Treasurer Jim Chalmers ready to grasp the tax reform nettle to set budget on sustainable footing
Jim Chalmers has identified tax reform as central to boosting Australia’s stagnant productivity, not just fixing the budget.
But the Treasurer knows the changes needed will only happen if he and Prime Minister Anthony Albanese can build broad consensus.
The Government will spend its second term delivering what it promised and seeking where it can go further to make sure Australia thrives in a changing and unstable global environment.
“This is about testing the country’s reform appetite — and I don’t see it in personal terms, but I am personally willing to grasp the nettle,” Dr Chalmers told the National Press Club on Wednesday.
“No sensible progress can be made on productivity, resilience or budget sustainability without proper consideration of more tax reform. I don’t just accept that, I welcome it.”
He’s starting by keeping “an open door and an open mind” for all ideas put forward at the three-day reform roundtable in August.
He lamented the “cancerous effect” of governments being forced to rule things in or out.
On changes to the rate or base of the GST, Dr Chalmers said he hadn’t historically been attracted to the idea but he knew some Premiers were keen and he didn’t want to shoot ideas down prematurely.
Similarly, he anticipated some would put forward ideas to raise more revenue from the resources sector.
But anyone who wants a look-in has to offer suggestions that are genuinely in the national interest, that are specific and practical, and that have budget offsets.
Dr Chalmers said the burden of finding trade-offs to pay for good ideas too often fell solely on Government – specifically on him and Finance Minister Katy Gallagher – but it should be everyone’s responsibility.
“We will provide the leadership … and we will provide the opportunity, and we need everyone to play their part,” he said.
“Let’s see what we can achieve together if we dial up the ambition a bit and dial down the rancour a bit as well.
“And if we fail it won’t be because of a shortage of ideas, options or choices. It won’t be a shortage of courage – but a shortage of consensus.”
Of the six biggest pressures on the budget, half are still growing: health, early childhood education, and defence.
Dr Chalmers said he was an “enthusiastic supporter of more defence spending” amid increasingly heated debate – and pressure from foreign allies such as the US – for Australia to lift its contribution.
Productivity Commissioner Danielle Wood and Reserve Bank governor Michele Bullock will address the roundtable on August 19-21.
There are expected to be about 25 participants, but Cabinet has agreed that every minister will also consult and come up with ideas in their own portfolio.
The Coalition is unlikely to included, but Dr Chalmers said there would be an important role for them and anyone else who was “genuinely constructive, whether inside or outside the room.
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