Treasurer Jim Chalmers says the best defence against global economic uncertainty is a more productive economy and a more sustainable budget.
Just days after announcing an economic roundtable for 19-21 August, where tax reform will be on the agenda to boost productivity, resilience and budget sustainability, Chalmers reinforced that these measures are essential to safeguarding the local economy amid global volatility.
Speaking on ABC Radio, Chalmers said: “The reason we’re gathering this reform roundtable, is because the best defence against all this global economic uncertainty is a more productive economy, a more sustainable budget and more resilience in the face of what’s happening around the world.
“It’s the best way to lift living standards and create more opportunities in our economy and in our society. So we’re bringing people together – our belief, the prime minister’s belief, and right through the government is the best way to make progress is together. That’s what this reform roundtable is all about.”
He said the roundtable’s role is to find common ground and to shape the next steps through consultation and collaboration.
Earlier in the week, the Treasurer said the evolution in Australia’s revenue base – of the back of an ageing population and global net zero transition – is one of the reasons tax reform is so “crucial” to budget sustainability.
“Tax reform is bigger than just managing the difficult balance between spending and collecting,” he said. “It’s also about lifting productivity and investment. Lowering the personal tax burden and increasing the rewards from work. Creating a more sustainable, simpler system to fund vital services. And improving intergenerational equity.”
While he declined to reveal what direction tax reform might take, Chalmers said the roundtable – bringing together government, business, unions, civil society and experts – will serve as a forum for ideas, alongside a round of public consultation.
“It may be that there are some things that come out of the roundtable which could be implemented relatively quickly. We don’t know yet. And so let’s see what people bring to the table,” Chalmers told the ABC.
“I’ve been so encouraged by the spirit with which people are approaching this opportunity, and I don’t want to artificially limit that or narrow that by ruling things in, ruling things out or thinking about sequencing before we’ve got all the ideas on the table.”
Ultimately, what’s become clear from Chalmers’ media engagements, the upcoming August roundtable will test the nation’s appetite for reform and act as a forum to explore trade-offs – particularly around boosting productivity, improving budget sustainability and enhancing economic resilience.
While he ruled out walking back on current policies – such as Division 296 – Chalmers invited new ideas, stating tax must be part of the national reform conversation. He stressed that the goal is not to reverse commitments, but to consider “next steps” with a high level of ambition.
Responding to the Treasurer’s announcement, Chartered Accountants Australia and New Zealand (CA ANZ) said tax reform can help address key issues facing the economy, including sustainability, resilience and productivity.
“I’m glad to see the Treasurer acknowledged this in his address today, and we look forward to seeing tax reform firmly on the agenda at the productivity roundtable,” CA ANZ CEO Ainslie van Onselen said.
“Our system is over-reliant on personal income tax, and that is unfairly punishing Australians also facing cost of living and housing pressures.
“We agree, we need to move beyond calling for tax reform, and actually do it.”
Highlighting that CA ANZ has long advocated to reduce Australia’s current over-reliance on income tax, van Onselen added: “We need to look at the appropriateness of tax concessions, as well as potentially harmonising how our state and federal taxes work together, to boost efficiency and equity across the board.”
