Labor MPs reveal May budget to-do list

Labor MPs call for a clamp down on property tax concessions, HECS debt reform, extending energy bill relief and other cost-of-living measures in the May budget.

Jim Chalmers wants a second surplus in next month’s budget but Labor MPs are keenly watching for cost-of-living relief. Picture: NCA NewsWire / Martin Ollman

Labor MP Mike Freelander has called on Jim Chalmers to consider reforming tax concessions for property owners and developers as the Treasurer finalises his cost-of-living package for the May budget, amid widespread support from government backbenchers to overhaul HECS.

The backbenchers also said extending energy bill relief and help with medical and transport costs – including cutting the fuel excise – should be included in the budget, as they face pressure from constituents to deliver more cost-of-living support.

Dr Freelander, who represents the southwestern Sydney seat of Macarthur, said he was concerned about housing costs and supply as he urged the government to look at changing property tax concessions.

“We need more public housing and to invest very heavily in that. And we need to look at the taxation issues,” he said, while ­refusing to name the tax concessions he believed should be overhauled. “We (Labor MPs) are all calling for more cost-of-living ­relief in the budget.”

Another Labor MP, who didn’t want to speak publicly, said it was worth considering a crackdown on the capital gains tax discount for second and third properties but the government would have to seek an election mandate for such a change.

With HECS debt set to increase by 4.75 per cent from June, Labor backbenchers warned the indexation rate was too high and the historically low-interest loans were no longer fit for purpose.

Anthony Albanese and Dr Chalmers are preparing to unveil changes to HECS after the Australian Universities Accord recommended the indexation rate be set to the lower of the Consumer Price Index and the Wage Price Index, so that growth in loans does not outpace wages.

HECS is indexed annually ­according to the CPI, which rose 1 per cent in the March quarter and 3.6 per cent annually.

“Historically HECS has been low interest loans and they’ve been more affordable for students, obviously that’s changed and we don’t want students to be disadvantaged,” Victorian Labor MP Josh Burns said. “We want students to be able to get an education and then move on and ­become financially secure.”

Dr Freelander said it was clear students were being lumbered with increasing debt, which was “very unfair”.

Tasmanian Labor MP Brian Mitchell agreed the indexation of HECS was concerning, telling The Australian: “It’s also important to remember it’s not an upfront cost in higher education, but I certainly don’t want to dismiss the importance of offering cost-of-living (help) however we can find it. Relief to people and families hit with cost-of-living issues would be welcomed in whatever form, as long as of course it doesn’t add to inflation.”

Another Labor MP nominated the continuation of electricity bill relief for welfare recipients as a critical budget measure, saying people on government payments needed “a little bit of bridging help”.

“Now’s the time to hold our nerve and maintain discipline because that’s the best way to get inflation down and interest rates reduced. Splashing cash beyond the tax cuts and really targeted stuff to be popular doesn’t help in the long run,” the MP said.

Dr Chalmers said the government was considering the ­Universities Accord’s recommendations on reforming HELP (HECS) loans, which included reducing repayment times and student contributions to reflect what a person will earn in their lifetime.

“If there’s something that we can do on that front in addition to the cost-of-living help that we are already providing, then we are prepared to consider that,” the Treasurer said.

While many Labor MPs on Wednesday called for cost-of-living relief, they were not expecting the government to unveil much new spending in the May budget.

“(Dr) Chalmers is keeping tight-lipped (about the budget). He’s clearly trying to keep a lid on expectations,” one MP said.

Opposition education spokeswoman Sarah Henderson said students had been “totally ­betrayed” by a government that had allowed their debt levels to rise yet again, after HECS was indexed at 7.1 per cent last year. “In the face of escalating student debt, a cost-of-living crisis and an acute housing shortage, a 5 per cent fall in university enrolments this year shows Labor’s economic policies are making it harder to go to university,” she said.