I think that hold the line on negative gearing, Claire.
Speaker 3: It's interesting because in twenty nineteen the debate was all
Speaker 3: about negative gearing. Bill Shorten had a CGT policy not
Speaker 3: dissimilar to this governments, where he was going to have
Speaker 3: the fifty percent discount to twenty five percent for all assets.
Speaker 3: But back then that sort of went under the Ray day.
Speaker 3: It was all about what negative gearing would do to
Speaker 3: the housing market, whereas the COVID boom has happened since then.
Speaker 3: I think now there is more community support for acting
Speaker 3: to lower the growth of housing prices, even though it
Speaker 3: was blatantly broken promise, and I think you'd have to
Speaker 3: say they probably should have foreshadowed it and then taken
Speaker 3: it to an election. But that part has been less
Speaker 3: contentious than what they've done with applying a CGT change,
Speaker 3: changing the regime for all assets, not just housing investment.
Speaker 3: It's made a lot of people in the business community
Speaker 3: wonder why they're doing it, and also a lot of
Speaker 3: young people wonder why they can't avail the same investment
Speaker 3: discounts as what their parents did.
Speaker 1: Yeah, we're in the age of the side hustle now,
Speaker 1: aren't we. These smart young people who might be negatively
Speaker 1: gearing investment properties, or they might be starting a business
Speaker 1: or investing in some shares with their money precisely because
Speaker 1: of their frustration with those traditional pathways that their parents
Speaker 1: used to get a house. Do you think the government
Speaker 1: didn't quite get that those are actually the people who
Speaker 1: were going to be the most annoyed.
Speaker 3: Yeah, I think there was a fair bit of Hubra Senate.
Speaker 3: I think that they believed that the coalition was so
Speaker 3: shot to pieces that they get away with it. They didn't,
Speaker 3: I think, foreshadow that one nation would be a true
Speaker 3: threat to them as an alternative government. There's still a
Speaker 3: long way to play out before that is established. By
Speaker 3: the way, they've only been ahead in one newspole so far.
Speaker 3: But they would have expected the controversy to be among
Speaker 3: people who already had wealth. I don't think they would
Speaker 3: have anticipated that it would be so unpopular among young
Speaker 3: people who were maybe just starting to build their share portfolio,
Speaker 3: or who didn't have investments yet but wanted to one day.
Speaker 3: The other interesting aspect of this debate, Claire, has been
Speaker 3: the grandfathering aspect, which again in twenty nineteen, nobody spoke
Speaker 3: about grandfathering. It just seemed like it was a done thing.
Speaker 3: Whereas now, because they're selling this budget through an intergenerational lens,
Speaker 3: I think this is why this has been such an issue.
Speaker 3: All that's happened is young people have gone, well, the
Speaker 3: boomers can still receive these benefits, but I won't be
Speaker 3: able to. So how is this intergenerational fairness? And it's
Speaker 3: been interesting because this intergenerational fairness argument only really works
Speaker 3: if they were able to deliver massive income tax cuts
Speaker 3: with it, and they couldn't do it because they banked
Speaker 3: a lot of it, and quite frankly, they would need
Speaker 3: other revenue to really make income tax cuts worth it,
Speaker 3: like big ones.
Speaker 1: Yeah, and maybe they just didn't want to do it at.
Speaker 3: All exactly, and that might be one reason why. I've
Speaker 3: also certainly declared over the past week or so, they've
Speaker 3: been shifting the narrative on the budget from intergenerational equity
Speaker 3: to the old class war approach, which is where I've
Speaker 3: seen Jim Chalmers come out and have a go at
Speaker 3: Angus Taylor for being born wealthy. I mean, you wouldn't
Speaker 3: have seen language like that even six weeks ago. And
Speaker 3: we're seeing Anthony Albanezi talk about Paul and Hanson receiving
Speaker 3: planes from billionaires, and we've seen Wayne swanseay they need
Speaker 3: to not be centrist, they need to talk like the
Speaker 3: working class and deliver for them unashamedly. So there has
Speaker 3: been given. The intergenerational argument has fallen flat and has
Speaker 3: not resonated. The government is increasingly shifting its argument to
Speaker 3: a fairness and a class war well.
Speaker 1: I'm sure it won't be the last time we talk
Speaker 1: about it. Thanks so much, Greg for being on the show.
Speaker 3: Thank you, Claire.
Speaker 1: Greg Brown is The Australian's chief political correspondent. You can
Speaker 1: check out all the analysis and reporting from our experts
Speaker 1: right now at the Australian dot com dot au