Treasurer responds to leaked advice from his own department | 7.30

Key Concepts

• Confidential Treasury advice release
• Budget sustainability
• Productivity
• Resilience
• GST (Goods and Services Tax) changes (base, rate, exemptions)
• Distributional impact of tax changes
• Economic reform roundtable
• Multinational tax arrangements
• Petroleum Resource Rent Tax (PRRT)
• Superannuation tax changes
• 1.2 million new homes target

1. Release of Confidential Treasury Advice

• The Treasurer acknowledges the release of confidential advice from the Treasury.
• He states he is "genuinely pretty relaxed about it" because such leaks are uncontrollable and governments selectively use departmental advice.
• He emphasizes the government's economic priorities: budget sustainability, productivity, and resilience. These priorities are the "themes of the economic reform roundtable."

2. GST Changes and Exemptions

• The Treasurer reaffirms his historical opposition to changing the GST due to its disproportionate impact on lower-income Australians.
• The interviewer suggests exploring changes to GST exemptions, specifically on private health and private education, which may not affect poorer Australians.
• The Treasurer does not want to "artificially limit or narrow" suggestions for the economic reform roundtable. While he hasn't been "attracted to" changes on GST exemptions, he's open to considering them.
• He notes that all GST revenue goes to the states, and proposed changes often involve complex compensation and state tax reform, which affects federal considerations.

3. Taxation and Revenue Raising

• The interviewer challenges the Treasurer, noting the government's reluctance to change GST, resource taxation, capital gains tax, and negative gearing. She questions what areas of taxation the government is focused on for revenue raising.
• The Treasurer points to past changes in multinational tax arrangements and PRRT as examples of the government's willingness to reform tax.
• He reminds the interviewer that raising revenue to fund income tax cuts is a common practice.
• He emphasizes that the economic reform roundtable will address a wide range of issues beyond tax, including AI, technology, productivity, approvals, better regulation, and Commonwealth-state reform.

4. Superannuation Tax Changes

• The interviewer references Treasury subheadings suggesting the government should "build on your superannuation tax changes."
• The Treasurer clarifies that subheadings cannot capture the full nuance of the incoming government brief.
• He states that the Treasury’s recommendation aligns with his public statements about making the budget more sustainable.
• The government's current focus is on legislating superannuation tax changes announced two and a half years prior. The government isn't proactively developing additional superannuation tax changes.
• The Treasurer remains open to ideas for budget sustainability, including savings, spending restraint, and addressing structural budget issues.

5. Housing Target

• The interviewer highlights the "bluntest heading" in the released documents: "The 1.2 million new homes target will not be met."
• She asks if the government is prepared to change what Treasury believes to be an unrealistic target.
• The Treasurer acknowledges the ambitious nature of the target and the difficulty in achieving it. He states that the government "makes no apologies for being ambitious about housing" and is investing significantly in the sector.
• He notes a recent "welcome tick up in dwelling investment."
• The interviewer presses the point, clarifying that the Treasury is explicitly recommending a change to the target, and asking why the Treasurer is ignoring this advice.
• The Treasurer reiterates the government's commitment to the target and the need to "do more and do better" to achieve it. He cautions against making assumptions about the entirety of the Treasury document.

6. Key Quotes

• Treasurer: "I am genuinely pretty relaxed about it. First of all, uh there's no point being angry about it. It's happened. So be it." (Regarding the release of confidential advice)
• Treasurer: "...the government's priorities are budget, sustainability, productivity, uh and resilience."
• Treasurer: "It's not possible for those subheadings to capture all of the nuance in a much bigger incoming government brief."
• Treasurer: "We make no apologies for being ambitious about housing because for too long it's been put in a too hard basket."
• Treasurer: "We do have an ambitious target. And I have said bluntly today on at least half a dozen other occasions. I've said again tonight, it will be hard to hit this target. That doesn't mean we shouldn't have an ambitious target. It means we will do more and we will do better in order to try and hit it."

7. Logical Connections

• The conversation flows from the leaked Treasury advice to specific policy areas like GST, superannuation, and housing. The leaked advice serves as a springboard for questioning the Treasurer's stance on various issues.
• The discussion of GST connects to the broader theme of tax reform and revenue raising. The interviewer challenges the Treasurer's commitment to certain tax policies, pushing him to identify alternative areas for revenue generation.
• The superannuation discussion is tied to the overarching goal of budget sustainability, highlighting the government's existing plans and openness to new ideas.

8. Synthesis/Conclusion

The interview centers on the fallout from the release of confidential Treasury advice and the government's response to its recommendations. The Treasurer remains steadfast in the government's commitment to its economic priorities, while also signaling a willingness to consider diverse ideas for reform at the upcoming roundtable. He defends the ambitious housing target despite Treasury's skepticism, reiterating the government's resolve to address housing affordability. While acknowledging the challenges ahead, the Treasurer emphasizes the importance of collaboration and ambition in achieving economic progress. The government appears open to suggestions from the public, but some policy positions appear firm.