Program: Treasurer Jim Chalmers reviews productivity roundtable

Rachel Mealey: Changes to the tax system, reforming the National Construction Code and a tax on road users are some of the main ideas to come out of the Government's three-day economic summit. Business leaders, union chiefs and bureaucrats were locked in the Cabinet Room this week debating how to lift Australia's flagging productivity. Treasurer Jim Chalmers was at the helm and he joins me now. Treasurer, good morning.

Jim Chalmers: Thanks very much, Rachel. Good morning.

Rachel Mealey: People are listening to AM right now on the way to work. Many drop their kids off to school on the way. You're speaking to those cars this morning, carrying two generations. What can you tell them about how you're going to make the tax system fairer?

Jim Chalmers: Well, first of all, I'd say we've made a lot of progress in our economy the last few years and the best way to sustain that progress, to lift living standards, to make people better off over time is to make our economy more productive, more resilient and make our budget more sustainable. And those were the three major issues that we grappled with over the course of the last three days. Now, when it comes to tax, the Government's tax policies haven't changed. Our major focus is on cutting taxes two more times for every taxpaying worker in those cars dropping the kids off at school this morning. And really, from the economic reform roundtable's point of view, they wanted to make sure that any future tax reforms, which are a matter for the Cabinet, are consistent with three principles. The first one, that it deliver a fair go for working people and young people. Secondly, that it attract more business investment. That's a challenge in our economy. And thirdly, that changes make the system simpler, more sustainable so that we can fund the kind of services that all of those families rely on.

Rachel Mealey: Can you point to any measures that will address that intergenerational unfairness?

Jim Chalmers: Well, certainly the tax cuts are part of that. When we changed the tax cuts and then delivered two more rounds, it was about making sure that every taxpaying worker got a tax cut, including young people, making sure that people on low and middle incomes got a fair go in middle Australia. That's a big priority. But also a lot of our effort on housing, building more homes, is about meeting our generational responsibilities to people who are finding it harder and harder to get a toehold in the market or to find somewhere decent to rent. Certainly a lot of our policies on skills and training, free TAFE, a lot of what we are delivering there is about intergenerational fairness. But really, one of the defining outcomes of this economic reform roundtable was building consensus and momentum around ensuring that intergenerational fairness is one of the defining principles of our country, but also of our government. And that's certainly something that we will pick up and run with.

Rachel Mealey: Is the treatment of family trusts in your sights or perhaps a reduction of capital gains discounts? Can you change the system without any of those measures on the agenda that genuinely address the unfairness in the tax system?

Jim Chalmers: We haven't changed our policies on those examples that you raise. And we've tried to make it clear that a lot of what we're doing already, whether it's making superannuation tax concessions still concessional but more sustainable, whether it's the tax cuts that I've referred to a couple of times already. These are the changes that we are already delivering in the tax system are an important part of this. We haven't changed our specific policies on those areas that you identify. But what we have agreed with the economic reform roundtable is that any further steps that we take down the tax reform path, which would be a matter for Cabinet, would be consistent with those three principles that I mentioned.

Rachel Mealey: You've said that there was agreement in the room on the need for a road user charge. In what time frame could an owner of an EV expect to start paying a road user charge? And how much do you think they'll pay every year?

Jim Chalmers: Well, it depends on the model that we settle on and the timing of that model. I've got an important meeting with the state and territory treasurers in a couple of weeks time, and they will provide us an options paper to work through. There was a surprising degree of consensus around the need for road user charging when it comes to EVs. But there's not yet a perfect consensus on the best model or on the best timing of that. And so I committed to work with the states and territories on that. Obviously, at the end of the day, a matter for our Cabinet. I work closely with colleagues like Catherine King and Chris Bowen and the Prime Minister and others on that. And so we haven't come to a concluded view on the model or the timing of that model. But the direction of travel is pretty clear. It's something we've been working on for a little while. And the next mover will be the states and territories at the meeting that I convene on the 5th of September.

Rachel Mealey: While you're talking about Cabinet, before the last election, you told us you'd take that road user charge and make some other tweaks to the tax system in this term. Will any other changes be made to the tax system before the next election?

Jim Chalmers: Well, I think, again, that's a matter for the Cabinet. But as you rightly point out, we said before the election that road user charging was something that we wanted to work through. We also took to the election those income tax cuts, which are our highest priority when it comes to tax reform, cutting taxes next year and the year after, as well as having cut taxes last year. So that's our highest priority work to do on road user charging. There are other suggestions put to us from time to time. I want to be respectful to the views raised in the room at the economic reform roundtable. But at the end of the day, as I said before, the timing of any other tax changes will be a matter for me to determine with my Cabinet colleagues.

Rachel Mealey: Will this folder of ideas that you've left the room with have an impact on Australia's productivity?

Jim Chalmers: Oh, absolutely. And, you know, we've spent a bit of time this morning, Rachel, talking about tax, but that was just one part of the progress that was made over the course of the last few days. Making our federation work more efficiently, moving towards a single economic market, dealing with some of the unnecessary duplication across state borders and also when it comes to international standards, simplifying trade, reforming tariffs, winding back unnecessary regulations, speeding up approvals, building more homes more quickly, making artificial intelligence a national priority and getting that right, attracting more investment, modernising government services. These were the directions where there was broad, I think, and quite deep consensus emerging out of the economic reform roundtable. If we do all of those things right, it will shift the needle. It will take time. Productivity is not one of those areas. How much time?

Rachel Mealey: Do you have a time frame and a target?

Jim Chalmers: Well, I think we're just being upfront with people and saying this is a problem in our economy the last couple of decades. It hasn't been productive enough to lift living standards in an enduring way. It'll take time to turn around. But the progress, the momentum and the consensus that was built over the course of the last few days will help. It will take time. We have to move on all of these fronts simultaneously and we intend to.

Rachel Mealey: Jim Chalmers, thanks very much for joining AM.

Jim Chalmers: Appreciate it, Rachel. Thank you.