CANBERRA, ACT, May 13 -- The Treasurer of Australia issued the following transcript:
Note
Subjects: tax reforms announced in the federal Budget, housing supply, rental prices
Sarah Abo:
Morning, Treasurer.
Jim Chalmers:
Good morning.
Karl Stefanovic:
All right, the highest‑taxing Treasurer in this country's history. How does that sit with you this morning?
Chalmers:
No, the highest‑taxing government was the Howard and Costello government. We've got taxes as a share of the economy lower than what those predecessors had. There are tax cuts in the Budget, tax cuts for workers and tax cuts for business.
Abo:
When did you change your mind on some of your policies? Because I don't think anyone believes that you did that in just the past couple of weeks or few weeks, given how organised you are, Treasurer.
Chalmers:
We took the decision in recent weeks when we were finalising the Budget to take these difficult and admittedly contentious steps to change the tax system to try and make it easier and fairer for more Australians, particularly young Australians, to get a toehold in the housing market. We understand that these changes are contentious. We have come to a different view than the view that we held 12months ago and that's because it's become increasingly clear to us that the primary focus on supply is still important. The problem begins there, but it doesn't end there. Too many Australians are locked out of the housing market. So, we're making these changes to try and get an extra 75,000 owner‑occupiers into the housing market for the first time.
Stefanovic:
Just on that, so, 75,000 homes over 10years, and this is at best, there are, from my calculation, around 4million Australians aged between 18 and 28. I'm saying they're young. One home every 53 people. That's not exactly a fix.
Chalmers:
Well, that sounds to me, Karl, like you're arguing that we should have gone further. This is 75,000 first‑home buyers who wouldn't otherwise be getting into the market. And that's because we recognise that the intersection of the housing market and the tax system is locking too many people out of the housing market, particularly young people. This is a concern which is raised with us a lot. It's probably raised with both of you as well. And so we're taking these difficult decisions and this decisive action to try and address it.
Stefanovic:
Is it 75,000 or 35,000?
Chalmers:
75,000 Australians getting a toehold in the market for the first time. The net effect of our housing policies, which is a big effort on supply, some extra investment in youth homelessness and these changes we're making to the tax system. If you look at our housing policy, across the board, it means about 30,000 extra homes.
Stefanovic:
But didn't the Treasury's own figures say that that number will come down by 35,000?
Chalmers:
That's only part of our housing policy. That's the modelling on the specific tax changes but what I'm saying, Karl, is our housing policy is not just that in the Budget. If you look at our housing policy, the new announcements we made last night, the effect of all of that together means about an extra 30,000 homes being built in our economy.
Abo:
You also concede though, by your own measurements, that rental prices will go up as a result of the changes you're making.
Chalmers:
The Treasury modelling says about $2 a week, but again, that's only very specifically about these 2 tax changes. Overall, our housing policy in the Budget will build more homes and that will put downward pressure on rents.
Stefanovic:
Okay, just, I need to clarify this figure. So, you're saying 75,000, but by the Treasury's own figures it's going to be 35,000 fewer. How do we actually work out how many young people are going to be-
Chalmers:
It measures different things, Karl.
Stefanovic:
Yeah, can you explain that?
Chalmers:
No, it measures different- it's a very different number. It measures different things. The 35,000 is the amount of homes built. So, the net effect of our Budget is to build 30,000 more homes. Across all of the housing policies in the Budget, the different number is the 75,000. That's about the composition of the market. That's about an extra 75,000 first‑home buyers getting a toehold into the market for the first time. So, it measures 2 very different things.
Stefanovic:
It's a bit like explaining the GST on cake.
Chalmers:
No, not quite. One is about how many first‑home buyers will get into the system. The other one is about how many extra homes we'll build.
Abo:
Treasurer, don't you risk having a 2‑tier investment system here. I mean, you're grandfathering some of those clauses. Fair enough, but others would say that it's not ambitious enough and that many won't benefit from those who now will maintain their current status of life.
Chalmers:
Well, 3 important things about that, Sarah. First of all, we are recognising and respecting the decisions that people have taken in the past. Overwhelmingly, our tax package is forward‑looking rather than backward‑looking and that's an important principle that we're applying. Secondly, when it comes to people who might want to make investments in the future, they can still do that, they just have to negatively gear a new home. So, they're adding to housing supply. We think that's an important feature too.
And the third thing is, of course, there will always be people who say that we should go further, and equally there will be people who would rather we leave the arrangements exactly as they are but we think we've come up with a really responsible package here. We made a series of difficult decisions to address this challenge in our economy where too many young people are locked out of the housing market.
Abo:
Now, I guess it's just a matter of whether they'll actually still be able to get into it, because, as you know, house prices are well out of reach for a lot of young people at the moment. I mean, even for those on a good wage. And you're, you know, sort of gambling, aren't you, on young voters backing you and not worrying about government integrity and lies.
Chalmers:
First of all, it would be worse for home buyers and particularly for younger people if we left these arrangements unattended. Would be easier politically, frankly, to leave everything as it is. But we've taken this difficult decision because it's become increasingly clear that the longer we leave these arrangements, the more Australians will be locked out of the housing market. Now, obviously, there will be politics played around this. I think a lot of people who would prefer that we leave the arrangements exactly as they are. The defenders of the status quo, which is not working for too many people, they will try and focus on the politics of it rather than the substance of it. We're focused on the substance of it.
Stefanovic:
It was called the Communist Manifesto this morning.
Chalmers:
Yeah, I heard about that, Karl. I, like most Australians, have got more important things to do than worry about what's on the front of the Daily Tele.
Stefanovic:
Treasurer, thanks for your time. Appreciate it.
Abo:
Thank you.
Disclaimer: Curated by HT Syndication.
