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Full: Jim Chalmers on Money News · Money News

• 0:00
  S1: We're going to go live to Canberra now across to
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  S1: GB Sydney. 3AW Melbourne for ABC Brisbane and six B
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  S1: Perth and our network stations across the country. On money
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  S1: news to the treasurer, Jim Chalmers, who has just delivered
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  S1: his fifth budget in Canberra. He joins us live from
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  S1: Parliament House. Treasurer, thanks for your time.
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  S2: Thanks for having me back on the show.
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  S1: James, can we start with an obvious question about your
• 0:22
  S1: long term commentary, given you've publicly ruled out, denied, slapped down,
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  S1: flat out said no to any changes to negative gearing
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  S1: or capital gains tax. Why should anyone, treasurer, take you
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  S1: on your word ever again?
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  S2: Well, first of all, James, I want to acknowledge to
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  S2: you and to all of your listeners that the government
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  S2: has changed its policy in this regard. And I think
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  S2: the most important thing to do, having changed policy, is
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  S2: to front up and explain why that's the case, and
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  S2: that's why I'm on your program. I know that this
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  S2: is contentious. I know that this is not the same
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  S2: policy that we have had in the past, but it's
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  S2: an important change nonetheless. And the easiest thing in the
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  S2: world would have been to ignore these intensifying challenges in
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  S2: the tax system and in the housing market, and to
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  S2: leave them completely undisturbed and unattended to. We've chosen the
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  S2: more difficult path, which is to come to a different view,
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  S2: and then explain to your listeners why.
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  S1: Right, the public remarks from you, from the Prime Minister,
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  S1: which date back to prior the 2022 election? For long years,
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  S1: probably five long years of public denials where journalists have
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  S1: given you so many opportunities to flag that this was coming.
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  S1: You were asked on this radio network, the ABC, Sky
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  S1: news repeatedly, capital gains tax, negative gearing, and instead you
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  S1: continuously ruled it out. So, treasurer, again, just from a
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  S1: public standpoint, an integrity standpoint, what value is your word?
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  S2: Well, that reflected our position at the time, James. And,
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  S2: you know, in a couple of different ways, I've acknowledged
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  S2: to you and your listeners that we've changed our policy.
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  S2: We've come to a different view. And the reason why
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  S2: we have is because all of those comments that you
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  S2: are rightly referencing, they reflected at the time the government's
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  S2: almost singular focus on housing supply. Housing supply is still
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  S2: the biggest problem in our housing market. We don't have
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  S2: enough homes, and in this budget, we're investing in another
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  S2: couple of billion dollars in the small scale infrastructure to
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  S2: make more homes get over the line so we can
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  S2: get more homes into our communities. Right? So that's the
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  S2: first point. Our comments, our commitments reflected the government's focus
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  S2: on supply. It's become increasingly clear to us that supply
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  S2: is the main part of the problem. But it's not
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  S2: the only part of the problem. And what happened? What
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  S2: has happened over the years is that the way that
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  S2: the tax system interacts with the housing market is it's
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  S2: locked too many people out of housing, and especially young people.
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  S2: And you would know from being tapped into your listeners
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  S2: and talkback from time to time that this is a concern,
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  S2: which is broadly shared in the community about how hard
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  S2: it is for young people to get a toehold in
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  S2: the market. It's not just a concern that's held by
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  S2: young people, but often by parents and grandparents. You and
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  S2: I would speak to the same kind of people who
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  S2: think that this is one of the biggest challenges in
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  S2: our economy. And so once.
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  S1: Again, I'll just pull you up. You are talking right now.
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  S1: You're talking off the the talking points that the Labour
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  S1: Party distributed today. There were seven points. And I don't
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  S1: want to just allow those to be circulated everywhere. I
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  S1: understand you've made some critical changes here, but the one
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  S1: thing I want to know, because according to the I.
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  S2: Haven't seen those. I haven't seen those two. One of
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  S2: them is I'm young. I'm not reading from notes.
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  S1: Well, I can tell you young people and their parents
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  S1: and grandparents are worried they will never own their own home.
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  S1: And that is a fact. But I mean, you would
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  S1: be aware as well that there are a lot of
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  S1: people under the age of 40, according to the ATO,
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  S1: who are negatively gearing right now. It's not just boomers.
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  S2: Yeah. And they can continue to negatively gear the properties
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  S2: that they've bought. It's one of the ways that we
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  S2: are recognising and respecting decisions that people have taken in
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  S2: the past. And more than that, James, if people want
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  S2: to continue negatively gearing into the future, they can do
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  S2: that with new properties. That's a really important feature of
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  S2: the policy we've announced, because if people are negatively gearing
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  S2: into the future, they can make a contribution to this
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  S2: supply challenge that we have in the housing market. It's
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  S2: one of the ways that I think we've struck the
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  S2: right balance. You can keep negatively gearing for new properties.
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  S2: If you've got a property now, you can keep negatively
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  S2: gearing it into the future. And that's because we recognize
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  S2: and respect that people have made decisions based on the
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  S2: old arrangements, and those old arrangements will continue.
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  S1: Will it increase rents your changes.
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  S2: Overall, the housing package in the budget won't. The tax changes,
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  S2: we think, will have a very modest impact on rents.
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  S2: A couple of bucks a week.
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  S1: Are you sure about that?
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  S2: And we've well, we've released the Treasury modelling that came
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  S2: with the decision that we took. But overall, James, the
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  S2: budget means more homes and more homes puts downward pressure
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  S2: on rents.
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  S1: Right. Is there a chance migration. Maybe even 10% may
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  S1: be contributing to the housing crisis. And I've seen the
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  S1: numbers in the budget papers tonight, 295,000 migrants this year.
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  S1: This is net treasurer, which means the people leaving subtracted
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  S1: from the people arriving 245,000 migrants in 2026 2027, 225,000
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  S1: migrants in 2728. Now, that number, I'm sure you're going
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  S1: to say is coming down and you've made changes to that,
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  S1: but I think people are catching on and realising that
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  S1: whether it's rent, whether it's buying new homes, migration is
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  S1: having an impact on the housing market as well.
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  S2: Well, you're right to anticipate that. I'll point out to
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  S2: your viewers that net overseas migration has come down very
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  S2: substantially since the surge that we inherited from our predecessors.
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  S2: It's come down 45% from its peak, actually. And the
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  S2: revisions in the budget today reflect more fewer departures rather
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  S2: than another spike in arrivals like we saw a few
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  S2: years ago. And so we've been managing the net overseas
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  S2: migration numbers down. The changes today are about fewer departures,
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  S2: but we've also been building more homes. You know, building
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  S2: commencements are up 26% in our economy. And that represents
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  S2: genuine progress. We need to build a heap more homes
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  S2: in our communities. This has been a long standing challenge.
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  S2: So we're getting net overseas migration down over time. We're
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  S2: building more houses over time as well. We know that
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  S2: people will try and play very divisive politics about this,
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  S2: but our job is to make the right economic decisions
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  S2: for the right economic reasons. And I'm confident in this
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  S2: budget that we are.
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  S1: Okay in relation to the capital gains tax discount and
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  S1: the changes in the budget. Is there a carve out
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  S1: here for enterprise for start ups? You would have read
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  S1: these articles in the Financial Review over the last week.
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  S1: There is a concern here that the next entrepreneur, the
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  S1: next Atlassian, the next Canva might end up offshore. If
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  S1: there is not a carve out, is there a carve
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  S1: out for them?
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  S2: Totally understood the very real issues that people are raising
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  S2: with us. We were actually consulting privately with the sector
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  S2: before tonight, and now we'll consult with them publicly. We
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  S2: specifically say in the budget papers today that we do
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  S2: recognize that start ups and venture capital are a different category.
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  S2: The way that they calculate the cost base in the
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  S2: capital gains tax system makes them a little bit different.
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  S2: The budget overall is really encouraging of the tech sector
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  S2: and start ups and small business and venture capital. We've
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  S2: got a bunch of new initiatives in the budget to
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  S2: support that part of the economy, because it's the dynamic
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  S2: part of the economy. We want it to grow over time.
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  S2: So of course, we will continue to consult with the
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  S2: sector to make sure we get to the best possible arrangements,
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  S2: which recognize they are a little bit different.
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  S1: But no carve outs. So the tax that they're going
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  S1: to be paying on capital gains in Australia will be
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  S1: far higher than other parts of the world. Aren't you
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  S1: worried about what that does for competition for the next entrepreneurs?
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  S1: I mean we're in a situation treasurer where we're sort
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  S1: of in this AI, this tech, this data centre race.
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  S1: And the concerns over the last week has been that
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  S1: people will invest in Singapore, they'll invest in America, they'll
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  S1: invest in the UK. I don't know the Middle East anywhere.
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  S1: Instead of Australia. Because of these changes.
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  S2: You're making a series of assumptions, James, about the consultation
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  S2: with that part of the economy, which I don't necessarily share. Well, it's.
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  S1: Pretty hard for small businesses. It is on a range
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  S1: of fronts.
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  S2: Well, we're we're extending the making the instant asset write
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  S2: off permanent. We've got lost carry back. We've got a
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  S2: whole bunch of incentives for venture capital and start ups.
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  S2: And when it comes to capital gains tax, which is
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  S2: what you're asking me about, I've tried to make it
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  S2: very clear, James, that we are consulting with the sector
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  S2: to try and find a way forward that they can
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  S2: live with and that we can live with. That's how
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  S2: good governments work through these sorts of legitimate issues, which
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  S2: are raised with us from time to time. I'm a
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  S2: big supporter of the sector, and I'm confident that we
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  S2: can get to a good landing position.
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  S1: Treasurer, just lastly, before we let you go in a
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  S1: busy night to use your words, why won't you cut
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  S1: the excise on darts, on cigarettes, which is costing the economy,
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  S1: whether people listening have had a smoke or not in
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  S1: their life, tens of billions of dollars in lost earnings.
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  S2: It is a big, substantial challenge in our budget. James.
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  S2: I've been up front about that for some time. I'm
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  S2: not convinced that substantially cutting taxes on tobacco, as Big
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  S2: Tobacco would like us to do, would necessarily.
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  S1: Be a smoke. It's $30 a pack. It's not necessarily
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  S1: big tobacco. It's the firebombings and the the criminal gangs.
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  S1: I mean, you know, the it's out of control.
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  S2: Just trying to get to that. James, in answering your question,
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  S2: the issue here is the illegality, the issues around law
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  S2: and order. And we've invested hundreds of millions of dollars
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  S2: in cracking down on the crooks who are making this
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  S2: an industry in our country. We do acknowledge it's a problem.
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  S2: It's not just a problem in a budget. It's a
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  S2: problem in our communities, in our society. We want that
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  S2: number of tax taken on cigarettes to go down because
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  S2: more people are giving up the darts, not because of
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  S2: organized crime. And so we're spending a lot of money,
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  S2: time and effort trying to crack down on this illegal industry.
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  S1: Treasurer, we really appreciate your time from Canberra. Thank you.
• 9:56
  S2: Me too. James. All the best.
• 9:57
  S1: Jim Chalmers after delivering his fifth.