Treasury boss says Labor knew of stage three redesign
Treasury Secretary Steven Kennedy says Labor was made aware of the stage three redesign after December 11, and could not rule out discussing negative gearing changes with Jim Chalmers.
Treasury secretary Steven Kennedy has revealed Labor knew the stage three tax cuts were being redesigned after a December 11 meeting, despite the government publicly reassuring Australians beyond this date that it was standing by the Morrison-era package.
Speaking before a parliamentary cost-of-living committee hearing on Friday, Dr Kennedy made clear the government was kept in the loop about Treasury’s plans to overhaul the stage three tax cuts over December and January.
He also refused to say whether he had discussed any negative gearing reforms with Jim Chalmers or prepared options on potential negative gearing changes, fuelling suspicion the government was working on further tax overhauls.
Treasury officials told the committee earlier this week that Dr Chalmers had asked Dr Kennedy for new cost-of-living relief measures on December 11, but clarified the redesign of the stage three tax cuts was Treasury’s idea and not imposed on it by government.
While Dr Kennedy strongly denied being specifically instructed to redesign the already legislated stage three tax cuts in the December 11 meeting, he acknowledged there were “ongoing conversations between my department and the Treasurer’s office about how our advice was evolving and, you know, how our considerations were developing”.
“I’d be very surprised if he (the Treasurer) didn’t, wasn’t aware of those conversations,” Dr Kennedy said.
Speaking on December 21, Anthony Albanese said the government had “made no decisions along those lines (to change stage three tax cuts). We’re not reconsidering that position.”
Opposition finance spokesman Jane Hume, the chair of the Senate committee, told The Weekend Australian that Dr Kennedy had made it clear that “when the PM and the Treasurer said they weren’t reconsidering their position they actually were doing just that”.
“There is no other polite word to use and no other explanation – the PM and the Treasurer knowingly and intentionally lied,” she said.
On Thursday in parliament, Dr Chalmers was unable to directly rule out whether he had given any specific direction to Dr Kennedy or any other Treasury official about stage three tax cuts.
Pressed on whether the government had ever tried to deter Treasury from redesigning the stage three tax cuts given it was a Labor election commitment, Dr Kennedy said on Friday: “I don’t have those discussions with ministers. My job is to give them the best advice to solve the problems at hand. And that’s what I did.”
Dr Kennedy said that Treasury had been “thinking about what we would prepare for the budget” and “considerations more broadly about ongoing cost-of-living pressures”. He explained that “the need for advice that we were already thinking about is sharpened up in that (December) meeting”.
Asked by Nationals senator Matt Canavan if Treasury had prepared any negative gearing reform options for government, Dr Kennedy did not directly answer and instead argued that Treasury officials were “working on the whole tax system”.
Senator Canavan said he was “not sure why you won’t answer the question … I think the Australian people deserve to know”.
But Dr Kennedy said he could not provide “frank and fearless advice” if he told everyone what he was talking to the Treasurer about.
Speaking on the Nine Network on Friday, former Labor leader Bill Shorten strongly rejected suggestions Labor would introduce negative gearing reforms.
“No, seriously, on negative gearing, we’re not doing it,” he said.
“I did take a policy to restrict some of the aspects of it to the 2019 election. I have learnt my lesson. “I did take tax reform to the election, and all we got at the end of it was Scott Morrison.”
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