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Economy – the need for tax reform

Economy – the need for tax reform

Ms SPENDER (Wentworth) (14:47):

My question is to the Treasurer.

Australians want their governments to focus on the long term, not the news cycle. They understand we need economic reform because our fiscal arrangements are not sustainable. But past governments, Labor and Liberal, have not delivered the fundamental changes necessary for long-term growth and prosperity. With a trillion dollars of debt, high inflation and low productivity, the choices have only gotten harder, so when will we see a real tax and spending reform agenda from this government?  

Dr CHALMERS (Rankin—Treasurer) (14:48): I thank the member for Wentworth for her question and for her interest in all of the areas in her question. It is true that governments are called to deal with the long-term opportunities in our economy at the same time as we deal with some of the nearer-term pressures as well. If we think about the 2020s as Australia's defining decade, and about how we set ourselves up for another generation of prosperity like that which was delivered by the reform agendas of the eighties and nineties, we need to think about how we manage the big shifts when it comes to energy transition, how we manage data and digital shifts and the opportunities there, how we make sure that we've got the workers that we need for the care economy and the services economy, and how we broaden, deepen and diversify our industrial base in the ways that so many of the cabinet ministers over here are engaged in. So I think it is crucial right now, in the 2020s, that we have the capacity to work on the longer-term agenda while we deal with this inflation challenge in our economy.

The National Reconstruction Fund is part of our efforts. The safeguard mechanism is part of our efforts. The Housing Australia Future Fund is part of our efforts. All of these things which are before the parliament will help determine whether we succeed in the 2020s and into the 2030s—whether we can reform and change our economy so that we're managing the shifts in the economy but maximising the opportunities that flow from those changes at the same time. We do need to be able to do that while we deal with his nearer-term inflation challenge in our economy in ways that I outlined in the answers to other questions before.

Now, when it comes to tax reform, which I understand was the main feature of the member's question, we are reforming the tax system in modest, methodical but meaningful ways when it comes to superannuation tax concessions, when it comes to aligning the off-market and on-market treatment of share buybacks and when it comes to multinational tax reform, one of the key things we discussed with our international partners at the G20 and on other occasions as well. These tax reforms, these modest, methodical but meaningful changes to our tax system, will make our budget more sustainable over time. They will make it more sustainable than it would be without these tax changes.

In addition to that, we do have a whole bunch of other priorities when it comes to our economic plan: fixing our supply chains, lifting the speed limit on the economy so we can grow without adding to inflation. Tax is part of that but not the only part of that. I look forward to working closely with the crossbench, with the member for Wentworth and with anyone who understands we have a big opportunity in this country to turn the difficulties of the last few years into immense opportunities for our country. More importantly, economic reform is part of that and we are up for it.

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