Prime Minister Signals Key Tax Change with a Brief Statement

Anthony Albanese has opened the door to making much-needed changes to Australia’s tax system, while at the same time tempering expectations for an overhaul anytime too soon.

And while he insisted his focus was on the policies Labor took to the last federal election – pointing to the so-called “top-up” tax cut from this year’s budget – he hinted further change could be on the table.

“We have an agenda for tax that is decreasing tax next year and the year after,” Albanese said.

“That is our focus, the policies that we are implementing now.

“But of course, governments must always look to what they’ll do in the future.

“The job of reform is never done.

“You need to be continually making policy.”

The comments appear to be a slight change of tune from the prime minister, who was far more cautious and guarded when asked about tax reform than Treasurer Jim Chalmers in the lead-up to the roundtable.

The summit finished with widespread consensus from those within the room – which included politicians, economists, unions and business groups – that something needs to be done to address the generational inequality baked into Australia’s economy.

But exactly what the solution is remains a source of contention.

Albanese and Chalmers have both distanced themselves from economists’ proposals to raise and broaden the GST to bring it into line with comparable taxes in other nations, and the prime minister has previously poured cold water on changes to negative gearing and the capital gains discount for property investors.

“The major driver of this inequality is the treatment of income in retirement, where superannuation earnings and withdrawals are not taxed over the age of 60,” Grattan Institute chief executive Aruna Sathanapally told the roundtable last week.

“And so a retiree household, earning $100,000 per annum, can pay less than half of the tax of a working household with the identical income, purely on the basis of age.”

The government hasn’t ruled in or out changes to superannuation tax concessions, with Albanese and Chalmers saying any decision on reform will be a matter for the cabinet.

“I said before the summit that it was a roundtable taking place in the cabinet room, it wasn’t a meeting of the cabinet,” the prime minister said this morning.

“And it’s a good thing that there’s a promotion of ideas out there.

“In particular, I welcome the fact that people around that roundtable recognise that we have to deal with intergenerational equity issues.”