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