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West Australian
2 hours ago
- West Australian
Three days to turn up ideas for three budgets: Jim Chalmers has big roundtable ambitions
By Thursday evening you should know what the Albanese government wants to do with its next three years in power. At least, that's the best case scenario for Treasurer Jim Chalmers. But the wooden bugs inlaid in the ceiling of the Cabinet room have heard a lot of hot air and ideas in their decades. So, too, the old political hands who suspect next week's economic roundtable will be another in a long line of ambitious talk fests that lead to minimal change. The money man and his hand-picked roundtable participants are sifting through hundreds of suggestions for how to fix poor productivity, a budget mired in red ink and bolster economic resilience. They'll spend three days next week in the sacred Cabinet room, locked away from distractions and prying eyes, aiming for genuine conversation to thrash out potential solutions. Dr Chalmers has promised a late and lengthy press conference on Thursday evening to relay the next steps to the public. But he insists that even if only a handful of concrete pledges emerge the intense consultation over the past several weeks has already made the exercise worth it. 'We've shaken the tree. There's a whole bunch of ideas. We've got people grappling with the big trade-offs that governments have to make in economic policy,' he told Agenda during a one-on-one interview this week. Prime Minister Anthony Albanese and his Treasurer unleashed the beast in June when they announced the roundtable in twin National Press Club speeches delivered a week apart. The Government has expressed surprised at just how many ideas people had stashed away and were willing to voice. Treasury has received almost 900 submissions and the Productivity Commission another couple of hundred for its 'five pillars' reports feeding in to next week's talks. The core group of 22 attendees spending the whole three days next week in the cabinet room, and the 25 others invited to attend individual sessions, will bring their own thoughts. Regulators have also offered up 140 new ideas to cut red tape. Dr Chalmers has met with more than 75 of the nation's top business leaders over the past month, while ministerial colleagues have collectively heard from more than 700 people across 41 pre-roundtable meetings in their own portfolios. In fact, the sheer onslaught of suggestions has led the Government to tamp down expectations over the past fortnight. 'I see this as three days to help inform three budgets,' Dr Chalmers said. 'There'll be a lot of work that begins on Thursday, not ends on Thursday. 'I'm pretty confident that the directions that people are encouraging us to take, that there will be elements of that that we'll be able to pick up and run with.' Mr Albanese has also been keen to emphasise that the talks might be in the Cabinet room, but they are not Cabinet discussions. His Government will pick and choose what it does with the suggestions that emerge — and that will take time. 'There will be some things that are put forward that can be done immediately. Some things can be the result of legislation, some things will feed into next year's Budget, some things will feed into a future commitments about future terms,' he said this week. Many of the core participants are reluctant to outline their thinking publicly ahead of the roundtable, but there is clear consensus already building in areas such as speeding up environmental and planning approvals and reducing duplication across State and Federal processes. This was reflected in leaked Treasury advice obtained by media this week which set out options for speeding up approvals and clearing a backlog of housing applications as possible outcomes from the talks. Dr Chalmers, who has been briefed weekly on all the submissions, said his interests lay in making the Federation work more effectively, better regulation and faster approvals. 'My broad view, as you know, is that if it's good for Western Australia, it's usually good for the nation,' he said, talking about whether the States would get on board. 'WA plays a key defining role in our national economy, and so we work closely with Rita and Roger and the West Australian colleagues to find these win-wins and to make progress.' State treasurers, meeting on Friday, agreed to work across jurisdictions on faster approvals for major projects, cutting red tape and reducing overlap, boosting competition and building more homes faster. They also agreed to continue work on a model for road user charges — needed to replace fuel excise as more people start driving EVs — but cautioned that would take time. Independent MP Allegra Spender has been speaking to fellow roundtable participants and said there was clear recognition across the board that environmental laws were failing to protect nature and stymieing progress on renewables and housing. 'Reforming these in line with Graeme Samuel's recommendations is an urgent priority for almost everyone I've spoken to,' she said. Commonwealth Bank chief executive Matt Comyn has also pointed to housing supply and the energy transition as key priorities, while unions back a 'fast to yes, faster to no' approach for renewables projects. 'We think there is a growing consensus on the need to tackle intergenerational inequality in Australia. We hope the roundtable participants work together to help address this,' ACTU secretary Sally McManus said. ACCC head Gina Cass-Gottlieb has also been speaking with other participants and a spokeswoman said there was a shared interest in competition, innovation and 'right fit regulation'. Red tape is also in the sights of business participants. Council of Small Business Organisations Australia chair Matthew Addison said that 'regulatory burden and complex compliance obligations (were) impacting businesses of all sizes'. The Business Council of Australia, representing some of the nation's largest companies, this week estimated red tape cost the country more than $110 billion a year in compliance costs and called for a target to cut this by 25 per cent by 2030. The idea is similar to one put forward by the Productivity Commission as well as that being pursued in the UK by Keir Starmer and is in line with Dr Chalmers' thoughts about the 'Abundance agenda' (after Ezra Klein and Derek Thompson's influential book). Better regulation aside, artificial intelligence and tax are proving to be more contentious topics. Take the proposal from the Productivity Commission to lower company tax rates for all but the 500 largest businesses, partially offset by a new 'cashflow tax'. Big business rejected the whole plan, but COSBOA backed the company tax cut element, although it signed on to a BCA-led statement against the cashflow tax element. Mr Comyn said of course the Commonwealth Bank would like a tax cut, 'but I don't think that's the highest priority'. Last week, Dr Chalmers warned participants that he wanted them to start talking before gathering in Canberra and that any ideas costing money had to come with suggestions on how to offest the extra burden. His message has been heeded in part. Not the money part, though. 'We need to make sure that the ideas that people put forward are affordable, and I see that our political opponents and others have criticised that,' Dr Chalmers said. 'But the alternative to that is telling people to bring unaffordable ideas. The alternative to this roundtable is to involve people less.' One person — involved in preliminary discussions but not heading to Canberra — thought Treasury should simply reject any proposals that didn't detail where the money would come from. Ms Spender says she believed there was appetite for a proper tax reform process, while the BCA called for a snap three-month review. 'Everyone acknowledges that we can't fix our tax system in a single afternoon, but there's appetite to kick start a reform process that can examine the many interesting proposals put forward to date,' she said. But shadow treasurer Ted O'Brien indicated in a speech on Friday that taxes were a red line for the Coalition. 'From recent media reports, it looks like the roundtable has been engineered to rubber stamp a doubling down on Labor's failed tax and spend strategy,' he said. 'Let me be crystal clear: the Coalition will be no such rubber stamp. And we reject any suggestion Labor has a mandate to hike taxes.' He also likened the roundtable to Willy Wonka's famed chocolate factory, with Dr Chalmers as the candy man himself offering up 'the tasty temptation of higher taxes mixed with big doses of debt', in a speech that might leave the Treasurer reconsidering Mr O'Brien's invitation. Nevertheless, Dr Chalmers said he had an 'overwhelming sense of gratitude' that people had largely approached the talks in the right spirit. 'I don't see my role as … banging heads together. I'm trying to draw the threads together where there is sufficient common interest and sufficient common ground for the Government to do further work,' he said. 'Our job is to make the most of this opportunity before this window of opportunity shuts.'
News.com.au
2 hours ago
- News.com.au
Treasurer Jim Chalmers says ‘not surprising' Australia's birthrate has slowed but rejects bringing back baby bonus
Jim Chalmers says it's 'not surprising' Australia's birth rate has slowed given the 'financial pressures' on families, however, he has rejected calls to bring back the Costello-era $3000 baby bonus in favour of 'better, more enduring ways to support parents'. The comments come ahead of Labor's highly anticipated Economic Reform Roundtable, which will bring business and unions groups to Canberra for three days of intensive discussions on how to lift Australia's sluggish productivity rate. 'It's not surprising that the birth rate has slowed given the pressures on people, including financial pressures,' he told NewsWire. 'We want to make it easier for them to make that choice. If they want to have more kids, we want to make it easier for them to do that, and that's what motivates a lot of our changes.' However, as Australia struggles to boost the economy, and in turn raise wages and living standards, it's also contending with a sluggish birth rate of 1.5 births per woman, which is under the 2.1 figure needed to sustain population growth. Boosting productivity was also essential to ensuring that Australia's ageing population could weather economic headwinds, the Treasurer said. 'Now, the reason why the productivity challenge is important to this is because our society is ageing, and over time, there will be fewer workers for every person who's retired,' he said. 'We need to make sure that our economy is as productive as it can be, as strong as it can be to withstand that demographic change, which is going to be big and consequential.' Mr Chalmers also spurned calls from former Liberal prime minister John Howard to resurrect the $3000 baby bonus cash incentive bought in by his treasurer Peter Costello in 2004. The Queenslander's parliamentary colleagues have advocated for other measures to spur a baby boom, including Nationals senator Matt Canavan's proposed $100,000 loans for first-time parents to buy their first home. Parliament's maverick father of the house Bob Katter also proposed incoming splitting for parents so they paid less overall tax. For example, a household where two parents earn a combined income of $150,000 pays about $10,000 less tax than a household with a single worker pulling in $150,000. Instead, Mr Chalmers said Labor's supports were 'more enduring,' pointing to policies like guaranteeing three days of subsidised child care for families earning less than $533,280, increasing paid parental leave to 25 weeks, and paying super on government-funded parental leave to tackle the gender superannuation gap. 'That policy from a couple of decades ago was a one-off payment, and we found ways to support parents which is meaningful and enduring, not one off. That's the main difference,' he said. 'Our political opponents … haven't said how they would fund that, how they would pay for that, whereas we've been carefully budgeting all this help for parents in our budgets and providing that in an ongoing way. 'We're always in the market for ideas about ways to support families. We've got all this cost-of-living help rolling out, (like) all the childcare changes. All of that, I think, demonstrate a willingness on our part to support families (in making) decisions about whether they want to have kids or have more kids.' Mr Chalmers says the 'generational anxiety' plaguing Australia youth simultaneously contending with rising house prices and inflation will also be a touchstone ahead of the economic reform roundtable, which at one point was called the productivity roundtable before it was quietly changed. He concedes productivity can 'sound like a cold lifeless piece of economic jargon' but explains the metric is 'about efficiency' and 'about how we make our economy stronger to deliver for more people so that they can earn more and get ahead and be better off'. Generational equality has also fuelled some of the roundtable's more controversial submissions, including the Australian Council of Trade Unions' call to limit negative gearing and capital gains tax concessions on just one property by the next five years, and teal Wentworth MP Allegra Spender's overhaul of the tax system that she says is overly reliant on income taxes. The ACTU has also reiterated calls for a four-day work week, while the Productivity Commission irked business bodies with calls for a new 5 per cent cash flow tax and a road user charge to ensure EV drivers, who skip the fuel excise, also contribute to road upgrades. How to best handle the opportunities posed by artificial intelligence, while mitigating the risks and job losses, will also be debated on day two; however, Mr Chalmers is quietly optimistic. 'I think one of the big challenges, broadly, but especially for young people, is how they adapt and adopt technology, so a big focus will be how do we skill people up to use artificial intelligence so that it's it works for them, not against them, particularly in the workplace,' he said. Mr Chalmers will use talks to create consensus on what he says is the 'most transformative influence on our economy and our lifetime', and while he doesn't want to pre-empt decisions, education settings and regulation will likely be immediate action points once talks end on Thursday. '(AI) has to change the way we think about skills and capabilities, and I'll work closely with colleagues in the education portfolios, the industry portfolio and elsewhere to make sure that we've got the settings right,' he said. 'Whether it's regulation, whether it's education, in a whole bunch of areas, governments have to catch up and keep up with the accelerating pace of technological change.'
News.com.au
2 hours ago
- News.com.au
Why every Australian is losing $3600 a year as a result of Australia's failure to tackle productivity
Treasurer Jim Chalmers has put a price tag on Australia's failure to make big productivity gains in the last decade warning it is costing every Australian thousands of dollars in lost wages. Ahead of the Albanese Government's economic roundtable set to kick off in Canberra next week, the government is laying out the problem it insists is a major focus of its second term: productivity. And the cost of that failure to boost productivity is having a real impact on Australians' ability to secure a pay rise and businesses' ability to turn a profit. It's a factor in why it's harder to buy a family home, pay for the groceries at the shops and why it takes too long to build infrastructure and build new homes. In simple terms, productivity means producing more goods and services from the same inputs – using new skills or technologies such as artificial intelligence or by coming up with more effective ways to work. But Australia's productivity gains have stalled, leading some workers and businesses to feel they are going backwards. New data prepared by the Albanese Government claims the productivity slowdown under the Coalition government is costing Australians as much as $3600 a year in lost income. 'The wasted decade under the Coalition is costing Australians dearly,'' Treasurer Jim Chalmers told 'This big drop in productivity growth has hit Australians in the hip pocket. 'Our predecessors ignored the warning signs and people are paying the price for it. 'We don't intend to waste the next decade like our predecessors wasted the last. 'We don't pretend it will be easy and it certainly won't be quick, but we've got a big and broad agenda aimed at tackling this productivity challenge and we're keen to add to it where we responsibly can.' The arithmetic on the $3600 cost is based on the idea that productivity was growing at 2 per cent per annum when the Coalition came to office but just 0.1 per cent per annum in the year before Covid-19 hit. According to the Albanese Government, if productivity had grown at 1.5 per cent - as forecast in the Budget - instead of 0.9 per cent in the six years prior to Covid, the level of real and nominal GDP would have been 3.6 per cent higher at the start of the pandemic. Even allowing for the volatility since then, the Treasurer argues that the 3.6 per cent shift in the level of nominal GDP is equivalent to around $3600 in lost income per capita in 2023-24. Dr Chalmers said the figures underlined why the Albanese Government was determined to talk about solutions. 'This is about setting the next generation of Australians up for success long after the next election cycle,'' he said. 'It's about higher wages, higher living standards and a better future for our children and grandchildren.' Business leaders have suggested one way forward is reduced regulation and lower tax. Unions have suggested a four day working week, negative gearing reforms and changes to capital gains tax. Lower pay rises, weaker consumer spending, softer business profits and declining living standards is the problem the government wants to tackle. The Treasurer has previously suggested that the productivity debate has 'focused too narrowly on one or two issues', and that the task now is 'broadening that focus out'. 'The challenge, however, is immense. Our productivity growth over the past decade was the worst in 60 years,'' Business Council of Australia chief executive Bran Black said. 'And yet, with all shoulders to the wheel, and agreement on what can and must be done, we believe Australia is capable of much more over the next decade. 'Here's how: First and foremost, we need to deliver our major projects and endeavours faster. It's not acceptable that building a renewable energy project in Australia can take more than two years of approvals before shovels are in the ground. 'Countries that get there faster will deliver better and more outcomes for their citizens, and that's why we're determined to work constructively with the government on implementing federal project approvals and reforms that get it right for both the environment and for business.'
