Jim Chalmers has lessons to learn
Defining consensus though can be a risky business and the importance of compromise was not on the Treasurer’s list of lessons.
When asked at the National Press Club on Wednesday what lessons he had learnt when implementing contentious tax reform such as a carbon tax, Chalmers said he was “reluctant to pull out a specific lesson from that period”.
“I have been associated with a lot of the policy deliberations … And I think like anyone, you learn from all of them, not just that one,” he said.
“Reform succeeds when you can bring people with you. It requires courage, but it requires consensus as well.”
On Wednesday, he made abundantly clear that he was not walking back any part of his plan for unrealised capital gains tax on superannuation, firmly ruling out any need to compromise.
“We’re not changing the policies we took to the election. We’ve got a mandate for that change (unrealised gains tax),” Chalmers said.
But there might be a risk for Chalmers and indeed, Anthony Albanese, to think they don’t need to compromise and that there is a strong consensus for an unrealised gains tax, just because they won an election.
A petition against the tax that started well after the May 3 election by fund manager Geoff Wilson has now gathered as many votes in its first two weeks as did his petition to stop Labor’s 2019 franking credits policy in its first five months. That’s despite the fact that the franking credits policy directly hit 1 million people,whereas an unrealised gains tax would initially hit about 80,000.
Sitting in front of the Treasurer at the National Press Club on Wednesday when he emphasised the need for consensus on tax reform was former Treasury secretary Ken Henry, who served in the role when Swan was treasurer during the Rudd-Gillard government years.
Three weeks after the May election Henry made known for the first time his views on unrealised gains tax.
“It’s understandable the government would want a more equitable tax treatment of superannuation but to do that you do not need to tax unrealised capital gains,” Henry said.
The former Treasury secretary pointed Chalmers to better options for more equitable taxation of superannuation contained in his own tax review 15 years earlier. However, many of the recommendations in the Henry tax review were ignored by Swan.
Chalmers is yet to confirm whether the Coalition will be given a seat at his August productivity roundtable to discuss tax reform.
The Coalition is no doubt preparing its lines on unrealised gains tax and building its own consensus against it.
In his book, Glory Daze, Chalmers described Swan’s reform agenda as being “headlined by carbon pricing and resource taxation, the fruits of which are yet to be properly understood”.
But even for the budget bottom line, the fruits of an unrealised gains tax might not be as plump as the Treasurer hoped for with the Australian Taxation Office concerned about how superannuants might now be trying to restructure to avoid paying the unrealised gains tax.
Defining “consensus” and compromise over this second term might be Chalmers’ next lessons to learn.
The need for consensus on tax reform is one lesson Jim Chalmers says he has learnt from his days of advising Wayne Swan during Labor’s introduction of a carbon tax.