Treasurer flags tax reform to tackle declining economic productivity
Treasurer flags tax reform to tackle declining economic productivity
Published 18 June 2025, 8:50 am
Treasurer Jim Chalmers has said he'll make the case for significant tax reforms - a major expansion of the second term's agenda. Chalmers says the changes are necessary to revive flagging economic productivity, which has left Australians worse off.
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The Age
3 hours ago
- The Age
Treasurer opens the door to fresh tax cuts
Fresh tax cuts could be on the table at the Albanese government's August reform summit that Treasurer Jim Chalmers has signalled he will use as a springboard to go further than the policies Labor took to the last election. Chalmers used a speech to the National Press Club on Wednesday to flag Labor would go beyond the commitments it made before the May 3 election, which included a 2 per cent tax cut, as part of a productivity overhaul but stopped short of endorsing specific new policies. Tax reform, the Treasurer said on Tuesday, should lift productivity, simplify the system and improve intergenerational equity as well as 'lowering the personal tax burden and increasing the rewards from work.' Labor used a summit in 2022 to build support for a raft of union-friendly industrial relations changes and it has scheduled a three-day Productivity Summit for August where it will assemble industry, economic, social and political leaders to plan fresh reform. 'As the PM made clear here, delivering our commitments in housing and energy and across the board is the best place to start – but it's not the limit of our ambitions,' Chalmers said. 'They're a foundation not a destination.' 'We have a mandate to deliver the policies and plans we took to the election, and a duty to build on them.' At a press conference in Melbourne on Wednesday, Coalition finance spokesman James Paterson said the opposition acknowledged the system could be more efficient and was prepared to discuss tax reform as long as it did not increase rates. But he cautioned Chalmers could be planning to raise taxes instead. 'Jim Chalmers is like the arsonist pretending to be a firefighter turning up to put out the fires that he and the Albanese government themselves set in their first term,' Paterson said. Chalmers said that plans from the summit would have to be in the national interest, budget neutral or positive, specific and practical.
ABC News
3 hours ago
- ABC News
'Golden parachutes' for Australia's top corporate leaders drop to lowest level in 15 years
So-called "golden parachutes", or big pay-outs when the leaders of Australia's largest listed companies leave, might be a thing of the past. The Australian Council of Superannuation Investors' annual review of how much chief executive officers at ASX 200 companies are paid found termination payouts have dropped to their lowest level in 15 years. Total termination payouts have dropped to $8.4 million in the financial year 2024, down from $33.5 million the previous year. Some of that is explained by a smaller number of departures; however, the average payout per CEO also fell, from $1.97 to $1.4 million. "The research indicates this is saving Australian investors about half a million dollars per termination," said ACSI's executive manager of stewardship, Ed John. Mr John noted that there has been a continual decline in the size of payouts since the Corporations Act changed in 2009 after the global financial crisis. "This was a really major issue in Australia, and we saw more than $80 million of shareholders' money paid out to terminated CEOs before the law was changed in 2009," he said. "What those laws did was give shareholders a vote on large termination payouts. At Australia's largest listed companies, in the ASX 100, leaders' salaries come in at 55 times the average earnings of an Australian worker, despite flattening over the past decade. That's up from 50 times the average earnings in the 2023 financial year, but down significantly from 2014, when CEO salaries were 71 times the average worker's. "Australia is actually doing well relative to other markets where there's been a significant breakout in CEO pay," said Mr John. "There's been recent studies that show CEO pay is a multiple of about 106 times median salaries in the UK and in the US, that's actually more than 300 times in the largest companies." This table shows the chief executives with the highest realised pay (which includes fixed pay and bonuses received): The top earner was US-based Robert Thomson, who runs News Corporation, and earns almost $42 million a year. The only woman on the list, Shemara Wikramanayaka, CEO of Macquarie Group, made just shy of $30 million last financial year. The median realised pay for ASX 100 leaders, which includes fixed pay and bonuses received, was $4.15 million, compared to $3.96 million in 2014. Corporate governance expert, Swinburne University's Helen Bird, said the two-strike rule against remuneration has had a dampening effect on pay rises. It is designed to hold directors accountable for executive salaries and bonuses. That is because if shareholders vote against a company's remuneration report two years in a row, the entire company board can face re-election. While salaries at the very top end of town have been (relatively) constrained in recent years, the bosses of smaller listed companies are enjoying increasingly generous paydays. The highest-paid Australian-based chief executive was Lovisa boss Victor Herrero. The jewellery chain has a market capitalisation of $3.6 billion. In comparison, the Commonwealth Bank's market value is around $302 billion. CEO pay at smaller listed companies has increased over time, with the median climbing from $1.74 million in 2014 to $2.2 million in 2024. "The trend in small companies is interesting, so we'll have to do further work on this," said Mr John. Most chief executives received a bonus in 2024, with just five of the 142 eligible leaders missing out altogether, with most tied to company performance. Those left without a bonus were Tony Lombardo from Lendlease, Credit Corp's Tom Beregi, Mark Allison from Elders, Jamie Pherous from Corporate Travel Management, and Julian Fowles from Karoon Energy. The median CEO bonus was paid at just under 66 per cent of the maximum, which is in line with the long-term trend. "There is a concern among investors that in some places these are becoming a given or an expectation," said Mr John. "What we see is that the fixed rate of pay, which is the very basic salary of a CEO, hasn't changed much, but they're still getting very significant bonuses, up to 60-70 per cent of their entitlement is being paid, so they're getting quite significant incentives to work harder," said Ms Bird.
ABC News
3 hours ago
- ABC News
Seeking a reset on the environment debate, Murray Watt gathers business and conservation groups in search of a deal
Environment laws in desperate need of change will require business groups and environmentalists to compromise, the environment minister warns, ahead of a major meeting he hopes can be used to reset the debate and find common ground on the outdated act. Representatives for miners, environmentalists, farmers, urban developers and more are due to meet with Environment Minister Murray Watt today to hash out disagreements on long overdue reforms to the laws governing Australia's environment. The heart of the Environment Protection and Biodiversity Conservation (EPBC) Act has changed little since it was written in 1999, and two successive terms of government have failed to update it, following a major review under the former Morrison government that concluded it was broken. The Graeme Samuel review in 2020 found that Australia's natural environment was in decline, and outdated EPBC laws were allowing piecemeal decisions that cumulatively led to the environment and Indigenous heritage being harmed. "The environment has suffered from two decades of failing to continuously improve the law and its implementation. Business has also suffered," Mr Samuel wrote at the time. This morning, Senator Watt will convene a meeting of the minds that will include business and mining groups, environment and renewable energy stakeholders, agriculture, urban development, and others in the hopes that some agreement can be struck that would see a rewritten EPBC Act passed this term. "I think everyone knows we didn't get as far in the last term as we hoped, and I think all participants in this debate are disappointed we weren't able to make more progress last term," Senator Watt said. "I think it's very easy in these sorts of big debates for people to get in their corners and take their own position and not listen enough to the 'other' side. This is a good opportunity to hear from everyone." The minister said since taking over the portfolio from Tanya Plibersek last month, he had met one-on-one with many of the stakeholders in the debate, and was optimistic a deal could be reached. "There's a lot of goodwill there … people have said to me they are prepared to give and take, and they know there will need to be some compromise," he said. "Everyone agrees that our current laws are broken. They are not working for the environment, they are not working for business." Last term, the government proposed reforms to speed up decisions on approvals, rewrite regulations to focus on environmental outcomes that would avoid habitat degradation over time by numerous small projects, and establish an environmental watchdog to enforce the laws. The 2020 Samuel Review, handed down by then-environment minister Sussan Ley, recommended an overhaul underpinned by what would be called 'National Environmental Standards' that could take a big picture approach to protecting habitats, with an independent Environmental Protection Authority ensuring the standards were kept. But the government was unable to find a pathway through parliament to pass its laws, and Prime Minister Anthony Albanese ultimately stepped in to shelve them, after protest from West Australian Premier Roger Cook that it could harm the state's gas and mining projects. Taking on the role, Senator Watt confirmed he would rewrite the laws and try again. Senator Watt said after the government's romping election win, it had a mandate to pass its reforms, and there was a "unique" opportunity to do something bigger that could "solve a whole bunch of problems in one go". That included discussion of whether to stitch back together reforms to environmental approvals with the creation of a new federal environment watchdog, after those proposals were split into two bills by Ms Plibersek in an attempt to see some of it passed last term. Senator Watt's decision last month to approve the operating life of Woodside's North West Shelf project, the largest gas installation in the country, out to 2070, prompted an explosion of criticism from environmental groups, and reignited debate over whether energy projects seeking environmental approval should have to answer climate concerns in those applications. Ms Plibersek's original 'Nature Positive Plan' was intended to include "mandatory consideration" of climate change in environmental planning, but that was walked back as resistance to the EPBC reforms mounted. The minister said he was open to hearing suggestions that climate change considerations be written into the laws, but in an early warning likely to put the Greens offside, said he did not consider that to be a good idea. "I'm not ruling things in or out at this early stage, but I don't think it's a good idea to duplicate laws to achieve the same purpose. We have strong laws in place which the Greens party voted for to require heavy industry to reduce its emissions year-on-year," Senator Watt said. "I would make the point that the North West Shelf project, like all heavy-emitting projects, is already subject to the government's 'Safeguard Mechanism', which requires it to reduce its emissions by about 5 per cent every year and to get to net zero by 2050 "We do already have strong rules in place … they may be sitting in a different law to the EPBC laws, but we do have those laws, and companies are now following them." The safeguard mechanism requires the nation's biggest polluters in the mining, oil and gas, transport, manufacturing, and waste sectors to reduce their emissions each year. However, those rules only apply to the direct emissions of those facilities, such as the recently extended North West Shelf's emissions from drilling for and processing gas, not the much larger "scope three" indirect emissions from households and industry consuming the fuel they sell. And that mechanism does not apply to projects unless their direct emissions are likely to be above 100,000 tonnes a year (as a comparison, North West Shelf's direct emissions are roughly six million tonnes a year). Environmentalists have argued for a "climate trigger" in the EPBC laws that could be used to block projects based on their climate impact. Mr Albanese, when he was shadow environment minister in 2005, was among those who proposed including a climate trigger in the laws, though as prime minister, he has argued that the safeguard mechanism covers climate concerns. Labor backbencher Jerome Laxale told the ABC last week he would personally agitate for climate considerations to be included in the new EPBC Act. The government will need either the support of the Coalition or the Greens for reforms to be passed through parliament. "The EPBC reform train is leaving the station and I want to have as many people on that train as possible, rather than standing behind at the platform shouting and criticising," Senator Watt said. Senator Watt said he was determined to make sure this term would be the one where the laws were finally brought up to date.
