Latest news with #taxreform
The Guardian
an hour ago
- Business
- The Guardian
Labor eyes ambitious tax reform but it must be ready for vicious backlash from vested interests
There was a hint of frustration in Anthony Albanese's voice when he spoke to the Canberra press gallery for the first time after Labor's thumping election victory on 3 May. In the prime minister's courtyard at Parliament House, he was asked if he planned to use his soaring political capital for major reforms of the tax or superannuation systems. Badly needed, and often talked about in the abstract, this kind of action had waited for a long time for the necessary political ambition. Albanese said he wouldn't get ahead of himself in the opening weeks of his second term in power. He insisted Labor had already been bold, delivering on its promises in the first three years. Sign up for Guardian Australia's breaking news email Fast forward to Wednesday, while the PM was pressing the diplomatic flesh at the G7 summit in Canada, the treasurer, Jim Chalmers, showed the first signs of that reform ambition. In a speech to the National Press Club in Canberra, Chalmers signalled Labor was willing to consider changes to the tax system at the looming productivity summit in August, recognition that fixing longstanding problems was needed to right the budget's structural deficit. The speech was an implicit recognition that Labor's tax changes in the first term barely touched the edges of deeper structural problems in Australia's tax system. Chalmers, a student of economic reformer Paul Keating, said any progress on productivity or budget sustainability would be impossible without proper consideration of tax reform, a challenge he conceded would be 'hard and contested' with benefits that were not always immediate. Even someone with a passing interest in federal politics should know the scale of the problem is vast: some $1tn in government debt and soaring spending, held up by a system overly reliant on income tax from an ageing population – a problem that will only get worse due to the ageing population. For years Chalmers has been eager to point out the five main pressures on the budget are not going to get any easier without proper attention. Spending on health, aged care, the national disability insurance scheme, defence and interest from government debt will keep treasurers and finance ministers up at night for years to come. The government's revenue base is being eroded from declining fuel and tobacco excises, and in the long term will take a hit from lower tax receipts from fossil fuel extraction. The early stages of Labor's plans seem to include lower income taxes, but no changes to the 25-year-old GST. Chalmers is upfront, saying tax overall needs to rise. Whether it is indeed possible to meaningfully lower income taxes without broadening or raising the GST is unclear. Economists argue taxing consumption through mechanisms such as the GST is efficient, while taxing incomes isn't. Parliamentary Budget Office figures show the GST causes about 8 cents in economic loss for each dollar gained, compared with 24 cents for income tax or 40 cents for corporate tax. Two major pieces of work should be the starting point, acknowledging that any change which makes it into law will inevitably create some winners and some losers. Chalmers was working for then treasurer Wayne Swan when Ken Henry handed his landmark tax review to the Rudd government in late 2009. Both men marked up copies of the document over the course of the summer, leaving them to 'disgorge' sand from the beach by the time they made it back to Canberra. Many of the review's 138 recommendations never saw the light of day. Today, the former Treasury secretary says, the system is in even worse shape. Henry has called for wholesale reform, including increasing the GST to pay for company and personal income tax cuts, as well as comprehensive road user charging, replacing stamp duties, increasing taxes on super profits from the mining sector, an economy-wide price on carbon and changes to fringe benefits and superannuation taxes. Henry's review is best remembered for recommending the mining tax, an idea which prompted a furious campaign of resistance against the government. Chalmers has acknowledged the politics of the review were mishandled, that it was kept secret too long before ultimately crashing into Labor's leadership wars. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion The second substantive report with proposals ready to go is the white paper released by teal independent Allegra Spender in the last term of parliament. In a different political reality, Spender would be part of the Liberal party's economic team, and her significant work comes with buy-in from Henry and other leading tax voices including Robert Breunig from the Australian National University's Tax and Transfer Policy Institute, and Robert Carling from the Centre for Independent Studies. Chalmers assigned a staffer to monitor the white paper process, at a time when Spender was one of the few MPs actually prepared to talk about meaningful tax reform. The Wentworth MP wants the coming reform push to look at business investment and corporate taxes, the under-performing petroleum resource rent tax, road user charging, indexation of income brackets, unhelpful state taxes and the GST. Spender has more guts than either of the major parties in one specific area as well. She has called for a review of Western Australia's insanely generous GST deal, which respected economist Saul Eslake calls the worst public policy decision of the 21st century. WA's state Labor government handed down a budget with a $2.5bn surplus this week, but taxpayers from every other state are paying $54bn to the state due to perceived unfairness in the grants commission process. This special treatment agreed by then treasurer Scott Morrison and locked in by Anthony Albanese to maintain Labor's political stocks in the West will see the nation's richest state receive an extra $21.1bn from federal taxpayers over the next four years alone. Family trusts, the legal tax structures used by millions of Australians to lower their tax liabilities, also look likely to come under increased scrutiny as part of the latest reform push. Chalmers and Albanese will convene their productivity summit in the cabinet room on 19 August. If they want their record to be considered alongside the Hawke-Keating and Howard-Costello governments, the political conditions could hardly be better. Labor must prepare itself for the predictable backlash from vested interests unwilling to countenance changes to cushy arrangements and handy loopholes. Only a serious government prepared to expend political capital will be able to make the system fairer and fit for a 21st century country facing major demographic and economic challenges. If Labor really has the ambition Anthony Albanese insists it does, meaningful tax reform might become the make-or-break test of the government's second term.
Yahoo
3 hours ago
- Business
- Yahoo
Cuts to Fed Staff Pay, CFPB Funds Blocked from Trump Tax Bill
(Bloomberg) -- The Senate rules-keeper has decided that Republicans can't use President Donald Trump's multi-trillion dollar tax bill to strip all funding from the Consumer Financial Protection Bureau and to cut salaries for many Federal Reserve employees. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown The parliamentarian ruled that the GOP-backed policy provisions are outside the scope of the fast-track budget process Republicans are using to push Trump's legislative agenda through without any Democratic backing, Senate Democrats said. Republicans didn't respond to a request for comment. The budget process, which is immune to a filibuster, can be used for legislation primarily aimed at revenue and spending, not for making other changes to public policy. Senate Republicans are planning to begin voting on their version of the $3 trillion tax and spending cut bill next week. The GOP bill would have eliminated CFPB's funding and it would have saved $1.4 billion by cutting non-monetary policy employee pay at the Fed to match levels at the Treasury Department. The rules-keeper also rejected provisions eliminating the Public Company Accounting Oversight Board and the Environmental Protection Agency air-pollution emissions standards for vehicles. The ruling on the CFPB is the latest blow to the Trump administration's attempt to gut the agency, which has been the subject of court fights. Democrats plan to challenge dozens of other provisions as violating Senate rules. These include sections curtailing regulations on short-barrel shotguns and silencers as well as applying financial pressure to states to stop them from regulating artificial intelligence. 'We will continue examining every provision in this Great Betrayal of a bill and will scrutinize it to the furthest extent,' the Senate Budget Committee's top Democrat, Jeff Merkley of Oregon, said in a statement. Senate Majority Leader John Thune told reporters this month that he would oppose efforts to overrule the Senate parliamentarian. When the GOP is in the minority, Thune has argued, the 60-vote threshold for such bills is a vital tool. More decisions from the Senate rules-keeper are expected in the coming days. Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18 hours ago
- Business
- Yahoo
Treasurer's huge call on tax changes
Treasurer Jim Chalmers has announced his ambition for economic and tax reform, and while he remains tight lipped about what's on the table, he has ruled out two key changes. Speaking to the National Press Club on Wednesday, the Treasurer announced the government will hold a productivity roundtable from August 19 to 21 for the purpose of seeking ideas for reform from business, unions, civil society and experts. The gathering will be capped at 25 people and held in Parliament House's Cabinet room. 'Obviously there are some things that governments, sensible, middle of the road, centrist governments like ours don't consider,' Mr Chalmers told The Conversation's Michelle Grattan. 'We don't consider inheritance taxes, we don't consider changing the arrangements for the family home, those sorts of things.' Mr Chalmers said he believes limiting the narrative to 'ruling things in or ruling things out' has a 'corrosive impact' on policy debate, but conceded to ruling out the historically controversial taxes. Inheritance tax is a tax you pay on assets inherited when you are the beneficiary of a will. While inheritance taxes used to be common in most states, by 1981 all Australian states had abolished them. The GST was another key tax eyed for the roundtable. Mr Chalmers has historically opposed lifting the GST but is facing increasing pressure from the states to do just that. The GST has remained at 10 per cent for 23 years. 'You know that historically I've had a view about the GST,' Mr Chalmers told the Press Club. 'I think it's hard to adequately compensate people. I think often an increase in the GST is spent 3 or 4 times over by the time people are finished with all of the things that they want to do with it.' Mr Chalmers said he hadn't changed his view on GST and he won't walk away from it but stressed he's open to hearing ideas on the issue at the roundtable. 'I've, for a decade or more, had a view about the GST,' he told The Conversation. 'I repeated that view at the Press Club because I thought that was the honest thing to do, but what I'm going to genuinely try and do, whether it's in this policy area or in other policy areas, is to not limit what people might bring to the table.' Two years ago, Mr Chalmers warned that raising the GST would likely not fix federal budget issues since even though the tax was collected by the federal government before it was distributed back to the states. 'From my point of view, there are distributional issues with the GST in particular. Every cent goes to the state and territory governments, so it wouldn't be an opportunity necessarily, at least not directly, to repair the Commonwealth budget,' he said. One thing that will remain in play though is the government's pledged superannuation changes, that would increase tax on investment returns, including interest, dividends or capital gains, on balances above $3 million. 'What we're looking for here is not an opportunity at the roundtable to cancel policies that we've got a mandate for; we're looking for the next round of ideas,' he said. 'I suspect people will come either to the roundtable itself or to the big discussion that surrounds it with very strong views, and not unanimous views about superannuation. 'But our priority is to pass the changes that we announced, really some time ago, that we've taken to an election now, and that's how we intend to proceed.' Mr Chalmers said the idea of extending the capital gains tax on superannuation balances to other areas had not been considered 'even for a second'. Sign in to access your portfolio
News.com.au
18 hours ago
- Business
- News.com.au
Treasurer Jim Chalmers rules out two key tax reforms
Treasurer Jim Chalmers has announced his ambition for economic and tax reform, and while he remains tight lipped about what's on the table, he has ruled out two key changes. Speaking to the National Press Club on Wednesday, the Treasurer announced the government will hold a productivity roundtable from August 19 to 21 for the purpose of seeking ideas for reform from business, unions, civil society and experts. The gathering will be capped at 25 people and held in Parliament House's Cabinet room. 'Obviously there are some things that governments, sensible, middle of the road, centrist governments like ours don't consider,' Mr Chalmers told The Conversation's Michelle Grattan. 'We don't consider inheritance taxes, we don't consider changing the arrangements for the family home, those sorts of things.' Mr Chalmers said he believes limiting the narrative to 'ruling things in or ruling things out' has a 'corrosive impact' on policy debate, but conceded to ruling out the historically controversial taxes. Inheritance tax is a tax you pay on assets inherited when you are the beneficiary of a will. While inheritance taxes used to be common in most states, by 1981 all Australian states had abolished them. The GST was another key tax eyed for the roundtable. Mr Chalmers has historically opposed lifting the GST but is facing increasing pressure from the states to do just that. The GST has remained at 10 per cent for 23 years. 'You know that historically I've had a view about the GST,' Mr Chalmers told the Press Club. 'I think it's hard to adequately compensate people. I think often an increase in the GST is spent 3 or 4 times over by the time people are finished with all of the things that they want to do with it.' Mr Chalmers said he hadn't changed his view on GST and he won't walk away from it but stressed he's open to hearing ideas on the issue at the roundtable. 'I've, for a decade or more, had a view about the GST,' he told The Conversation. 'I repeated that view at the Press Club because I thought that was the honest thing to do, but what I'm going to genuinely try and do, whether it's in this policy area or in other policy areas, is to not limit what people might bring to the table.' Two years ago, Mr Chalmers warned that raising the GST would likely not fix federal budget issues since even though the tax was collected by the federal government before it was distributed back to the states. 'From my point of view, there are distributional issues with the GST in particular. Every cent goes to the state and territory governments, so it wouldn't be an opportunity necessarily, at least not directly, to repair the Commonwealth budget,' he said. One thing that will remain in play though is the government's pledged superannuation changes, that would increase tax on investment returns, including interest, dividends or capital gains, on balances above $3 million. 'What we're looking for here is not an opportunity at the roundtable to cancel policies that we've got a mandate for; we're looking for the next round of ideas,' he said. 'I suspect people will come either to the roundtable itself or to the big discussion that surrounds it with very strong views, and not unanimous views about superannuation. 'But our priority is to pass the changes that we announced, really some time ago, that we've taken to an election now, and that's how we intend to proceed.' Mr Chalmers said the idea of extending the capital gains tax on superannuation balances to other areas had not been considered 'even for a second'.
Washington Post
a day ago
- Business
- Washington Post
Some US restaurants and servers oppose Republicans' 'no tax on tips' budget proposal
Some segments of the U.S. restaurant industry don't support President Donald Trump's proposal to eliminate federal taxes on tips , saying it would help too few people and obscure bigger issues in the way tipped workers are paid. The Independent Restaurant Coalition, which represents nearly 100,000 restaurant and bars, has appealed to Congress to reconsider the proposal, which is part of the president's spending bill . Even some workers who rely on tips say they oppose making them tax-deductible.
