The Treasurer said there will be no change in taxing unrealized capital gains.
Federal Treasurer Jim Chalmers issued a pessimistic warning about Australia’s economic future before being sworn for the second term of the worker.
“Productivity has been a challenge that has been a hallmark of our economy for decades and it will take more than a few years to turn,” Chalmers said, adding that he has been involved with key business leaders over the past week to discuss solutions.
“It’s not one of the areas where you can just flick the switch, and the economy is suddenly productive,” he told Sky News.
“This issue has been there for decades. The worst decade of productivity growth has been 10 years since 2020 to 2020, the worst decade in the last half century.”
I’m urging businesses to do something fair
Australia’s Business Council has repeatedly urged the federal government to prioritize the issue
“Business investment is important to address productivity challenges. Of the seven workers employed in the private sector, six, and 80% of Australia’s economic output, come from businesses of all sizes,” Business Council CEO Bran Black said in a May 12 release.
“The BCA looks forward to working with Accounting, the Minister of Finance and the broader economics team to provide productivity solutions to the economy as a whole, including inquiries from the Productivity Committee’s ‘Five Pillars’. ”
John Humphries, an economist with the Australian Taxpayers Alliance, warned of delayed productivity at the 2016 level.
“And the mo-death economy is why so many people struggle,” he told The Epoch Times.
Humphries criticized the government’s approach and argued that long-term economic reforms have been sacrificed for short-term political benefits.
“Australia desperately needs significant tax cuts, reduced regulations on small businesses and cheap energy prices if they want to kickstart the economy,” he said.
He described workers’ tax plans (such as moderate income tax cuts and proposed standardized deductions of $1,000) as “symbolic gestures.”
Unrealized profit tax shifts fund the pledge
The Chalmers also confirmed that the government will not change its plan to tax unrealized capital gains on superbalances above $3 million.
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“We’ve made it clear that it’s a very modest change. It only affects half of those with a balance of over $3 million,” he said. “It’s still a concessionary tax treatment, a concessionary concession.”
He said revenues will help fund priorities such as strengthening Medicare, reducing income taxes and easing costs of living.
Relieving tensions in world trade – for now
Meanwhile, Chalmers also welcomed the US-China trade war suspension, but warned against excessive optimism.
“It’s a truly welcome development and I think the whole world is hoping that this will work out for the solution of this effective war between the two biggest economies of the world,” he said.
“But we have to be realistic about it too. There is still a lot of unpredictability, a lot of volatility, a lot of uncertainty in the global economy. This has not been resolved and is welcome.
