Media
|
News
August 2, 2025
Jim Chalmers' economic roundtable is morphing into a forum to prosecute higher taxes on wealth and big business, after the treasurer handpicked speakers who have backed increased taxes on superannuation, capital gains and trusts to pay for surging government spending.
On Friday, Chalmers published details of the August 19-21 roundtable agenda, which will comprise three broad topics: resilience, productivity, and budget sustainability and tax reform.
Reserve Bank governor Michele Bullock will be the keynote speaker for the resilience session and Productivity Commission chair Danielle Wood will open the productivity session. Grattan Institute chief executive Aruna Sathanapally will give a presentation at the tax session titled ''A better tax system''.
Grattan helped write Labor's 2019 election agenda on tax, including the then opposition's proposals to curtail tax breaks for superannuation, capital gains, negative gearing, franking credits and trusts.
The think tank has recently doubled down on that agenda in research papers and public remarks, and has also proposed cutting the age pension for retirees who live in multimillion dollar homes.
Sathanapally told a tax reform roundtable at Parliament House last week that taxes would need to rise because government spending had increased by about 2 per cent of GDP (almost $60 billion a year) because of the ageing population and the publics expectations of government services.
''We've got a size of government issue, and there's a tax-to-GDP issue,'' she said. ''Meeting those expectations is more expensive because our population has aged substantially.'' She has also advocated inheritance taxes, increasing the GST and abolishing the GST deal for Western Australia.
Wood was an advocate of higher wealth taxes in her previous role at the Grattan Institute.
The Albanese government has delayed legislating its new 30 per cent tax on superannuation balances above $3 million to after the productivity roundtable, enabling a broader push
for higher taxes at that summit to soften hostility towards the controversial proposal.
The economic roundtable comes three years after Labor blindsided business at the Jobs and Skills Summit by orchestrating a deal with unions for industrial relations changes. Chalmers has put tax changes on the table for discussion, saying he wants to take pressure off income tax paid by working age people and make the budget more sustainable.
He admitted last year that he had Treasury model potential changes to CGT and negative gearing. Prime Minister Anthony Albanese ruled out changes before the May election.
Shadow finance minister James Paterson said voters should be wary of what was initially pitched as a productivity summit.
''The Albanese government has no mandate for higher taxes because they didn't earn one from the Australian people at the election. In fact, they said any suggestion they would hike taxes after the election was a Liberal Party scare campaign. Jim Chalmers' stacking the roundtable speaking agenda with people in favour of higher taxes doesn't change that fact.'' The Coalition is trying to reclaim the mantle as the party of lower taxes after going to the last election promising to revoke Labor's income tax cuts, which Paterson has admitted was a mistake.
On Thursday, shadow treasurer Ted O'Brien, who will participate in the summit, said that although the Coalition was open-minded on tax reform, it would draw the line at an increased tax burden. Whereas Chalmers has given himself leeway to increase taxes by saying he was open to ideas that were ''broadly budget-neutral or better'', O'Brien said any reform, at most, should be budget-neutral.
O'Brien said Chalmers was looking for political cover to raise taxes to pay for the government's spending spree, rather than address spending, which has been growing at 6 per cent a year in real terms, or almost 9 per cent including inflation.
Treasury Secretary Jenny Wilkinson will lead a discussion at the roundtable on the role of budget sustainability. Until June, Wilkinson was the head of the Department of Finance, which is responsible for the spending side of the budget.
Federal spending is estimated by Treasury to hit the highest share of the economy this year since 1986, excluding the huge stimulus during the 2020-21 pandemic lockdown recession. A blowout in the National Disability Insurance Scheme to $52 billion is largely responsible. One corporate spokesman, who asked not to be named so they could speak freely, decried that there was no session dedicated solely to spending restraint, only ''efficient and high-quality government services, spending and care''.
The Productivity Commission on Friday recommended cutting the corporate tax rate to 20 per cent for small and medium companies, but increasing the tax burden on large businesses with revenue above $1 billion.
While about 99 per cent of companies would pay less tax under the reform, about 500 of Australia's largest ones, including banks, miners and supermarkets would not receive a cut to the existing 30 per cent corporate rate.
Twenty-four business groups slammed a proposal to introduce a new 5 per cent cash flow tax, to make the reform revenue-neutral.
Former Treasury secretary Ken Henry, who will attend the roundtable, said the corporate tax overhaul was well worth considering. ''We have to find ways of lowering the cost of capital for globally mobile businesses and, at the same time, placing more reliance on taxes on economic rents.'' ACTU secretary Sally McManus also expressed openness to favouring smaller companies in a revenue neutral way.
At a tax reform roundtable hosted by independent MP Allegra Spender on Friday last week, a broad range of tax experts argued that tax breaks for capital gains from property and shares, trusts and superannuation are too generous and should be dialled back to fund cuts to income tax to reward working-age people and improve the federal budget.
Treasury has stepped up scrutiny of family trusts, revealing last year that about 1.7 million people received income of almost $60 billion from the tax-friendly investment vehicles.
Former Treasury official Miranda Stewart, who was temporarily seconded to Chalmers' department last year to work up tax reform options, said that to deter ''excessive investment'' in leveraged property, the 50 per cent capital gains tax discount should be made less generous at 25-30 per cent and negative gearing should be limited.