Jim Chalmers

Answer from Jim Chalmers

The Treasurer stated that net overseas migration had nearly halved from its peak and was falling ahead of schedule. He attributed previous surges in migration to the prior government's tenure, which coincided with falling housing market indicators. He affirmed that current policies were designed to manage migration responsibly in the national economic interest, contrasting this with the opposition's approach.

Answer from Jim Chalmers

The Treasurer defended the productivity assumption of 1.2 per cent, stating it was based on Treasury advice and consistent with international forecasts from the UK, US, and New Zealand. He argued that the previous government had kept assumptions artificially high at 1.5 per cent despite weak growth. He highlighted the budget's broad productivity agenda, including faster approvals and foreign investment reform, as measures to address long-term structural challenges.

Answer from Jim Chalmers

The Treasurer highlighted the upcoming Intergenerational Report, which projected an improvement in the cash balance by 1.2 percentage points of GDP and a decline in gross debt from 33.1 per cent to 22.2 per cent of GDP by 2062-63. He noted that all three major ratings agencies still gave Australia a stable AAA credit rating. He attributed these improvements to responsible economic management, debt reduction, and structural reforms.

Answer from Jim Chalmers

The Treasurer stated that he took his colleagues and economic challenges seriously, noting that the specific matters raised had not come up in a recent briefing on the Intergenerational report. He highlighted the government's focus on inflation, productivity, and global volatility, citing the impact of the war in Iran on borrowing costs. He pointed to the government's productivity package, tax reform, and responsible budget management as evidence of serious engagement with economic risks.

Answer from Jim Chalmers

The Treasurer highlighted rising global interest rates and inflation due to the war in Iran, noting that Brent oil prices had risen 55 per cent. He stated that Australia had lower gross debt to GDP than other major advanced economies and one of the strongest budgets in the G20. He cited Australia's AAA sovereign credit rating and positive assessments from S&P and Moody's. He contrasted this with the opposition's unfunded commitments, arguing that responsible economic management shielded Australians from global volatility.

Answer from Jim Chalmers

The Treasurer stated that the government's responsible budget management had resulted in lower gross debt to GDP than any major advanced economy. He noted that the bottom line was more than $250 billion better than when the government took office, with gross debt around $200 billion lower. He contrasted this with the opposition's unfunded commitments, which he argued would push up inflation and deficits.

Answer from Jim Chalmers

The Treasurer stated that Australia's debt position was much stronger than its peers, with gross debt to GDP less than half that of the US, UK, and Canada. He noted that almost two-thirds of the current debt was inherited from the previous government. He emphasized that Australia was not approaching unsustainable levels, unlike some other countries, and that responsible management was ongoing.

Answer from Jim Chalmers

The Treasurer highlighted measures including super on paid parental leave, payday super, and boosting the low-income super tax offset. He noted the rise in the superannuation guarantee rate from 9% to 12%. He stated that the upcoming Intergenerational Report would show superannuation helping meet intergenerational obligations, with median retirement balances projected to rise to $450,000. He contrasted this with opposition policies that would reduce the guarantee to nine per cent, potentially leaving a 25-year-old worker $770,000 worse off at retirement.

Answer from Jim Chalmers

The Treasurer stated that negative equity remains very limited, affecting less than one per cent of borrowers according to the Reserve Bank of Australia. He cited Commonwealth Bank earnings data showing only half a per cent of their book was in negative equity, a figure lower than the same period last year. He contrasted this with April 2019, when the RBA reported that more than two per cent of borrowers had negative equity during the previous government's term. The Treasurer attributed current market conditions to multiple factors, including interest rate increases and global uncertainty, rather than government policy.

Answer from Jim Chalmers

The Treasurer argued that the current debt trajectory was $200 billion lower than inherited levels, with over 60 per cent of existing debt accumulated during the previous nine years of Coalition government. He attributed the rise in global bond yields to the escalation of conflict in Iran and broader global economic uncertainty, noting that markets in all major advanced economies were pricing in rate increases. He stated that the government's fiscal management had resulted in surpluses and revenue upward revisions, contrasting this with the opposition's unfunded commitments.

Answer from Jim Chalmers

The Treasurer stated that superannuation provided security for workers and reduced budget pressure, citing upcoming Intergenerational Report findings. He noted that international ratings agencies had reaffirmed Australia's AAA credit rating due to sound fiscal performance. He contrasted this with the Queensland government's fiscal deterioration and highlighted global economic uncertainty driven by Middle East conflict and rising inflation. He emphasized that the government's approach involved backing superannuation, delivering tax cuts, and restraining spending.

Answer from Jim Chalmers

The Treasurer dismissed the opposition's credibility on tax matters, citing their own proposals to increase income taxes. He explained that the budget changes regarding trusts were optional and designed to align tax treatment with ordinary workers while reducing restructuring costs. He noted that Treasury analysis indicated families with discretionary trusts paid lower average tax rates than similar non-trust families, with the majority of trust wealth held by the top 10 per cent of households. He stated that over 95 per cent of individual taxpayers would not be affected and confirmed that Treasury was consulting on the legislation in the usual way.

Answer from Jim Chalmers

The Treasurer argued that the superannuation system relied on universality, preservation, and compounding returns, which were at risk under opposition policies. He stated that early withdrawals would cost individuals significantly at retirement and increase budget deficits. He cited Intergenerational Report projections showing pension spending would fall from 2.3 per cent to 1.8 per cent of the economy as superannuation improved retirement incomes. He criticised the Coalition and One Nation for proposing policies that would undermine superannuation and increase income taxes.

Answer from Jim Chalmers

The Treasurer acknowledged the importance of consistent definitions and noted that the Housing Australia Future Fund required rents to be at a 25 per cent discount to market rates. He stated that the Minister for Housing had asked Treasury to examine different definitions and frameworks across Australia to identify options for greater consistency. He confirmed that this work was ongoing with state housing ministers and that he would keep the member informed of progress.

Answer from Jim Chalmers

The Treasurer outlined policies including five income tax cuts, raising the super guarantee to 12 per cent, and introducing payday super. He criticized the opposition and One Nation for proposing policies that would raid superannuation balances, arguing this would cost workers $3 for every $1 withdrawn and increase taxes. He stated that the government's approach protected retirement savings and supported wages, contrasting it with opposition policies that he claimed would lower wages and increase taxes.

Answer from Jim Chalmers

The Treasurer stated that income splitting would cost the budget substantially, citing a Parliamentary Budget Office estimate of over $12 billion over forward estimates and nearly $70 billion over the medium term. He noted that such policies primarily benefit higher-income couples and could reduce incentives for women's workforce participation. He outlined alternative government measures to assist families, including tax cuts, cheaper medicines, minimum wage increases, and boosted paid parental leave. He concluded that the government had chosen a different path for cost-of-living relief.

Answer from Jim Chalmers

The Treasurer listed several government initiatives, including raising the super guarantee to 12 per cent, boosting the low-income super tax offset, paying super on paid parental leave, and implementing payday super. He criticised the Coalition and One Nation for opposing compulsory superannuation, claiming they would cut super and reduce economic security for retirees. He also referenced past comments by the Shadow Treasurer acknowledging the need to slow housing price growth to address intergenerational inequity.

Answer from Jim Chalmers

The Treasurer stated that the government's priority was addressing illicit tobacco as an enforcement and compliance issue, backed by over $350 million in additional resourcing. He noted that the vast bulk of excise increases had occurred under the previous government and that coalition figures had previously supported higher excise to reduce consumption. He affirmed that the government would rely on expert advice rather than political pressure from One Nation when considering next steps on enforcement and compliance.

Answer from Jim Chalmers

The Treasurer stated that Australia's debt ratios were low compared to peer nations, citing reaffirmations of the AAA credit rating by Moody's and S&P Global. He argued that most of the current gross debt was accumulated between 2013 and 2022 by the previous government. He noted that gross debt was $200 billion lower than the inherited trajectory, resulting in $7 billion less interest paid this year compared to the previous budget. The Treasurer claimed the opposition's policies would have led to higher debt and deficits.

Answer from Jim Chalmers

The Treasurer argued that One Nation, the Liberals, and the Nationals did not support first home buyers or wage increases. He stated that budget assumptions cover multi-year periods, not just initial months. He cautioned against using recent rent figures selectively and noted that house price fluctuations had occurred multiple times in the previous decade. The Treasurer attributed market softening to various factors present before the budget was released.

Answer from Jim Chalmers

The Treasurer cited wage growth above three per cent, low unemployment, a record-low gender pay gap, and a decrease in insolvency rates. He noted that Moody's had reaffirmed Australia's AAA credit rating due to low debt ratios and conservative budgeting. He claimed that gross debt was $200 billion lower than the inherited trajectory, resulting in $70 billion less in interest payments. The Treasurer argued that the opposition's policies would have increased debt and deficits.

Answer from Jim Chalmers

The Treasurer highlighted real wage growth in the June quarter and nominal growth above three per cent for four years. He noted the strengthening of the superannuation system, including raising the rate to 12 per cent. He cited Moody's reaffirmation of Australia's AAA credit rating as evidence of responsible budget management, with gross debt reduced by $200 billion. He contrasted this with the opposition's $110 billion in forward estimates commitments, arguing they posed a risk to wages and super.

Answer from Jim Chalmers

The Treasurer identified Katy Gallagher as the Minister for Better Regulation and highlighted the government's broader economic reform agenda. He stated that the budget aimed to cut compliance costs by more than $10 billion a year through various measures, including regulatory reform bills and streamlined approvals. He acknowledged that ongoing work was needed to improve productivity but emphasized the progress made since the Economic Reform Roundtable.

Answer from Jim Chalmers

The Treasurer stated that the government had boosted the super guarantee to 12 per cent, introduced super on paid parental leave, and increased the Low Income Super Tax Offset for 1.3 million workers. He argued that the opposition did not support universal superannuation, citing historical comments from Liberal Party figures. He framed the upcoming election as a referendum on whether workers would retain universal superannuation or see it undermined.

Answer from Jim Chalmers

The Treasurer stated that the government had increased the superannuation guarantee to 12 per cent, implemented payday super, and paid superannuation on paid parental leave. He noted that superannuation represented about a quarter of household wealth and was the fourth-largest pool of retirement savings globally. He identified the opposition parties as the primary risk, citing their history of opposing universal superannuation and recent comments characterizing it as a policy failure.

Answer from Jim Chalmers

The Treasurer stated that analysis from the Treasury, Productivity Commission, OECD, and Reserve Bank consistently showed that migrants contributed significantly to the economy and innovation. He noted that the government was reducing net overseas migration by 45 per cent below its peak while recognizing the important role of migrants. He rejected the approach of those seeking to divide the community over migration issues.

Answer from Jim Chalmers

The Treasurer reported that average weekly full-time earnings had risen by more than $300 since the government was elected, and the gender pay gap had fallen to 11.3 per cent. He stated real wages growth was expected to return as inflation subsided. He criticised the opposition for wanting to end compulsory superannuation, citing comments from Senator Bragg and the shadow Treasurer.

Answer from Jim Chalmers

The Treasurer reported that inflation had fallen for three months, leading the RBA to hold rates steady. He highlighted tax cuts, wage boosts, expanded parental leave, and Medicare strengthening. He claimed the budget was managed responsibly with two surpluses and $200 billion less debt than the inherited trajectory, citing S&P Global's reaffirmation of the AAA rating. He contrasted this with opposition commitments totalling $110 billion in deficits and $530 billion in debt over ten years, arguing these would worsen inflation and interest rates.

Answer from Jim Chalmers

The Treasurer stated that the government takes caucus views seriously and that the member for Sturt was an effective local representative. He highlighted that 93,000 taxpayers in Sturt were receiving tax cuts and 80,000 would benefit from the Working Australians Tax Offset. He argued that the government was addressing housing market distortions that locked out young people, contrasting this with the opposition's approach which he claimed would maintain the status quo.

Answer from Jim Chalmers

The Treasurer dismissed the question as a political stunt, noting contradictory opposition claims about consultation levels. He explained that draft legislation ensures properties owned on budget night or acquired through inheritance or relationship breakdown retain access to negative gearing. He stated that tax reforms are being legislated in stages, with changes taking effect from 1 July next year, allowing time for detailed implementation and consultation.

Answer from Jim Chalmers

The Treasurer reported that the Reserve Bank kept interest rates unchanged at 4.35 per cent, providing relief to mortgage holders. He noted that inflation forecasts had been downgraded while growth forecasts were upgraded, with inflation moderating for three consecutive months. He attributed persistent price pressures partly to the war in the Middle East. He highlighted that Australia retained its AAA credit rating and had lower gross debt than other major advanced economies, attributing this to responsible economic management.

Answer from Jim Chalmers

The Treasurer stated that multiple factors were affecting the housing market, including interest rate movements and global uncertainty. He noted that housing market softening had occurred before the budget. He explained that budget measures aimed to help first-home buyers over the medium term. He highlighted that net overseas migration had decreased by 45 per cent from its peak and that the government was investing $50 billion in housing supply to address shortages and put downward pressure on rents.

Answer from Jim Chalmers

The Treasurer listed measures including tax cuts, pay rises, fuel assistance, paid parental leave, super on payday, and an instant asset write-off for small businesses. He highlighted that the government has delivered smaller deficits and the lowest average unemployment in half a century. He criticized the opposition for voting against measures that would help Australians, arguing their agenda exacerbates economic pressures.

Answer from Jim Chalmers

The Treasurer confirmed that tax cuts were being delivered, providing an average worker with approximately $2,800 extra. He listed measures including minimum wage increases, extended paid parental leave, small business instant asset write-offs, payday superannuation, and fuel excise relief. He noted that the budget deficit was smaller than anticipated and debt was $200 billion less than the inherited trajectory. He argued that the opposition would have resulted in larger deficits, no tax cuts, and no cost-of-living assistance.

Answer from Jim Chalmers

The Treasurer stated that from 1 July, the government would deliver income tax cuts, wage boosts, extended paid parental leave, superannuation paid with wages, extended petrol price relief, and a permanent small business instant asset write-off. He cited specific weekly wage increases for aged care workers: $59 for personal care workers, $86 for registered nurses, and $67 for enrolled nurses. The Treasurer noted that national debt was $200 billion lower than when inherited and that the deficit would be smaller, contrasting this with the opposition's stance against these relief measures.

Answer from Jim Chalmers

The Treasurer stated that the budget changes aimed to make the housing market fairer for first home buyers and young Australians who had been locked out for a quarter of a century. He argued that the opposition sought to preserve the status quo, which he characterized as a policy mistake that distorted the market. The Treasurer emphasized that the government was taking action to address the challenge of housing affordability, contrasting this with the opposition's inaction.

Answer from Jim Chalmers

The Treasurer outlined measures taking effect on 1 July, including tax cuts for all workers, a six per cent pay rise for minimum wage earners, and a 4.34 per cent rise for award-wage workers. He noted that superannuation would be paid with wages, fuel excise relief would continue, and paid parental leave would increase to 26 weeks. He also mentioned the ban on excessive grocery pricing and indexing of various payments. He contrasted these measures with the opposition's stance, accusing them of opposing tax cuts and reforms.

Answer from Jim Chalmers

The Treasurer reported that inflation and unemployment had decreased, with over 1.25 million jobs created since the government took office. He stated that the government was passing tax cuts for workers, supporting first-home buyers, and making the tax system fairer, while the opposition voted against these measures. He outlined upcoming benefits including tax cuts for 14 million taxpayers, minimum wage increases, expanded paid parental leave to 26 weeks, superannuation paid with wages, and a ban on excessive grocery pricing.

Answer from Jim Chalmers

The Treasurer stated that the arrangements were consistent with existing tax system treatments and that the government was addressing issues through subsequent legislation. He explained that large tax reform packages often require multiple pieces of legislation, citing historical examples. He accused the opposition of trying to distract from their intent to vote against tax cuts and support for first-home buyers when the bills returned to the House.

Answer from Jim Chalmers

The Treasurer stated that inflation had fallen for the second consecutive month. He noted that the Shadow Treasurer had acknowledged on social media that the war in the Middle East was worsening inflationary pressures. He argued that the Shadow Treasurer inadvertently credited the budget settings for the substantial drop in inflation. He warned that the opposition's $110 billion in unfunded commitments would lead to higher inflation and interest rates. He criticized the Opposition Leader for trying to outdo One Nation on policy.

Answer from Jim Chalmers

The Treasurer acknowledged the funding request from local governments. He stated that the government had already provided $2.9 billion in financial assistance grants for roads and services. He mentioned the $2 billion Local Infrastructure Fund for housing projects. He cited a further $780 million allocated to the Thriving Suburbs and Growing Regions programs, which brought total investment to over $1.7 billion. He noted the Stronger Communities Program and Active Transport Fund provided another $500 million. He also referenced the Roads to Recovery Program funding of $1 billion annually.

Answer from Jim Chalmers

The Treasurer stated that headline inflation had fallen in both monthly and annual terms for the second consecutive month. He noted that more than 14 million Australians would receive tax cuts from 1 July. He mentioned a six per cent increase in the national minimum wage and a 434 per cent increase in modern award wages. He highlighted the expansion of paid parental leave to 26 weeks and the payment of superannuation on pay day. He also cited the ban on excessive grocery pricing and tax reforms including the working Australians tax offset.

Answer from Jim Chalmers

The Treasurer described the reforms as necessary progress for a fairer tax system, benefiting first home buyers and workers. He noted that small businesses now have access to concessions and that super fund borrowing rules are being strengthened consistent with the Murray review. He criticized the opposition for opposing tax cuts and repealing legislation, which would reduce the small-business concessional threshold from $10 million to $2 million. He added that the government is lowering fuel costs and increasing wages while making housing more accessible.

Answer from Jim Chalmers

The Treasurer explained that the amendment reduces risk to retirement savings and secures passage of fairer tax reforms. He cited the Murray inquiry, which found direct borrowing by super funds inconsistent with retirement savings objectives. He clarified that the change extends the ban on borrowing but grandfathers existing arrangements with a 45-day transition period. Regarding trust, he pointed to falling petrol prices across major cities since March, contradicting the Shadow Treasurer's claims that prices were not falling.

Answer from Jim Chalmers

The Treasurer stated that net overseas migration has decreased by 45 per cent from its peak and is at its lowest level in years. He highlighted that the government has achieved the lowest average unemployment in 50 years. He criticized the opposition for aligning with One Nation's rhetoric on monoculturalism and argued that the government's policies support workers, young people, and first home buyers, reflecting core Australian values.

Answer from Jim Chalmers

The Treasurer announced an extension of fuel excise relief for one month, saving Australians approximately $11 per tank. He highlighted five tax cuts for 13.3 million workers and a six per cent increase in the national minimum wage, effective the following week. He noted that tax cuts for over 14 million Australians would begin rolling out. The Treasurer contrasted these measures with the opposition's voting record, claiming they opposed higher wages and lower taxes.

Answer from Jim Chalmers

The Treasurer clarified that a discount for capital gains would remain, reflecting real gains rather than an arbitrary figure. He stated that 98 per cent of all active businesses would access concessions and carve-outs, with 100 per cent of active small businesses accessing the higher turnover threshold. He criticized the shadow treasurer for running a scare campaign against changes he had previously called for. The Treasurer asserted that the opposition voted against measures to help first home buyers and workers.

Answer from Jim Chalmers

The Treasurer stated that most such businesses would be included in the new higher threshold for small-business turnover. He noted that 99 per cent of agricultural businesses would qualify for the revised 50 per cent active asset reduction. He mentioned that a consultation paper on startups had been released to address questions about defining innovation and holding periods. The Treasurer emphasized that 98 per cent of all active businesses would access concessions and carve-outs.

Answer from Jim Chalmers

The Treasurer stated that the government had taken substantial action since the report, including negotiating a moratorium on branch closures for major banks until 27 July. He noted that 700 regional branches closed between 2017 and 2022, but the rate of closures had plummeted under the current government. He mentioned increased investment in Bank@Post, the cash acceptance mandate, and draft legislation on cash distribution. The Treasurer acknowledged that more work was needed and that discussions with banks and regulators were ongoing.

Answer from Jim Chalmers

The Treasurer stated that the legislation would cut taxes for more than 13 million workers and simplify tax time. He described the reforms as the most significant in over 25 years, helping tens of thousands of Australians into homes who would otherwise be locked out. He highlighted the Working Australians Tax Offset as a permanent increase to the effective tax-free threshold. He noted that the average worker would gain up to $2,816 annually, funded by reforms to make the tax system fairer. He criticized the Opposition for voting against these measures.