Rates cut but borrowers told not to bank on more relief
The central bank opted not to shock markets for a second time in two months on Tuesday, cutting the cash rate by 25 basis points to 3.6 per cent.
In its accompanying statement, the RBA board said a further easing in monetary policy, following cuts in February and May, was appropriate because underlying inflation and the labour market had continued to ease.
"The board nevertheless remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and potential supply," it said.
Absent from the board's statement this time was a comment it felt monetary policy was still restrictive.
As the cash rate gets closer to the unobservable "neutral" rate, the board would have to work harder to justify crossing into stimulatory territory, EY chief economist Cherelle Murphy said.
"This will be a harder barrier for the Reserve Bank to cross but we think a likely one, with private consumption and investment still soft and risks persisting due to elevated global uncertainties," she said.
RBA governor Michele Bullock said any further decisions would be taken "meeting-by-meeting" and based on economic data as it unfolds.
All nine board members voted in favour of a cut and there was no discussion of a jumbo 50 basis point cut, Ms Bullock said.
The RBA's decision will save borrowers with a $600,000 mortgage almost $90 a month in repayments and a cumulative $272 per month since cuts began in February.
The move brings the cash rate to its lowest level since May 2023, with the average variable mortgage rate expected to fall to 5.5 per cent.
But for many borrowers, the financial boost was behind schedule.
Most economists had expected the RBA to deliver further rate relief in its July meeting.
In a shock 6-3 decision, the board kept rates on hold, citing a need to wait for more inflation data to ensure price growth was coming down sustainably to target.
The local share market lifted modestly and the Aussie dollar fell following the decision, while money markets were pricing in two more cuts by March.
Vanguard senior economist Grant Feng predicted one more cut by the end of 2025, as growth showed signs of recovery and the unemployment rate stabilising.
Treasurer Jim Chalmers said the decision was "very welcome relief for millions of Australians".
"The three interest rate cuts we've seen this year would not have been possible without our collective efforts to get inflation down," he said.
The RBA board in its statement noted uncertainty in the global economy was still high.
But markets had settled down in recent months with a little bit more clarity to the scale of Donald Trump's tariffs and a fairly low amount of retaliation from other countries.
In quarterly forecasts produced by RBA staff and released alongside the cash rate decision, productivity growth was revised down by 0.3 per cent over the medium term.
That would flow through to lower GDP growth, lower living standards and make it harder to get inflation under control.
All four big banks and challenger lender Macquarie announced they would pass on the cut in full to variable home loan borrowers.
Borrowers have received welcome relief from the Reserve Bank of Australia, which delivered a widely expected interest rate cut but flagged the end to its easing cycle is getting closer.
The central bank opted not to shock markets for a second time in two months on Tuesday, cutting the cash rate by 25 basis points to 3.6 per cent.
In its accompanying statement, the RBA board said a further easing in monetary policy, following cuts in February and May, was appropriate because underlying inflation and the labour market had continued to ease.
"The board nevertheless remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and potential supply," it said.
Absent from the board's statement this time was a comment it felt monetary policy was still restrictive.
As the cash rate gets closer to the unobservable "neutral" rate, the board would have to work harder to justify crossing into stimulatory territory, EY chief economist Cherelle Murphy said.
"This will be a harder barrier for the Reserve Bank to cross but we think a likely one, with private consumption and investment still soft and risks persisting due to elevated global uncertainties," she said.
RBA governor Michele Bullock said any further decisions would be taken "meeting-by-meeting" and based on economic data as it unfolds.
All nine board members voted in favour of a cut and there was no discussion of a jumbo 50 basis point cut, Ms Bullock said.
The RBA's decision will save borrowers with a $600,000 mortgage almost $90 a month in repayments and a cumulative $272 per month since cuts began in February.
The move brings the cash rate to its lowest level since May 2023, with the average variable mortgage rate expected to fall to 5.5 per cent.
But for many borrowers, the financial boost was behind schedule.
Most economists had expected the RBA to deliver further rate relief in its July meeting.
In a shock 6-3 decision, the board kept rates on hold, citing a need to wait for more inflation data to ensure price growth was coming down sustainably to target.
The local share market lifted modestly and the Aussie dollar fell following the decision, while money markets were pricing in two more cuts by March.
Vanguard senior economist Grant Feng predicted one more cut by the end of 2025, as growth showed signs of recovery and the unemployment rate stabilising.
Treasurer Jim Chalmers said the decision was "very welcome relief for millions of Australians".
"The three interest rate cuts we've seen this year would not have been possible without our collective efforts to get inflation down," he said.
The RBA board in its statement noted uncertainty in the global economy was still high.
But markets had settled down in recent months with a little bit more clarity to the scale of Donald Trump's tariffs and a fairly low amount of retaliation from other countries.
In quarterly forecasts produced by RBA staff and released alongside the cash rate decision, productivity growth was revised down by 0.3 per cent over the medium term.
That would flow through to lower GDP growth, lower living standards and make it harder to get inflation under control.
All four big banks and challenger lender Macquarie announced they would pass on the cut in full to variable home loan borrowers.
Borrowers have received welcome relief from the Reserve Bank of Australia, which delivered a widely expected interest rate cut but flagged the end to its easing cycle is getting closer.
The central bank opted not to shock markets for a second time in two months on Tuesday, cutting the cash rate by 25 basis points to 3.6 per cent.
In its accompanying statement, the RBA board said a further easing in monetary policy, following cuts in February and May, was appropriate because underlying inflation and the labour market had continued to ease.
"The board nevertheless remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and potential supply," it said.
Absent from the board's statement this time was a comment it felt monetary policy was still restrictive.
As the cash rate gets closer to the unobservable "neutral" rate, the board would have to work harder to justify crossing into stimulatory territory, EY chief economist Cherelle Murphy said.
"This will be a harder barrier for the Reserve Bank to cross but we think a likely one, with private consumption and investment still soft and risks persisting due to elevated global uncertainties," she said.
RBA governor Michele Bullock said any further decisions would be taken "meeting-by-meeting" and based on economic data as it unfolds.
All nine board members voted in favour of a cut and there was no discussion of a jumbo 50 basis point cut, Ms Bullock said.
The RBA's decision will save borrowers with a $600,000 mortgage almost $90 a month in repayments and a cumulative $272 per month since cuts began in February.
The move brings the cash rate to its lowest level since May 2023, with the average variable mortgage rate expected to fall to 5.5 per cent.
But for many borrowers, the financial boost was behind schedule.
Most economists had expected the RBA to deliver further rate relief in its July meeting.
In a shock 6-3 decision, the board kept rates on hold, citing a need to wait for more inflation data to ensure price growth was coming down sustainably to target.
The local share market lifted modestly and the Aussie dollar fell following the decision, while money markets were pricing in two more cuts by March.
Vanguard senior economist Grant Feng predicted one more cut by the end of 2025, as growth showed signs of recovery and the unemployment rate stabilising.
Treasurer Jim Chalmers said the decision was "very welcome relief for millions of Australians".
"The three interest rate cuts we've seen this year would not have been possible without our collective efforts to get inflation down," he said.
The RBA board in its statement noted uncertainty in the global economy was still high.
But markets had settled down in recent months with a little bit more clarity to the scale of Donald Trump's tariffs and a fairly low amount of retaliation from other countries.
In quarterly forecasts produced by RBA staff and released alongside the cash rate decision, productivity growth was revised down by 0.3 per cent over the medium term.
That would flow through to lower GDP growth, lower living standards and make it harder to get inflation under control.
All four big banks and challenger lender Macquarie announced they would pass on the cut in full to variable home loan borrowers.
Borrowers have received welcome relief from the Reserve Bank of Australia, which delivered a widely expected interest rate cut but flagged the end to its easing cycle is getting closer.
The central bank opted not to shock markets for a second time in two months on Tuesday, cutting the cash rate by 25 basis points to 3.6 per cent.
In its accompanying statement, the RBA board said a further easing in monetary policy, following cuts in February and May, was appropriate because underlying inflation and the labour market had continued to ease.
"The board nevertheless remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and potential supply," it said.
Absent from the board's statement this time was a comment it felt monetary policy was still restrictive.
As the cash rate gets closer to the unobservable "neutral" rate, the board would have to work harder to justify crossing into stimulatory territory, EY chief economist Cherelle Murphy said.
"This will be a harder barrier for the Reserve Bank to cross but we think a likely one, with private consumption and investment still soft and risks persisting due to elevated global uncertainties," she said.
RBA governor Michele Bullock said any further decisions would be taken "meeting-by-meeting" and based on economic data as it unfolds.
All nine board members voted in favour of a cut and there was no discussion of a jumbo 50 basis point cut, Ms Bullock said.
The RBA's decision will save borrowers with a $600,000 mortgage almost $90 a month in repayments and a cumulative $272 per month since cuts began in February.
The move brings the cash rate to its lowest level since May 2023, with the average variable mortgage rate expected to fall to 5.5 per cent.
But for many borrowers, the financial boost was behind schedule.
Most economists had expected the RBA to deliver further rate relief in its July meeting.
In a shock 6-3 decision, the board kept rates on hold, citing a need to wait for more inflation data to ensure price growth was coming down sustainably to target.
The local share market lifted modestly and the Aussie dollar fell following the decision, while money markets were pricing in two more cuts by March.
Vanguard senior economist Grant Feng predicted one more cut by the end of 2025, as growth showed signs of recovery and the unemployment rate stabilising.
Treasurer Jim Chalmers said the decision was "very welcome relief for millions of Australians".
"The three interest rate cuts we've seen this year would not have been possible without our collective efforts to get inflation down," he said.
The RBA board in its statement noted uncertainty in the global economy was still high.
But markets had settled down in recent months with a little bit more clarity to the scale of Donald Trump's tariffs and a fairly low amount of retaliation from other countries.
In quarterly forecasts produced by RBA staff and released alongside the cash rate decision, productivity growth was revised down by 0.3 per cent over the medium term.
That would flow through to lower GDP growth, lower living standards and make it harder to get inflation under control.
All four big banks and challenger lender Macquarie announced they would pass on the cut in full to variable home loan borrowers.
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Negative gearing together with the CGT discount has so warped our housing market, many young Australians have given up on every owning their own home. But it looks like the PM has put off reforming those distortionary tax concessions until his next term of government. He keeps hosing down suggestions for progressive tax reforms. To hear the Prime Minister rule out any major tax reforms before the next election is not just disappointing, it's irresponsible. There are also reports that the government is considering introducing road user charges for electric vehicles only. If we're talking road user charges, it would make sense to include heavy vehicles, which do so much damage to our roads - a vehicle that's twice the weight of a regular vehicle does 16 times the damage to the road. But heavy vehicles don't pay anything extra for that damage. But will heavy vehicles be included in any new road user charges? Doesn't look like it. 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Instead, the government's productivity agenda seems to be to weaken environment laws, tax clean vehicles, cut red tape for property developers and leave the difficult tax reforms until after the next election. It's a far cry from Albanese's promise in Labor's election platform, to be a government "as courageous and hardworking and caring as the Australian people are themselves." Labor has never been in a better position to implement its national policy platform. But will the Albanese government spend the next three years using its thumping majority to lead bold reforms or deliver damp squib solutions? Next week's productivity roundtable will reveal which path the Prime Minister intends to tread, and so far, it looks like all it's set to do is weaken environment laws and delay big tax reforms until after the next election. Between the Treasury advice leaked to the ABC and the Prime Minister ruling out any major tax reforms before the next election, the government poured a bucket of cold water on any real excitement building for the productivity roundtable. And the productivity roundtable has a big job ahead of it. Australia doesn't just have a productivity problem, it has a revenue problem. Australia is one of the lowest-taxing countries in the developed world. In fact, if Australia collected the OECD average in tax - not the highest amount, just the average - the Commonwealth would have had an extra $140 billion in revenue in 2023-24. To put that in perspective, it's equivalent to the combined cost of the aged pension, the NDIS, Jobseeker, and the child care subsidy, along with the total government spending on housing, vocational education, and both the ABC and SBS. It's clear that bold tax reforms are necessary. Despite being a low-tax country, Australia is still one of the richest countries on Earth. Yet many people's living standards have been going backwards. Why? Lots of reasons. The Coalition enacted policies that deliberately kept wages low. So, when excessive corporate profits drove inflation after the pandemic, the cost of everyday living rose faster than people's paychecks could keep up. Allowing multinational gas companies to export 80 per cent of Australia's gas tripled domestic gas prices and doubled wholesale electricity prices on the east coast of Australia. Climate change-fuelled extreme weather is driving up insurance costs and premiums. The cost of buying a house is now out of reach for most young people, and the cost of renting has skyrocketed, too. This is how most people experience an increase in inequality - your paycheck doesn't go as far as it used to. But those everyday cost-of-living increases obscure a larger truth about the Australian economy. It's just less fair than it used to be. It used to be that a rising tide lifted all boats. When the economy grew, Australians all shared the benefits. If you imagine Australian economic growth were a cake shared between 10 people, in the decades after World War II, the bottom 90 per cent of Australians used to get 9 pieces of cake, leaving one piece for the top 10 per cent. In the decade after the Global Financial Crisis, the richest person at the table ate nine pieces of cake, and the bottom 90 per cent of people shared less than one piece of cake between them. It's hugely unfair. There's not much point boosting productivity if a majority of working people don't get to share in the benefits. Treasurer Jim Chalmers is keen to have that debate. He described the game of ruling things in or out as "cancerous" and vowed to dial up Labor's ambition for bold reforms. And let's be clear, to reverse that path of Australia's growing inequality will require bold tax reforms. It's clear the Treasurer understands that, as well as several of the roundtable invitees, who want tax reform on the agenda at the productivity roundtable. The ACTU submission included several tax reforms, including to negative gearing and the CGT discount, but also reforming the broken Petroleum Resource Rent Tax (PRRT) and replacing it with a new 25 per cent export levy on gas. Negative gearing together with the CGT discount has so warped our housing market, many young Australians have given up on every owning their own home. But it looks like the PM has put off reforming those distortionary tax concessions until his next term of government. He keeps hosing down suggestions for progressive tax reforms. To hear the Prime Minister rule out any major tax reforms before the next election is not just disappointing, it's irresponsible. There are also reports that the government is considering introducing road user charges for electric vehicles only. If we're talking road user charges, it would make sense to include heavy vehicles, which do so much damage to our roads - a vehicle that's twice the weight of a regular vehicle does 16 times the damage to the road. But heavy vehicles don't pay anything extra for that damage. But will heavy vehicles be included in any new road user charges? Doesn't look like it. READ MORE EBONY BENNETT: The fact that Labor is considering slugging electric vehicle drivers with a new tax, while doing nothing to stop half of Australia's gas being exported royalty-free, tells you everything you need to know. Big tax reforms are on the table for electric vehicles, but off the table for the gas industry. Yet, according to the Treasury advice leaked to the ABC, the government will consider other major reforms. For example, it will weaken - sorry, "streamline" - our national environment laws to make development easier. And it will consider cutting "red tape" by freezing changes to the National Construction Code. Labor has a thumping majority in the lower house and it can pass progressive reforms through the Senate with the support of the Greens any time it wants. Instead, the government's productivity agenda seems to be to weaken environment laws, tax clean vehicles, cut red tape for property developers and leave the difficult tax reforms until after the next election. It's a far cry from Albanese's promise in Labor's election platform, to be a government "as courageous and hardworking and caring as the Australian people are themselves." Labor has never been in a better position to implement its national policy platform. But will the Albanese government spend the next three years using its thumping majority to lead bold reforms or deliver damp squib solutions? Next week's productivity roundtable will reveal which path the Prime Minister intends to tread, and so far, it looks like all it's set to do is weaken environment laws and delay big tax reforms until after the next election. Between the Treasury advice leaked to the ABC and the Prime Minister ruling out any major tax reforms before the next election, the government poured a bucket of cold water on any real excitement building for the productivity roundtable. And the productivity roundtable has a big job ahead of it. Australia doesn't just have a productivity problem, it has a revenue problem. Australia is one of the lowest-taxing countries in the developed world. In fact, if Australia collected the OECD average in tax - not the highest amount, just the average - the Commonwealth would have had an extra $140 billion in revenue in 2023-24. To put that in perspective, it's equivalent to the combined cost of the aged pension, the NDIS, Jobseeker, and the child care subsidy, along with the total government spending on housing, vocational education, and both the ABC and SBS. It's clear that bold tax reforms are necessary. Despite being a low-tax country, Australia is still one of the richest countries on Earth. Yet many people's living standards have been going backwards. Why? Lots of reasons. The Coalition enacted policies that deliberately kept wages low. So, when excessive corporate profits drove inflation after the pandemic, the cost of everyday living rose faster than people's paychecks could keep up. Allowing multinational gas companies to export 80 per cent of Australia's gas tripled domestic gas prices and doubled wholesale electricity prices on the east coast of Australia. Climate change-fuelled extreme weather is driving up insurance costs and premiums. The cost of buying a house is now out of reach for most young people, and the cost of renting has skyrocketed, too. This is how most people experience an increase in inequality - your paycheck doesn't go as far as it used to. But those everyday cost-of-living increases obscure a larger truth about the Australian economy. It's just less fair than it used to be. It used to be that a rising tide lifted all boats. When the economy grew, Australians all shared the benefits. If you imagine Australian economic growth were a cake shared between 10 people, in the decades after World War II, the bottom 90 per cent of Australians used to get 9 pieces of cake, leaving one piece for the top 10 per cent. In the decade after the Global Financial Crisis, the richest person at the table ate nine pieces of cake, and the bottom 90 per cent of people shared less than one piece of cake between them. It's hugely unfair. There's not much point boosting productivity if a majority of working people don't get to share in the benefits. Treasurer Jim Chalmers is keen to have that debate. He described the game of ruling things in or out as "cancerous" and vowed to dial up Labor's ambition for bold reforms. And let's be clear, to reverse that path of Australia's growing inequality will require bold tax reforms. It's clear the Treasurer understands that, as well as several of the roundtable invitees, who want tax reform on the agenda at the productivity roundtable. The ACTU submission included several tax reforms, including to negative gearing and the CGT discount, but also reforming the broken Petroleum Resource Rent Tax (PRRT) and replacing it with a new 25 per cent export levy on gas. Negative gearing together with the CGT discount has so warped our housing market, many young Australians have given up on every owning their own home. But it looks like the PM has put off reforming those distortionary tax concessions until his next term of government. He keeps hosing down suggestions for progressive tax reforms. To hear the Prime Minister rule out any major tax reforms before the next election is not just disappointing, it's irresponsible. There are also reports that the government is considering introducing road user charges for electric vehicles only. If we're talking road user charges, it would make sense to include heavy vehicles, which do so much damage to our roads - a vehicle that's twice the weight of a regular vehicle does 16 times the damage to the road. But heavy vehicles don't pay anything extra for that damage. But will heavy vehicles be included in any new road user charges? Doesn't look like it. READ MORE EBONY BENNETT: The fact that Labor is considering slugging electric vehicle drivers with a new tax, while doing nothing to stop half of Australia's gas being exported royalty-free, tells you everything you need to know. Big tax reforms are on the table for electric vehicles, but off the table for the gas industry. Yet, according to the Treasury advice leaked to the ABC, the government will consider other major reforms. For example, it will weaken - sorry, "streamline" - our national environment laws to make development easier. And it will consider cutting "red tape" by freezing changes to the National Construction Code. Labor has a thumping majority in the lower house and it can pass progressive reforms through the Senate with the support of the Greens any time it wants. Instead, the government's productivity agenda seems to be to weaken environment laws, tax clean vehicles, cut red tape for property developers and leave the difficult tax reforms until after the next election. It's a far cry from Albanese's promise in Labor's election platform, to be a government "as courageous and hardworking and caring as the Australian people are themselves." Labor has never been in a better position to implement its national policy platform. But will the Albanese government spend the next three years using its thumping majority to lead bold reforms or deliver damp squib solutions? Next week's productivity roundtable will reveal which path the Prime Minister intends to tread, and so far, it looks like all it's set to do is weaken environment laws and delay big tax reforms until after the next election. Between the Treasury advice leaked to the ABC and the Prime Minister ruling out any major tax reforms before the next election, the government poured a bucket of cold water on any real excitement building for the productivity roundtable. And the productivity roundtable has a big job ahead of it. Australia doesn't just have a productivity problem, it has a revenue problem. Australia is one of the lowest-taxing countries in the developed world. In fact, if Australia collected the OECD average in tax - not the highest amount, just the average - the Commonwealth would have had an extra $140 billion in revenue in 2023-24. To put that in perspective, it's equivalent to the combined cost of the aged pension, the NDIS, Jobseeker, and the child care subsidy, along with the total government spending on housing, vocational education, and both the ABC and SBS. It's clear that bold tax reforms are necessary. Despite being a low-tax country, Australia is still one of the richest countries on Earth. Yet many people's living standards have been going backwards. Why? Lots of reasons. The Coalition enacted policies that deliberately kept wages low. So, when excessive corporate profits drove inflation after the pandemic, the cost of everyday living rose faster than people's paychecks could keep up. Allowing multinational gas companies to export 80 per cent of Australia's gas tripled domestic gas prices and doubled wholesale electricity prices on the east coast of Australia. Climate change-fuelled extreme weather is driving up insurance costs and premiums. The cost of buying a house is now out of reach for most young people, and the cost of renting has skyrocketed, too. This is how most people experience an increase in inequality - your paycheck doesn't go as far as it used to. But those everyday cost-of-living increases obscure a larger truth about the Australian economy. It's just less fair than it used to be. It used to be that a rising tide lifted all boats. When the economy grew, Australians all shared the benefits. If you imagine Australian economic growth were a cake shared between 10 people, in the decades after World War II, the bottom 90 per cent of Australians used to get 9 pieces of cake, leaving one piece for the top 10 per cent. In the decade after the Global Financial Crisis, the richest person at the table ate nine pieces of cake, and the bottom 90 per cent of people shared less than one piece of cake between them. It's hugely unfair. There's not much point boosting productivity if a majority of working people don't get to share in the benefits. Treasurer Jim Chalmers is keen to have that debate. He described the game of ruling things in or out as "cancerous" and vowed to dial up Labor's ambition for bold reforms. And let's be clear, to reverse that path of Australia's growing inequality will require bold tax reforms. It's clear the Treasurer understands that, as well as several of the roundtable invitees, who want tax reform on the agenda at the productivity roundtable. The ACTU submission included several tax reforms, including to negative gearing and the CGT discount, but also reforming the broken Petroleum Resource Rent Tax (PRRT) and replacing it with a new 25 per cent export levy on gas. Negative gearing together with the CGT discount has so warped our housing market, many young Australians have given up on every owning their own home. But it looks like the PM has put off reforming those distortionary tax concessions until his next term of government. He keeps hosing down suggestions for progressive tax reforms. To hear the Prime Minister rule out any major tax reforms before the next election is not just disappointing, it's irresponsible. There are also reports that the government is considering introducing road user charges for electric vehicles only. If we're talking road user charges, it would make sense to include heavy vehicles, which do so much damage to our roads - a vehicle that's twice the weight of a regular vehicle does 16 times the damage to the road. But heavy vehicles don't pay anything extra for that damage. But will heavy vehicles be included in any new road user charges? Doesn't look like it. READ MORE EBONY BENNETT: The fact that Labor is considering slugging electric vehicle drivers with a new tax, while doing nothing to stop half of Australia's gas being exported royalty-free, tells you everything you need to know. Big tax reforms are on the table for electric vehicles, but off the table for the gas industry. Yet, according to the Treasury advice leaked to the ABC, the government will consider other major reforms. For example, it will weaken - sorry, "streamline" - our national environment laws to make development easier. And it will consider cutting "red tape" by freezing changes to the National Construction Code. Labor has a thumping majority in the lower house and it can pass progressive reforms through the Senate with the support of the Greens any time it wants. Instead, the government's productivity agenda seems to be to weaken environment laws, tax clean vehicles, cut red tape for property developers and leave the difficult tax reforms until after the next election. It's a far cry from Albanese's promise in Labor's election platform, to be a government "as courageous and hardworking and caring as the Australian people are themselves."
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2 hours ago
- The Advertiser
Responsibility, not legacy driving Chalmers to reform
If those who can't remember history are condemned to repeat it, Jim Chalmers has as good a chance as any at avoiding the pitfalls of reformist treasurers past. Dr Chalmers is attempting the most ambitious process of economic reform by a Labor treasurer since Paul Keating's 1985 tax summit or Wayne Swan's tax forum of 2011. While Mr Keating's summit led to significant reform around income taxes, it buried his centrepiece policy - a broad-based consumption tax like the GST - for another 15 years. Mr Swan's attempt amounted to even less. History will drive Dr Chalmers as he prepares for his own economic reform roundtable - running from Tuesday to Thursday in Canberra - speculates veteran economist Saul Eslake. "As a biographer of Keating and a former staffer for Swan, he knows the difference between treasurers who are remembered as great treasurers and treasurers who aren't, and he'd like to be in the former group, I suspect," Mr Eslake says. Dr Chalmers says he doesn't see it in personal terms. Australia's economy has made a lot of positive strides in recent years, he says. Economic developments last week backed that up, with unemployment falling, real wages growing at a five-year high and a third interest rate cut in six months. But global volatility required more economic resilience, the nation's dismal productivity performance was holding back living standards and a growing budget deficit threatened Australia's future prosperity. He sees the roundtable as an opportunity to reform the country in ways that make Australians better off. "I do feel that all of us have a responsibility to use these positions of influence to strengthen the economy and, really, we can't afford as a country to waste the next decade like our predecessors wasted the last one," Dr Chalmers tells AAP. "So I feel that responsibility but don't see it in personal terms necessarily." Already, the consultation has been worth it. "We've shaken the tree for a whole bunch of ideas," he says. "We've focused the country's attention on our big economic challenges, primarily productivity, and we've helped people understand the kinds of trade-offs and challenges the government is grappling with." Dr Chalmers says he's optimistic he'll find common ground in moves to remove unnecessary regulation holding back productivity, housing supply and the clean energy transition. One example is the financial regulator ASIC's announcement on Wednesday that it will review a regulation called RG 97, which forces super funds to disclose stamp duty when reporting fees involved in housing investments. After feedback from investors at a roundtable in the lead-up to Dr Chalmers' summit, ASIC heard removing the requirement could boost housing investment by $8.7 billion and get an additional 35,000 homes built by institutional investors over the next five years. That's the low-hanging fruit. But there are signs the treasurer has been forced to lower his sights for more electorally difficult, large-scale tax reform. Dr Chalmers insists he and Prime Minister Anthony Albanese are singing from the same hymn sheet. But Mr Eslake believes the treasurer's ambition has been reeled in by his boss, "the staunchest defender of the status quo of any prime minister I can remember". "Those aspirations appear to have been shot down, as it were, by his much more cautious prime minister, who has made it clear, particularly in the tax space, they're not going to do anything they hadn't said they would do during the election campaign," he says. History shows governments can't push through major, contentious tax reform without receiving a mandate from the electorate. But Mr Albanese found himself with a slim majority in his first term, so felt he could only seek a light mandate at his second election, limiting his government to a minor agenda on tax. One of those policies, reducing the tax concession for holders of large superannuation accounts, has copped flak because it would tax capital gains on assets before they are sold and the increased value is realised. Mr Eslake would love to see the government use the roundtable as an opportunity to revisit the tax. "While I support the objective, that people with big super balances should pay more tax, I absolutely support that, I don't like the idea of taxing unrealised gains," he says. "Sometimes voters will give a government credit for saying, 'yes, I know we had this idea but we've listened to the people and we've realised it's not a good idea'." Dr Chalmers says he will listen to concerns about the policy but his intention is to proceed with the legislation regardless. "I try and have a genuinely consultative approach," he says. "But we announced that policy more than two and a half years ago, we're yet to hear an idea about a better way to go about it. I expect people will raise it at the roundtable and that's fine." While he stresses he doesn't want to pre-empt things by ruling any ideas in or out in advance, he acknowledges some policies, like raising or broadening the GST, will less likely receive his support. "The policy changes we are most likely to pick up and run with are the ones consistent with the government's values and directions," Dr Chalmers says. The government has consulted far and wide for reform ideas in the lead-up to the roundtable. Nearly 900 submissions have been received, ministers have held more than 40 roundtables of their own and regulators have pitched 280 new ways to reduce the burden of red tape. Dr Chalmers hopes he can find consensus to avoid the failures of past talkfests and has extended an invitation to shadow treasurer Ted O'Brien "in good faith". But he fears the coalition will be intentionally obstructionist, to make the roundtable appear a failure and inflict political damage on the government. "My preference would be that they're constructive about that opportunity," he says. "Unfortunately, they're showing no signs of that yet. I think it will go down badly in the room if they just try and turn it into some kind of political stunt." Opposition Leader Sussan Ley has accused Labor of choreographing the entire exercise to push through pre-determined policies, following a leaked Treasury document briefing Dr Chalmers on potential outcomes of the summit. "It just tells me this whole thing is a stitch-up," she told reporters on Thursday. "They're lining up an exercise at this productivity roundtable that is all about raising taxes. "We'll call it out when we see it." If those who can't remember history are condemned to repeat it, Jim Chalmers has as good a chance as any at avoiding the pitfalls of reformist treasurers past. Dr Chalmers is attempting the most ambitious process of economic reform by a Labor treasurer since Paul Keating's 1985 tax summit or Wayne Swan's tax forum of 2011. While Mr Keating's summit led to significant reform around income taxes, it buried his centrepiece policy - a broad-based consumption tax like the GST - for another 15 years. Mr Swan's attempt amounted to even less. History will drive Dr Chalmers as he prepares for his own economic reform roundtable - running from Tuesday to Thursday in Canberra - speculates veteran economist Saul Eslake. "As a biographer of Keating and a former staffer for Swan, he knows the difference between treasurers who are remembered as great treasurers and treasurers who aren't, and he'd like to be in the former group, I suspect," Mr Eslake says. Dr Chalmers says he doesn't see it in personal terms. Australia's economy has made a lot of positive strides in recent years, he says. Economic developments last week backed that up, with unemployment falling, real wages growing at a five-year high and a third interest rate cut in six months. But global volatility required more economic resilience, the nation's dismal productivity performance was holding back living standards and a growing budget deficit threatened Australia's future prosperity. He sees the roundtable as an opportunity to reform the country in ways that make Australians better off. "I do feel that all of us have a responsibility to use these positions of influence to strengthen the economy and, really, we can't afford as a country to waste the next decade like our predecessors wasted the last one," Dr Chalmers tells AAP. "So I feel that responsibility but don't see it in personal terms necessarily." Already, the consultation has been worth it. "We've shaken the tree for a whole bunch of ideas," he says. "We've focused the country's attention on our big economic challenges, primarily productivity, and we've helped people understand the kinds of trade-offs and challenges the government is grappling with." Dr Chalmers says he's optimistic he'll find common ground in moves to remove unnecessary regulation holding back productivity, housing supply and the clean energy transition. One example is the financial regulator ASIC's announcement on Wednesday that it will review a regulation called RG 97, which forces super funds to disclose stamp duty when reporting fees involved in housing investments. After feedback from investors at a roundtable in the lead-up to Dr Chalmers' summit, ASIC heard removing the requirement could boost housing investment by $8.7 billion and get an additional 35,000 homes built by institutional investors over the next five years. That's the low-hanging fruit. But there are signs the treasurer has been forced to lower his sights for more electorally difficult, large-scale tax reform. Dr Chalmers insists he and Prime Minister Anthony Albanese are singing from the same hymn sheet. But Mr Eslake believes the treasurer's ambition has been reeled in by his boss, "the staunchest defender of the status quo of any prime minister I can remember". "Those aspirations appear to have been shot down, as it were, by his much more cautious prime minister, who has made it clear, particularly in the tax space, they're not going to do anything they hadn't said they would do during the election campaign," he says. History shows governments can't push through major, contentious tax reform without receiving a mandate from the electorate. But Mr Albanese found himself with a slim majority in his first term, so felt he could only seek a light mandate at his second election, limiting his government to a minor agenda on tax. One of those policies, reducing the tax concession for holders of large superannuation accounts, has copped flak because it would tax capital gains on assets before they are sold and the increased value is realised. Mr Eslake would love to see the government use the roundtable as an opportunity to revisit the tax. "While I support the objective, that people with big super balances should pay more tax, I absolutely support that, I don't like the idea of taxing unrealised gains," he says. "Sometimes voters will give a government credit for saying, 'yes, I know we had this idea but we've listened to the people and we've realised it's not a good idea'." Dr Chalmers says he will listen to concerns about the policy but his intention is to proceed with the legislation regardless. "I try and have a genuinely consultative approach," he says. "But we announced that policy more than two and a half years ago, we're yet to hear an idea about a better way to go about it. I expect people will raise it at the roundtable and that's fine." While he stresses he doesn't want to pre-empt things by ruling any ideas in or out in advance, he acknowledges some policies, like raising or broadening the GST, will less likely receive his support. "The policy changes we are most likely to pick up and run with are the ones consistent with the government's values and directions," Dr Chalmers says. The government has consulted far and wide for reform ideas in the lead-up to the roundtable. Nearly 900 submissions have been received, ministers have held more than 40 roundtables of their own and regulators have pitched 280 new ways to reduce the burden of red tape. Dr Chalmers hopes he can find consensus to avoid the failures of past talkfests and has extended an invitation to shadow treasurer Ted O'Brien "in good faith". But he fears the coalition will be intentionally obstructionist, to make the roundtable appear a failure and inflict political damage on the government. "My preference would be that they're constructive about that opportunity," he says. "Unfortunately, they're showing no signs of that yet. I think it will go down badly in the room if they just try and turn it into some kind of political stunt." Opposition Leader Sussan Ley has accused Labor of choreographing the entire exercise to push through pre-determined policies, following a leaked Treasury document briefing Dr Chalmers on potential outcomes of the summit. "It just tells me this whole thing is a stitch-up," she told reporters on Thursday. "They're lining up an exercise at this productivity roundtable that is all about raising taxes. "We'll call it out when we see it." If those who can't remember history are condemned to repeat it, Jim Chalmers has as good a chance as any at avoiding the pitfalls of reformist treasurers past. Dr Chalmers is attempting the most ambitious process of economic reform by a Labor treasurer since Paul Keating's 1985 tax summit or Wayne Swan's tax forum of 2011. While Mr Keating's summit led to significant reform around income taxes, it buried his centrepiece policy - a broad-based consumption tax like the GST - for another 15 years. Mr Swan's attempt amounted to even less. History will drive Dr Chalmers as he prepares for his own economic reform roundtable - running from Tuesday to Thursday in Canberra - speculates veteran economist Saul Eslake. "As a biographer of Keating and a former staffer for Swan, he knows the difference between treasurers who are remembered as great treasurers and treasurers who aren't, and he'd like to be in the former group, I suspect," Mr Eslake says. Dr Chalmers says he doesn't see it in personal terms. Australia's economy has made a lot of positive strides in recent years, he says. Economic developments last week backed that up, with unemployment falling, real wages growing at a five-year high and a third interest rate cut in six months. But global volatility required more economic resilience, the nation's dismal productivity performance was holding back living standards and a growing budget deficit threatened Australia's future prosperity. He sees the roundtable as an opportunity to reform the country in ways that make Australians better off. "I do feel that all of us have a responsibility to use these positions of influence to strengthen the economy and, really, we can't afford as a country to waste the next decade like our predecessors wasted the last one," Dr Chalmers tells AAP. "So I feel that responsibility but don't see it in personal terms necessarily." Already, the consultation has been worth it. "We've shaken the tree for a whole bunch of ideas," he says. "We've focused the country's attention on our big economic challenges, primarily productivity, and we've helped people understand the kinds of trade-offs and challenges the government is grappling with." Dr Chalmers says he's optimistic he'll find common ground in moves to remove unnecessary regulation holding back productivity, housing supply and the clean energy transition. One example is the financial regulator ASIC's announcement on Wednesday that it will review a regulation called RG 97, which forces super funds to disclose stamp duty when reporting fees involved in housing investments. After feedback from investors at a roundtable in the lead-up to Dr Chalmers' summit, ASIC heard removing the requirement could boost housing investment by $8.7 billion and get an additional 35,000 homes built by institutional investors over the next five years. That's the low-hanging fruit. But there are signs the treasurer has been forced to lower his sights for more electorally difficult, large-scale tax reform. Dr Chalmers insists he and Prime Minister Anthony Albanese are singing from the same hymn sheet. But Mr Eslake believes the treasurer's ambition has been reeled in by his boss, "the staunchest defender of the status quo of any prime minister I can remember". "Those aspirations appear to have been shot down, as it were, by his much more cautious prime minister, who has made it clear, particularly in the tax space, they're not going to do anything they hadn't said they would do during the election campaign," he says. History shows governments can't push through major, contentious tax reform without receiving a mandate from the electorate. But Mr Albanese found himself with a slim majority in his first term, so felt he could only seek a light mandate at his second election, limiting his government to a minor agenda on tax. One of those policies, reducing the tax concession for holders of large superannuation accounts, has copped flak because it would tax capital gains on assets before they are sold and the increased value is realised. Mr Eslake would love to see the government use the roundtable as an opportunity to revisit the tax. "While I support the objective, that people with big super balances should pay more tax, I absolutely support that, I don't like the idea of taxing unrealised gains," he says. "Sometimes voters will give a government credit for saying, 'yes, I know we had this idea but we've listened to the people and we've realised it's not a good idea'." Dr Chalmers says he will listen to concerns about the policy but his intention is to proceed with the legislation regardless. "I try and have a genuinely consultative approach," he says. "But we announced that policy more than two and a half years ago, we're yet to hear an idea about a better way to go about it. I expect people will raise it at the roundtable and that's fine." While he stresses he doesn't want to pre-empt things by ruling any ideas in or out in advance, he acknowledges some policies, like raising or broadening the GST, will less likely receive his support. "The policy changes we are most likely to pick up and run with are the ones consistent with the government's values and directions," Dr Chalmers says. The government has consulted far and wide for reform ideas in the lead-up to the roundtable. Nearly 900 submissions have been received, ministers have held more than 40 roundtables of their own and regulators have pitched 280 new ways to reduce the burden of red tape. Dr Chalmers hopes he can find consensus to avoid the failures of past talkfests and has extended an invitation to shadow treasurer Ted O'Brien "in good faith". But he fears the coalition will be intentionally obstructionist, to make the roundtable appear a failure and inflict political damage on the government. "My preference would be that they're constructive about that opportunity," he says. "Unfortunately, they're showing no signs of that yet. I think it will go down badly in the room if they just try and turn it into some kind of political stunt." Opposition Leader Sussan Ley has accused Labor of choreographing the entire exercise to push through pre-determined policies, following a leaked Treasury document briefing Dr Chalmers on potential outcomes of the summit. "It just tells me this whole thing is a stitch-up," she told reporters on Thursday. "They're lining up an exercise at this productivity roundtable that is all about raising taxes. "We'll call it out when we see it." If those who can't remember history are condemned to repeat it, Jim Chalmers has as good a chance as any at avoiding the pitfalls of reformist treasurers past. Dr Chalmers is attempting the most ambitious process of economic reform by a Labor treasurer since Paul Keating's 1985 tax summit or Wayne Swan's tax forum of 2011. While Mr Keating's summit led to significant reform around income taxes, it buried his centrepiece policy - a broad-based consumption tax like the GST - for another 15 years. Mr Swan's attempt amounted to even less. History will drive Dr Chalmers as he prepares for his own economic reform roundtable - running from Tuesday to Thursday in Canberra - speculates veteran economist Saul Eslake. "As a biographer of Keating and a former staffer for Swan, he knows the difference between treasurers who are remembered as great treasurers and treasurers who aren't, and he'd like to be in the former group, I suspect," Mr Eslake says. Dr Chalmers says he doesn't see it in personal terms. Australia's economy has made a lot of positive strides in recent years, he says. Economic developments last week backed that up, with unemployment falling, real wages growing at a five-year high and a third interest rate cut in six months. But global volatility required more economic resilience, the nation's dismal productivity performance was holding back living standards and a growing budget deficit threatened Australia's future prosperity. He sees the roundtable as an opportunity to reform the country in ways that make Australians better off. "I do feel that all of us have a responsibility to use these positions of influence to strengthen the economy and, really, we can't afford as a country to waste the next decade like our predecessors wasted the last one," Dr Chalmers tells AAP. "So I feel that responsibility but don't see it in personal terms necessarily." Already, the consultation has been worth it. "We've shaken the tree for a whole bunch of ideas," he says. "We've focused the country's attention on our big economic challenges, primarily productivity, and we've helped people understand the kinds of trade-offs and challenges the government is grappling with." Dr Chalmers says he's optimistic he'll find common ground in moves to remove unnecessary regulation holding back productivity, housing supply and the clean energy transition. One example is the financial regulator ASIC's announcement on Wednesday that it will review a regulation called RG 97, which forces super funds to disclose stamp duty when reporting fees involved in housing investments. After feedback from investors at a roundtable in the lead-up to Dr Chalmers' summit, ASIC heard removing the requirement could boost housing investment by $8.7 billion and get an additional 35,000 homes built by institutional investors over the next five years. That's the low-hanging fruit. But there are signs the treasurer has been forced to lower his sights for more electorally difficult, large-scale tax reform. Dr Chalmers insists he and Prime Minister Anthony Albanese are singing from the same hymn sheet. But Mr Eslake believes the treasurer's ambition has been reeled in by his boss, "the staunchest defender of the status quo of any prime minister I can remember". "Those aspirations appear to have been shot down, as it were, by his much more cautious prime minister, who has made it clear, particularly in the tax space, they're not going to do anything they hadn't said they would do during the election campaign," he says. History shows governments can't push through major, contentious tax reform without receiving a mandate from the electorate. But Mr Albanese found himself with a slim majority in his first term, so felt he could only seek a light mandate at his second election, limiting his government to a minor agenda on tax. One of those policies, reducing the tax concession for holders of large superannuation accounts, has copped flak because it would tax capital gains on assets before they are sold and the increased value is realised. Mr Eslake would love to see the government use the roundtable as an opportunity to revisit the tax. "While I support the objective, that people with big super balances should pay more tax, I absolutely support that, I don't like the idea of taxing unrealised gains," he says. "Sometimes voters will give a government credit for saying, 'yes, I know we had this idea but we've listened to the people and we've realised it's not a good idea'." Dr Chalmers says he will listen to concerns about the policy but his intention is to proceed with the legislation regardless. "I try and have a genuinely consultative approach," he says. "But we announced that policy more than two and a half years ago, we're yet to hear an idea about a better way to go about it. I expect people will raise it at the roundtable and that's fine." While he stresses he doesn't want to pre-empt things by ruling any ideas in or out in advance, he acknowledges some policies, like raising or broadening the GST, will less likely receive his support. "The policy changes we are most likely to pick up and run with are the ones consistent with the government's values and directions," Dr Chalmers says. The government has consulted far and wide for reform ideas in the lead-up to the roundtable. Nearly 900 submissions have been received, ministers have held more than 40 roundtables of their own and regulators have pitched 280 new ways to reduce the burden of red tape. Dr Chalmers hopes he can find consensus to avoid the failures of past talkfests and has extended an invitation to shadow treasurer Ted O'Brien "in good faith". But he fears the coalition will be intentionally obstructionist, to make the roundtable appear a failure and inflict political damage on the government. "My preference would be that they're constructive about that opportunity," he says. "Unfortunately, they're showing no signs of that yet. I think it will go down badly in the room if they just try and turn it into some kind of political stunt." Opposition Leader Sussan Ley has accused Labor of choreographing the entire exercise to push through pre-determined policies, following a leaked Treasury document briefing Dr Chalmers on potential outcomes of the summit. "It just tells me this whole thing is a stitch-up," she told reporters on Thursday. "They're lining up an exercise at this productivity roundtable that is all about raising taxes. "We'll call it out when we see it."
