CANBERRA, ACT, June 1 -- The Treasurer of Australia issued the following transcript:
Note
Subjects: opportunities for first home buyers, capital gains tax discount, tax cuts, One Nation polling
Renee Coffey:
I'm Renee Coffey. I'm the federal Member for Griffith and welcome to Stones Corner in the beautiful south side of Brisbane. It's great to welcome the Treasurer back here again. The last time the Treasurer and I were here, it was actually a construction site. Some of you were here also with our construction with hats on. It's so good to visit back here again to see the residents moved into this beautiful accommodation. We have here 82 apartments that are providing social and affordable housing supported by the Australian federal government.
The housing here is for vulnerable people in our community and also for essential workers. In Griffith, in this community, I hear about the challenges of housing, in particular for young people and for those people in vulnerable groups. I hear about that regularly when I'm talking in the community, door‑knocking. We're absolutely in a housing crisis and it is time for generational reform and that's why I'm absolutely proud to be part of this government which is tackling this issue head‑on, and to be part of such enormous reform in this space. So, I'm very pleased to welcome the Treasurer.
Jim Chalmers:
Thanks very much, Renee. And big thank you to Jamie and Jo and the Brisbane housing team as well for welcoming us back here. This is a really special place and I especially wanted to acknowledge Jan downstairs who has shown us through her apartment. She moved in in September. Jan is exactly the type of person that we're trying to help by building more homes in communities like Renee's. I acknowledge her and her outstanding representation here on the south side of Brisbane.
These 82 apartments are all about what can happen with Commonwealth government support for Brisbane housing, but working closely with the state investors as well, and also with the Australian Retirement Trust to build these sorts of homes in local communities. Our government is all about housing and it's all about cutting income taxes. The Budget was all about housing and cutting income taxes. It's a budget for first home buyers. It's a budget for young people and young people at heart, and it's also a budget for workers. And you can see that in the tax cuts which come before the parliament this week.
Now, when it comes to housing and when it comes to young people in particular, as the Treasury Secretary said last week, something like 90percent of young people would benefit from the changes that we are proposing. And if you think about what we're trying to do here with supply, with the tax reforms that we put in the Budget, last year, there was $123billion of borrowed money by investors into established homes, but something like $96billion for new builds. And so if only a fifth of that investment in established homes found its way into new builds, encouraged by our policy changes, then that extra $25billion or so would be an extra 25,000 houses a year or something like 33,000 apartments a year. So, you can see that our housing policy and our tax reforms are carefully calibrated.
First of all, to provide homes, more homes in communities like this one for great people like Janice, but also to make sure that where we are making changes, we're still incentivising supply. And even if just a fifth of that investment in established houses found its way into new builds, we would make a noticeable difference when it comes to more homes in communities like this. That's the first point.
Second point is that this is a really big week in the economy. In the parliament this week, we will be debating our tax reforms, which are all about cutting taxes for workers and making it easier for people to buy their first home. That's what our Budget is all about. That's what the legislation before the parliament is all about this week. And it's presented together because one part of the tax reform package pays for another tax cut, another 2 tax cuts for millions of Australian workers. Now we call on the Coalition not to vote against housing and not to vote against tax cuts again like they did in the first term. In the first term, they voted against housing, they voted against tax cuts. They're showing every sign of having not learned a thing or changed a bit since the first term when they made those mistakes, saying that they will vote against housing and vote against tax cuts once again. A really important part of this legislation is the Working Australians Tax Offset plus the standard deduction. That means all up, this government is cutting income taxes 5 times in 3 different ways. We call on the Coalition not to vote against tax cuts like they did in the first term.
Now, altogether, our tax cuts mean an average worker could benefit up to $2,800 a year when all of the 5 tax cuts are in place. And today is a really important day because today is onemonth to go until the tax cuts, which come in on the 1st of July. Right across the board, this government is about cutting taxes and that's because we want Australians to earn more and keep more of what they earn, and we're taking decisive action to make that a reality. So, today is onemonth to go until those tax cuts come into being. In the parliament this week, we will debate legislation to see subsequent tax cuts as well. Five tax cuts, all up $2,800 for an average worker when they're all in place.
Now, the other important thing that's happening this week is tomorrow the Fair Work Commission will come out with its decision on minimum and award reliant wages. We have called on the Fair Work Commission to announce a sustainable real wage increase for millions of Australian workers. Decent pay and conditions is a really important way that we help people with the cost of living. We've been very supportive throughout when it comes to increases in the minimum wage, we support an increase in the minimum wage, which is a sustainable real wage increase. That's what the submission that myself and Amanda Rishworth have put into the Fair Work Commission says, and we will hear their decision tomorrow.
Wednesday, the National Accounts come out. In Wednesday's national accounts, what we will see is a genuine investment boom in our economy. When it comes to business investment measured by CapEx, what we will see in the National Accounts is a very strong outcome for business investment. When we saw the data for the March quarter, what we saw was that business investment has come in 6 times stronger than what economists were expecting and construction investment has come in 4 times stronger than what people were expecting. So, in the March quarter, we have seen a genuine investment boom under this Labor government, we've seen very strong through the year figures as well when it comes to investment, and we'll see that reflected in the National Accounts on Wednesday. We've got no shortages of challenges in the global economy and in the domestic economy. But we enter this difficult period from a position of genuine strength and extremely strong business investment is a really important part of that story.
So, the government strategy is to build homes, make it easier for people to buy their first home and to cut income taxes. Our political opponents have got 3 strategies too. Talk down our economy, talk up division in our society and defend the current arrangements in the housing market and the tax system, which are locking too many people out of their first home. I think it says everything about Tim Wilson that he is prepared to weaponise a scare campaign full of lies against the very kind of changes that he has called for in the parliament and in his book. And he was caught out yesterday lying once again about the amount of young people with shares. He said 85percent of young people were investing in shares. He either doesn't know the real figure or more likely, he's lying about that as part of this desperate scare campaign against these sensible changes and sensible reforms in the Budget. We call on them to vote for these sensible changes when they come before the parliament.
Last point I would make is this. We've heard that the Coalition is preparing some kind of stunt when it comes to coming up with an excuse not to vote for Labor's tax cuts. We remind everyone that the Opposition has already committed to $110billion of uncosted and unfunded commitments over the forward estimates and more than half a trillion dollars of unfunded, uncosted commitments over the medium term as well. Theirs is a recipe for much bigger deficits, much more debt and higher inflation as well. And so when you see this stunt from them, when the legislation comes before the parliament, remember that they've already got well over $100billion in a budget black hole over the forward estimates and more than half a trillion dollars over the medium term. And with that, happy to take some questions.
Journalist:
Treasurer, a few days after the Budget, I asked whether a decrease in auction clearance rates to about 50percent over that weekend was a sign that your announcements to capital gains tax changes and negative gearing had spooked the market. A few weeks on, they're still down around that 50percent when it comes to clearance rates, do you now concede the market's been spooked?
Chalmers:
Well, when it comes to auction clearance rates, there are a number of factors playing out there, including the last few decisions by the independent Reserve Bank, the broader economic conditions and also the policy changes in the Budget. Some of those, as you cited in your question, Harry, the other day and again today, some of those clearance rates were coming down already. And the Budget is not the only factor when people are thinking about those participating in those auctions. But if we are making it easier for first home buyers to get a fair crack at auctions, then that's a good thing. We've only seen the preliminary numbers for Saturday. Some of those preliminary numbers have come up a bit in other markets, they've gone down a bit. We'll see the final numbers in due course. But the Budget is not the only factor when it comes to those auction clearance rates. There are other factors like interest rates, and that's why we had already seen some movement in auction clearance rates before the Budget.
Journalist:
You say that's a good thing. What about the report of the Guardian today that the property prices have begun to fall. Experts say that it could last for a year and that the value of the property market, capital cities, could be wiped by about 10percent. Is that a good thing or a bad thing?
Chalmers:
I haven't seen that story in the Guardian, obviously. I'm aware that there are a number of different forecasts about the outlook for house prices. The Treasury modelling that we provided in some detail on Budget night says that the Treasury expects house prices to continue to grow, but about 2percent more slowly than before. That's about $19,000 on the median house price. And so that's Treasury expectations. But I acknowledge that different organisations and different entities have different forecasts. Once again, the Budget is not the only factor when it comes to what's happening in our housing market. We have seen multiple interest rate hikes in recent months. We have got a softening of economic conditions more broadly as a consequence of the war in the Middle East. And so we're seeing all of that play out. Mackenzie.
Journalist:
Which assets will get the CGT discount and who will decide that?
Chalmers:
Beg your pardon?
Journalist:
Which assets will get the CGT discount and who will decide that?
Chalmers:
Well, all assets get a discount. It's just calculated differently. It's either calculated by an inflation calculation or it's calculated, if it's a new build, by the 50percent discount. We've made that clear throughout. The old arrangements will apply until the middle of 2027 and then an inflation‑related discount after that.
Journalist:
But who will decide which, the movement of these discounts, which will apply to which asset class? Will that be up to you? Will you have that power?
Chalmers:
It will be determined in the legislation in the usual way. But we've already made it clear that we're not choosing between some assets getting a discount and others not getting a discount. We're talking about a different calculation of the discount, which more accurately reflects the real gains that people make.
Journalist:
But the legislation says it comes down to Ministerial discretion. So, which Minister will decide that? Will that be you?
Chalmers:
It's set out in the legislation in the usual way. It's not unusual in tax legislation for there to be subsequent regulations and discretion. But your question was about who would get the discount and who wouldn't. I want to make it really clear it's still a discount. It's just calculated in a different way across the board.
Journalist:
Just back on that 10percent fall report, given how many young people you've talked about helping into the market with a 5percent deposit, how concerned are you about the heightened risk of negative equity, and does that risk further alienating millennial voters?
Chalmers:
Well, housing is a long‑term investment and people will invest over the long term. And as I said in answering Harry's question, the Treasury expects house prices to continue to grow, but a bit more slowly. You can't read into month‑to‑month movements or quarter‑to‑quarter movements when it comes to these big long-term investments that people make. When it comes to young people, this is a budget for young people and for people who are young at heart, like Janice, that we're just hanging out with elsewhere in the building. And the Budget's for young people because overwhelmingly the big beneficiaries of the tax cuts are young people. The big beneficiaries of making it easier to buy your first home is all about recognising that there is an intergenerational injustice that we are addressing in the Budget. We know that that's contentious. We know that there are people who would prefer the current arrangements stay in place. We know that there are people who'd rather cling to a broken status quo which locks too many young people out of housing in this country. And so we've taken some difficult decisions to change that because we don't want to leave this challenge to somebody else to fix.
Journalist:
Just on the fuel excise, are you open to extending it past June, given the current hostilities?
Chalmers:
I'd only say what I've said on other occasions about this. You know, we are expecting, anticipating that the fuel excise tax cut will end at the end of this month, but we keep it more or less under weekly review. If you look at petrol prices and diesel prices, they are down quite substantially since we put that petrol and diesel tax cut in place. That's obviously a very welcome development. One of the reasons why inflation went down in the most recent numbers, even though it went up in other comparable economies, is because we stepped in decisively to take some of the sting out of these higher petrol and diesel prices from the war in the Middle East. And so we've deliberately made a decision to make that tax relief temporary at the same time as we provide permanent and ongoing relief in the income tax system. That strikes us as the best balance, but we will keep it under review in the coming weeks.
Journalist:
Minister, you acknowledge Treasury expects property price will rise, are rising prices a good thing?
Chalmers:
Well, we're not targeting a particular dollar figure or percentage figure when it comes to the growth in house prices. What we want to see and what our policies are all about seeing is more affordable options for people to buy their first home. Now, one of the reasons why we're investing $47billion in housing, taking this challenge seriously after a decade of neglect under our predecessors, is because we want to make sure that more people can get a toehold in the housing market. And, you know, obviously there's a big scare campaign playing out right now. There's a lot of lies being told. Obviously there's a whole heap of politics around this, but we're focused on the outcome. And the outcome for us is making it easier for people, particularly young people, to get a toehold in the housing market. They've been locked out for too long. That's not about targeting a particular price outcome, it's about making sure that there are options for people and that people have a fair crack when they show up to auctions.
Journalist:
One Nation has now overtaken Labor in the polls, indicating that your Budget has fallen flat with millennials, which, as you mentioned, this Budget was aimed at helping. What do you make of that? Are you concerned you're leading millennial votes to One Nation?
Chalmers:
Well, this is about the right outcome, not about the politics. And it's not especially surprising when we've got a budget full of hard decisions and not handouts, when we've got a global oil shock putting pressure on people and we've got these scare campaigns full of lies that we would see these kinds of political outcomes. For me personally, I would rather get the policy right and lose a bit of skin politically than to take the easy option and leave everything exactly as it is and lock out subsequent generations from the housing market. I think it would be surprising in the current political context if any government got a bounce out of a budget. We're doing this to boost first home ownership, not to boost our primary vote. And we understand that these changes are contentious. We understand that there's a big scare campaign, a lot of lies being told about it. And so in that context, it's not especially surprising to see the sorts of polls that we've seen overnight.
Journalist:
Why do you think people are turning to One Nation currently in favour of instead of Labor now? [Indistinct].
Chalmers:
I think people have legitimate concerns about where they fit in the economy. And for me, the big risk when you look around the world, is we want to make sure that Australia doesn't become like other countries where people have this sense that they are disconnected from the economy and disregarded from our society. And so I think people are responding to legitimate pressures and legitimate concerns and anxieties that they have.
Now. The difference between us and the three‑ring circus on the right of politics, is that we are doing something about those legitimate concerns that people have, including whether or not our kids and grandkids will have the same sorts of opportunities that we have had. And so the big con in the three‑ring circus on the right, is they want to benefit from people's legitimate concerns without doing anything about them. And this is a government which is the, you know, we are the last ones standing in the sensible centre of Australian politics, but we're not standing still. We're recognising and responding to the very real pressures that people are under. Thanks very much.
Disclaimer: Curated by HT Syndication.
