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Politics

How much can Jim Chalmers get out of the economic reform roundtable?

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We’re now less than a month away from the start of the Albanese government’s “economic reform” (aka “productivity”) roundtable, but it has become quite hard to get a fix on exactly what this gathering will amount to.

Michelle Grattan, University of Canberra

The guest list for the August 19-21 summit is obviously tight, given the government decided it wanted the meeting to fit into the cabinet room (so avoiding a more extensive “talkfest”).

But excluding the states and territories from a meeting that discusses deregulation and taxation means major players in these policy areas are not in the room (the NSW treasurer, Daniel Mookhey, chair of the board of treasurers, is the only state government representative invited). Treasurer Jim Chalmers says he will meet state treasurers beforehand, but that doesn’t quite cover their omission.

The government has flagged that industrial relations isn’t on the table, although the unions will be at that table. Yet IR is a major issue in productivity, so that excludes a central area from discussion. The unions are being given a level of protection other players potentially do not have.

Tax reform is a central topic at the roundtable, the themes of which are productivity, budget sustainability and economic resilience. But the scope of what is up for serious consideration is limited.

The government is not willing to consider changing the GST, even if it is not formally ruling out it being canvassed.

When it was put to him that he opposed altering the GST, Prime Minister Anthony Albanese told the ABC this week what he would not do was “go to an election and secure a majority because our government concentrated on cost-of-living measures in our first term […] and immediately we get elected and we say, we’re going to put up the price of everything that you buy.

“That is not something that’s tenable. That’s something which would have represented a breach of trust upon which we were elected on May 3rd.”

Rejecting an overhaul of the GST kyboshes, for better or worse, a major tax switch from our over-reliance on personal income tax to putting more of the tax burden on indirect tax. This is a change many tax experts advocate.

Despite the hype around the pre-roundtable discussion of broad tax reform, what appears likely to find favour with the government are tax changes affecting wealth (but excluding the family home) and the resources sector.

It remains unclear to what extent Chalmers will seek to define the outcome beforehand. That is: will he, after reviewing the submissions, go into the roundtable with a firm idea of what he wants to get out of it, and then see how much he can get over the “consensus” line?

Helpfully for everyone at the roundtable, the Productivity Commission is about to release a series of reports on various aspects of productivity, which will provide data and ideas.

These cover economic resilience, improving workforce skills and adaptability, harnessing digital technology, improving care delivery, and investing in the net zero transformation.

Meanwhile business, which felt it was made something of a patsy in the 2022 jobs and skills summit, with the government using that meeting to gain traction for what it already wanted to do, is being cautious this time.

Even before the formal announcement of the roundtable, it set up a group following the government’s nomination of productivity as a central priority for this term. The umbrella body’s first meeting was attended by more than 20 groups representing businesses of all sizes, universities and the investment community. This body is ongoing. It includes the Business Council of Australia, the Australian Industry Group, the Australian Chamber of Commerce and Industry, the Minerals Council of Australia and the Council of Small Business Organisations.

The umbrella body will put forward a suite of recommendations for the roundtable including on investment, innovation, reducing red tape, planning and approval processes, tax, education and employment.

We now have the full list of roundtable participants. It’s interesting for who’s there and who’s not. Ken Henry, of the seminal Henry taxation report – of which Chalmers has vivid memories from his days as a staffer of former treasurer Wayne Swan – will be present. Henry last week gave a strong presentation at the National Press Club about the pressing need for reform of the environment protection regime.

Also scoring an invitation is teal crossbencher Allegra Spender, who made tax reform one of her core issues last term. Spender is holding her own “tax reform roundtable” on Friday, with a who’s who of experts.

But left off the Treasurer’s invitation list list was the Minerals Council of Australia. This despite the fact that tax changes in the resources area seem a ripe area for discussion.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Politics

Macron’s Prime Minister resigns after just one month

Macron’s latest prime minister resigns after just a month amid growing fiscal challenges and government instability in France

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Macron’s latest prime minister resigns after just a month amid growing fiscal challenges and government instability in France

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In Short:
– Sébastien Lecornu resigned as Prime Minister after less than a month, the shortest tenure in Fifth Republic history.
– His departure reflects Macron’s ongoing challenges in securing a stable government amid economic difficulties and political division.
Sébastien Lecornu has resigned as France’s Prime Minister after less than a month, marking the briefest tenure in the country’s Fifth Republic.His departure highlights President Emmanuel Macron’s ongoing difficulties in establishing a stable government amid worsening fiscal conditions.

Lecornu, the fourth prime minister to resign under Macron, faced the challenge of addressing a significant budget deficit while managing a divided National Assembly.

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France’s rising borrowing costs reflect its economic troubles. The CAC 40 index dropped by 2%, and the yield on 10-year bonds climbed to 3.6%. Critics, including Jordan Bardella of the National Rally, are calling for the dissolution of the National Assembly, arguing that such action is necessary for stability.

Upcoming elections could further weaken Macron’s legislative power. His earlier decision to dissolve parliament led to fragmentation, with left-wing and far-right parties gaining strength at the expense of Macron’s centrist coalition.

Government Instability

Lecornu was appointed after François Bayrou’s government collapsed. Bayrou faced backlash for proposing cuts to public spending, intensifying fiscal issues. Lecornu aimed to reform the approach of previous administrations but faced opposition from both ends of the political spectrum.

Rather than seeking cooperation, he appointed familiar figures from previous governments, drawing criticism from conservatives and leftists alike. Macron has been hesitant to engage with the leftist coalition that won the most votes in recent elections, complicating efforts to establish a governing majority.


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Newspoll shows divided opinions on rising house prices

Newspoll shows divided opinions on Australian house prices as government support raises expectations for market increase

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Newspoll shows divided opinions on Australian house prices as government support raises expectations for market increase

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In Short:
– Newspoll reveals a divide among Australians on house prices, with 34% wanting increases and 30% preferring stability.
– The Albanese government plans to build 1.2 million homes by 2029 to address housing supply issues.
Newspoll indicates a split among Australians regarding house prices over the next three years. More voters support an increase in home values than those who prefer stability or a decrease.
This comes as expectations rise due to government support aimed at aiding first-home buyers.The survey, conducted for The Australian, shows that 34% of respondents want prices to rise, while 30% want them to stay the same and another 30% wish for a decrease. A notable 6% had no preference.

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Divisions among the population are evident, especially between those with mortgages and renters. The Albanese government aims to address housing by pledging to build 1.2 million homes by 2029, but opinions on property prices are divided.

Most respondents aged 18-34 are in favour of dropping house prices, contrasting with older demographics more supportive of value increases. Rental households predominantly desire lower prices, in stark contrast to homeowners. Support for rising prices is stronger among Coalition voters and those who support independents.

Government Response

Prime Minister Albanese noted the government’s expansion of the Home Guarantee Scheme aims to ease access for first-home buyers. He highlighted the scheme’s minimal impact on price increases, despite a slight projected rise.

Albanese addressed housing supply challenges mentioned by Reserve Bank governor Michele Bullock, stating that building takes time. He underscored ongoing efforts to boost housing stock through initiatives, including the Build to Rent scheme and renovation of unoccupied homes.


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Takaichi aims for Japan’s first female prime minister

Sanae Takaichi breaks barriers to lead Japan’s ruling party, poised to become the first female prime minister

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Sanae Takaichi breaks barriers to lead Japan’s ruling party, poised to become the first female prime minister

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In Short:
– Sanae Takaichi aims to become Japan’s first female prime minister, leading the ruling party amidst conservative policies.
– Her nationalistic views and opposition to same-sex marriage could alienate voters and challenge her leadership.
Sanae Takaichi emerged victorious in the male-dominated race to lead Japan’s ruling party, positioning herself to potentially become the country’s first female prime minister.
Takaichi’s conservative stance and fiscal policies have raised concerns among investors regarding her plans for an expansionist fiscal agenda.
Despite her background as a heavy metal fan, her nationalistic views may provoke tensions with China.Banner

With previous leadership attempts, Takaichi intends to gain parliamentary approval to replace Shigeru Ishiba. Although she belongs to the largest ruling party, the coalition currently lacks a clear majority following recent election losses.

Hosting a meeting with former President Donald Trump is anticipated as one of her early initiatives.

Takaichi is known for her admiration of Margaret Thatcher, discussing their meeting shortly before Thatcher’s passing in 2013. As a drummer, Takaichi’s personality may resonate with voters, though her nationalistic policies, including potential alterations to Japan’s constitution, could alienate some.

Potential Challenges

While Takaichi advocates for increased gender diversity in her cabinet, her conservative policies may alienate female voters.

She stands against same-sex marriage and the option for separate surnames for married couples, stances not widely supported by the public. Economically, Takaichi promotes ‘Abenomics’, pushing for increased spending amid rising living costs and opposing the Bank of Japan’s interest rate adjustments.


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