Treasurer waters down expectations of reform in contentious areas
As the economic reform roundtable kicks off, the Prime Minister and Treasurer have flagged that fast reform would only come in areas supported by broad consensus.
The government’s much-awaited Economic Reform Roundtable has finally arrived, taking place from Tuesday to Thursday this week (19 to 21 August).
Treasurer Jim Chalmers flagged that the roundtable discussions would serve as a starting point to build consensus on economic reform over the medium term.
“I don’t believe that we will solve every challenge in our economy in three days. This is all about three days to inform the next three budgets and beyond,” he told reporters on Tuesday.
The roundtable has brought together 23 of Australia’s business, union, academic and policy leaders to take on Australia’s most pressing economic challenges. Day one was focused on economic resilience amid growing uncertainty, while days two and three would respectively tackle Australia’s productivity and budget sustainability issues.
Chalmers said that successful reform ideas would fall into three broad ‘baskets’ based on their breadth and consensus.
Firstly, ‘clear reform directions’ were policy areas with momentum and broad agreement on the direction of travel, even if consensus hadn’t been reached yet.
Next, ‘specific reforms’ would include the handful of changes that stakeholders largely agreed on, which could be implemented quickly. Lastly, ‘ongoing priorities’ were areas that needed further work to build knowledge and consensus.
Prime Minister Anthony Albanese told reporters that some reforms would go to cabinet immediately following the roundtable, while others would have a longer lead time.
“There’ll be things that we can do immediately, that Jim [Chalmers] and Katy [Gallagher] will take to the cabinet processes in coming days, literally, and say … this is a good idea. We can get this done,” he said on Tuesday.
“There’ll be things that feed into our budget processes, including the MYEFO [mid-year economic and fiscal outlook] at the end of the year, but then the budget next year.”
Ahead of the roundtable, a Treasury leak indicated that the government was already eyeing regulatory reform as an outcome of the roundtable in a bid to speed up housing approvals.
Accounting industry bodies have expressed hopes that the roundtable would pave the way for substantive tax reform, which they say would be essential to address intergenerational equity concerns and Australia’s over-reliance on income tax.
“Tax reform is an important part of boosting productivity – and it’s the right step forward to have it on the table,” CA ANZ chief executive Ainslie van Onselen said in June.
“Our system is over-reliant on personal income tax, and that is unfairly punishing Australians also facing cost of living and housing pressures.”
However, Grant Thornton’s national head of technical tax, David Montani, expressed doubts that the roundtable would give way to holistic tax reform due to political constraints.
“Both sides of politics have managed to paint themselves into their respective corners because they've been stockpiling dishonest scare campaigns against the other side's policies,” he said.
“The coalition has several, like negative gearing, carbon tax, and resource taxation. Labor largely has one super-scare weapon, the GST.
“And yet, issues like GST and negative gearing and so many others all need to be a part of the conversation if you're talking about genuine, holistic reform. But each side can't engage in big parts of that conversation, and that's why I say it's self-defeating.”
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