August 21, 2025 • 22 mins
This week was an exciting one in Canberra, especially if you’re the kind of person who digs the philosophy of tax and transfer. We are talking, of course, about the economic roundtable, hosted by Treasurer Jim Chalmers.
Meanwhile Health Minister Mark Butler began the necessary but painful process of reining in the enormous growth of the NDIS.
Chief political correspondent Paul Sakkal, and senior economics correspondent Shane Wright join Jacqueline Maley to discuss.
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Episode Transcript
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S1 (00:02):
From the newsrooms of the Sydney Morning Herald and The Age.
This is inside politics. I'm Jacqueline Maley. It's Friday, August 22nd. Well,
this week was a very exciting one in Canberra, especially
if you're the kind of person who really digs the
philosophy of tax and transfer. We are talking, of course,
about the Economic Roundtable, which was hosted by Treasurer Jim Chalmers. Meanwhile,
(00:27):
Health Minister Mark Butler began the necessary but painful process
of reining in the enormous growth of the NDIS. Here
to discuss all this, we have our chief political correspondent,
Paul Satchell, and as ever, our special guest star and
delightful senior economics correspondent, Shane Wright. Welcome, gentlemen.
S2 (00:46):
How are you both? And and wannabe Heather Locklear? That's
exactly right, jacki.
S1 (00:50):
That's right, that's right. Always. Okay, we've been calling it Canberra. Coachella.
And I do want to just note for the record
that Chris Richardson, independent economist who was an attendee of
the Economic Roundtable, has picked up this phrase, and he
actually tweeted it this week as he was on the
way to the economic Roundtable on a murrays bus.
S2 (01:10):
Well, that's the sort of impact you have, Jacqueline Maley.
You you're you're permeating the economic and policy ether like.
S1 (01:19):
Yeah, yeah, yeah, we're influencers. We're all influencers. Okay. So
the economic roundtable wrapped up on Thursday evening. Paul, tell
us what came out of it.
S3 (01:27):
There were some conclusions and some were shorter term and
some were longer term. So you'll remember weeks ago when
we started talking about this economic roundtable, it quickly turned
into a moment where there was a lot of commentary
that this might be a really decisive turning point for
the government, where it might start to look at wholesale
tax reform and big new economic reforms that might kind
(01:48):
of change the trajectory of the government. Over time, expectations
were managed. It narrowed down to a conversation that was
about what some would describe as low hanging fruit around deregulation,
speeding up approval processes for housing for green energy projects,
getting the skills sector to work better to make sure
we've got the right people working in our economy, um,
(02:09):
improving our migration system to improve, to ensure we're, uh,
we're using our migrants in the best way possible. All
of those things were ticked off by the government, and
there were some real merit in those ideas.
S4 (02:19):
There was 29 hours of discussions in the end. Uh,
there was, by our count, something like 327 different contributions
made over the course of those three days.
S3 (02:32):
Uh, very important economists we spoke to last night said
that this didn't set the world on fire, these immediate actions,
but they gave the government a new menu from which
to choose from, some of which could have a serious effect,
a real, tangible effect on productivity between now and the
next election, because they can be done quickly. I'd describe
these this list of actions from the Treasury side at
(02:53):
about ten of them as like one percenters, some of
which are more than 1%. That's probably a little bit harsh,
but quick, smaller things that can be done quickly, which,
taken together, can have a tangible effect on productivity. And
I think economists will give credit to the government for that.
There was another element that the treasurer hinted at, which
and Shane will get to this. And Shane's been writing
(03:14):
about this this week, which I'd describe as kind of
the holy grail, maybe of economic reform, these big picture
items around, um, ensuring that the intergenerational compact between younger
and older Australians is fixed, that we, uh, take away
the burden of income tax from younger Australians and working Australians,
that we potentially tax assets and wealth more at a
(03:37):
higher level so that we can, uh, share the spoils
of the Australian economy and wealth more equitably. The treasurer
got to this, this final point on the tax system
right at the end of his about 25 minute preamble.
And what he said was that at the roundtable, there
was consensus that the tax system is not fair that
younger people, he hinted at this, pay too much income tax,
(03:59):
that older people have too good a ride, and that
something needs to be done to look at the tax system.
He didn't commit to any items, but he said Treasury
would start addressing these issues. This is obviously something that
will create huge, contentious debates about potentially taxes on superannuation,
on removing the capital gains discount, potentially looking at negative gearing,
(04:20):
as well as doing something on the tax mix, potentially, uh,
and trying to ease the burden on younger Australians. We
don't know where he wants to go with all of that.
He said this would be a matter for cabinet, but
the debate's been started and there was another another item
that we knew also that was in the works, which
was the at least pausing and potentially redrawing of the
national construction code, which builders and many other experts say
(04:43):
is making it too difficult to build a house. So
effectively streamlining the rules that are prohibiting house building happening
more quickly. One of the.
S2 (04:52):
Can I stop you there for one second, Paul. Like
because this is the like the national construction code and
this goes to the whole oh they've these things we
knew this wasn't an issue at like this issue had
come up during the election where the coalition said, we're
going to freeze it for a decade. And there was
a real big pushback from the industry. But you go
(05:14):
back even two months ago, it had disappeared. And it's
only because of the of the roundtable that it's really come,
come to the fore very quickly. Like most people had
no idea that this 3000 page behemoth existed, except if
you're a poor builder having to work out what size
or what depth of a firewall you had to put
(05:35):
into a house. So this is it's interesting about how
we go, oh, this is a thing we knew. But
go back eight weeks, you and I and Jackie would
not be discussing the ins and outs of the national
construction code.
S1 (05:48):
I mean, I guess it's particularly important for the government
now politically, because they've made promises very concrete, firm promises
about how many houses they're going to build. And they've discovered,
perhaps belatedly, that it's really hard to build houses because
there's too many regulations.
S3 (06:01):
Yeah, I think you're probably right, Shane. I mean, we've
read stories about it for weeks now, and so we've
been accustomed to it being on the menu, but it
has certainly come about into public debate only in the
last few months. I think you're right about that.
S1 (06:12):
Okay. So so we had some agreement on some of
these topics. I mean, it's pretty small beer. We're not
talking about major tax reform. Major economic reform. Shane, what
was your impression of the conference?
S2 (06:23):
I was always a bit cynical, especially around tax, because
tax is the one of the most contested spaces going around.
And you actually saw the way that the business lobby
reacted to the Productivity Commission's idea of a cash flow
tax like it, like they were trying to kill it,
probably within about six hours of it going live. So
(06:45):
and that's just around company tax where there's like every
business bar five the 500 largest. We're going to get
a tax cut, including some really substantial firms with turnover
between 50 million and 1 billion. No matter what you did,
they were going to get at least a 5% tax cut.
S1 (07:04):
But they were saying the overall tax burden was going
to be higher on business.
S2 (07:08):
For 500 firms. Yes. Not for the other couple of million. Ultimately,
because so much of tax we know about the problems. But, uh,
the way and Paul and myself picked this up on
the in the press conference that Chalmers gave was the
fact that, yeah, the him conceding there's intergenerational issues. Um,
(07:29):
and it's, it's whacking younger people. We've heard say Ken
Henry has been talking about the international intergenerational bastardry of
the tax system, but now he's actually like he's like
the Pied Piper. He's finally got a team on his side.
And they're singing from a similar, uh, hymn book now.
S1 (07:46):
Yeah. So you wrote a really compelling piece about this
this week, And you basically, I think, came to the
conclusion that this intergenerational bastardry, we don't usually use vulgarity
on this podcast, but we're quoting Ken Henry. So it's okay. Yeah.
That's right. Yeah. So basically the intergenerational inequity where the
tax burden is much higher on working age and younger
people than it is on older people. And you basically
(08:09):
came to the conclusion that not much is going to
be done about that huge structural issue out of this roundtable.
Is that is that what you think?
S2 (08:17):
Yes. Although the fact that he's conceded that there's a
problem and it depends on how you go about it.
Like this government is still like the noise around the
government's change on superannuation, which is affecting just tens of
thousands of people, you would think is the end of days. Yeah.
Amongst some of the criticism. And you go, oh come
(08:37):
on fellas, let's calm down a little bit. But it's
that's the sort of noise when it's an issue around
the globe where so many people, the wealth, wealth is
the like. We've always talked about income inequity. Yeah. But
now we're getting into like, people have realized. Hold on.
It's where wealth is, where we have so many multi-billionaires
(08:58):
people have sort of what the hell's going on? Yeah.
And the working age population, particularly if you're in your
20s or 30s, you feel like you've absolutely been rogered over.
And they and these people have absolutely every right to
believe that. So that argument about where how wealth is
treated as opposed to income is, I think it's something
(09:18):
that's going to keep gathering, gathering attention.
S1 (09:21):
And Shane, you wrote a piece this week basically saying,
you know, it's easy to be cynical about the Productivity
Roundtable that, you know, not enough has come out of it,
or that we didn't get a lot of kind of
actionables that are going to happen straight away. But you
also pointed out that genuine economic reform takes a very, very,
very long time. And if you don't build consensus over
a very, very, very long time, then it just won't succeed.
(09:42):
And Ken Henry knows that better than anyone because, you know,
he put forward the mining tax and a carbon price,
and both of those died in a big political fight.
So do you think that's what the government is trying
to do? Basically use this as a groundwork for a very,
very long process of political consensus building for some major reforms?
S2 (10:01):
Yeah. Paul Circle might be on the aged pension by
the time it gets all done. Yeah. But, um, and
he's a very young man right now. Let's let's make
that clear for those who can't see him. However, maybe
it's the world that we live in that we get
instant gratification from everything. Policy change does take time. It
really does. Like, as you notice the column I wrote,
(10:24):
the GST took 25 years from being explained to being
put in place. And Paul Keating, someone who really does
know how to communicate and bring people, bring people with him.
On reform he lost. People forget that in 1985, he
wanted a consumption tax and got beaten by his own
government on that introduction. So it does take time. You
(10:47):
mentioned Henry the Standard. One of his proposals was the standardized, uh,
tax refund for people who line up every year, go
down to a tax accountant to get their tax done.
That was in Henry and finally made it into the government's, uh,
election agenda. And we and already you can see some
(11:08):
there's some big name tax agents saying, oh, this is
end of days, right? Um, we're talking about something that
will like, this is where Paul's absolutely correct, where Saul
Eslake talking about one percenters or, or uh, Danny, Danny
would talked about just making a change that might give
you an inch of improvement.
S1 (11:27):
Um.
S2 (11:27):
After a while, you get to a full yard. Maybe
you'll go the, the full nine yards to go into
a movie analogy, that sort of thing. It it just
takes time. And people want to see everyone and I
understand want to say, ah, we've got the whole solution.
Here it is. We'll put in place by the end
of the week, it'll be all done. That's not how
society works at all.
S3 (11:49):
And they say there's a lot of, uh, there'll be
a lot of talk, uh, in coming days about how
this moment failed to match the Big bang moments of
economic reform, particularly from the Hawke-keating era, and then in
part from the Howard era and what Jim Chalmers would
say if he was on this podcast and being honest,
which he may not be if he was on this podcast,
(12:09):
would be to say that there are no, you know,
floating the dollar ideas that the government can easily enact
to do immediate big change.
S1 (12:19):
Yeah. So what happens politically from now, Paul? I mean,
will this just kind of fade into oblivion? Will they
make these changes and we might get some incremental improvements
on productivity. And they can sort of point to those
or will they use it for. I don't know, some
sort of agenda building exercise or to actually do something
major over the next two and a half years, something
major that might upset people but might also really benefit
the economy.
S3 (12:40):
Well, Chalmers was asked this yesterday, was he, as he
was leaving his press conference, the question was asked by
a few different people in different ways, and the question was,
do you feel like you're exiting this week with a
new public mandate to do something more bold as this
term goes on? His answer was mixed. He said that
our mandate comes from the people being the election, where
(13:00):
they had a very thin mandate on economic reform that
allowed them to do not very much. But he did
say that the nature of this government is that we
bring people into a conversation, and that's how we do change.
We tell people what we're doing, we bring them along
for the ride. And I think what he was hinting
at was that this week, for the first time, he's
(13:20):
been more honest about what the problem is that needs
to be solved, being the tax system moving away from
all the low hanging fruit that he's already going to enact,
and by being upfront about the problem that needs to
be solved on tax, I think he's giving himself a platform. Yeah.
Just through using these words to do some more later
in the term. The opposition's been very cynical this week.
(13:40):
They've called it a stitch up. Ted O'Brien had a
probably slightly confected brawl with Chalmers inside the.
S1 (13:46):
I know that was that was exciting. That was a
little juicy piece of gossip out of an otherwise dry
round table.
S3 (13:52):
Little, little. My favourite piece of reporting for the week, jacki,
for sure.
S1 (13:55):
It was. It was so exciting. A little a little
exchange of terse words.
S3 (13:59):
Well, the background to this is interesting. So Ted O'Brien's
The Shadow Treasurer used to be the energy spokesman, was
responsible for the nuclear plan, the disastrous nuclear plant in
the last opposition. He's now the deputy leader. He agreed
to go into the round table as one of the
25 or whatever attendees. He's the only opposition MP at
the Round Table. There was quite a lot of pressure
from some of his colleagues, his senior colleagues in the opposition,
(14:21):
who believe that his attendance at the Round Table legitimized
the whole project, which was a Chalmers project, and gave
weight to the government's agenda. And so there was some
internal pressure on him to show a point of difference
in the room. There was some conjecture in the days
leading up as to whether he would do a walkout,
like a staged walkout to protest it.
S1 (14:42):
I love a walkout. I mean, you really capture people's
attention if you flounce out of a room.
S3 (14:47):
Yeah. It's not really his style to do something like that.
So what he did decide to do was on the
last day, the Thursday, as they were talking about budget
restraint after Jenny Wilkinson, the new finance Treasury, um, gave
her spiel on budget management, Ted O'Brien put his hand
up and said, I'd like to have it have a say.
And he gave a very forceful spiel which cited an
op ed that he'd written this week in one of
(15:08):
the papers, which effectively said that Jim Chalmers had ruined
the budget. He cited a bunch of different statistics, and
Chalmers interjected also forcefully and said, quote, according to a source, Ted,
this isn't Question Time. And he also said that every
number you have just read out there is wrong. This little,
this little. Barney went on for a little while, apparently.
(15:29):
And Daniel Mukhi, the New South Wales treasurer, apparently interjected
and said, guys, we need to move on. No one
wants to hear this. Can we can we go to
the next speaker?
S1 (15:37):
Well, cue the great Peacemaker. Um, what a scene. What
a scene.
S2 (15:41):
Apart from. I really need to get out more. Jackie.
You really are going crazy. It's not Shakespeare, that's all
I'm saying.
S1 (15:54):
Let's move on quickly to the NDIS, because, um, in
terms of budget management and structural budget sort of overhangs, um,
the NDIS has been a real headache for the government
and for the last coalition government as well, just because
of the the rate of growth of the scheme and
the enormous, enormous expense of it. So is it coincidental,
do you think, Shane, that this week, um, Mark Butler,
(16:16):
the health minister, went to the National Press Club and said, look,
we're actually going to overhaul this and we're going to
do something about this, and we're going to cut that
growth rate right down from I think they wanted to
do it 8% a year or keep it to 8%
a year. But now he's saying, no, we're going to
go further and keep the growth to 5 to 6%
a year, and we're going to basically kick off a
lot of young autistic and kids who are sort of
(16:37):
on the ADHD spectrum. Onto another scheme. Tell us a
little bit about that.
S2 (16:42):
Yeah. It's no coincidence. It has been a very interesting
week because there's this. And there's also a change around
deeming rates which hit pensioners. Yeah, I think someone tried
to describe it. It'll only save $1.8 billion. I look,
I would get out of bed for $1.8 billion. So
I don't think it's that inconsequential. However, Mark Butler, his
proposals as our colleague, the brilliant Natassia Chrysanthos, has mentioned,
(17:06):
what he's talking about is a possible saving of close
to $100 billion over the next decade if they can
get this policy up and going, which is effectively you, grandfather,
the kids who are autistic, who are on the scheme now,
grandfather them and stop new ones coming on, uh, within
(17:29):
the next 18 months or next two years and move
them into a much cheaper and much more targeted scheme, which,
and Butler's argument is ultimately the NDIS was set up
for people with permanent and irreparable disabilities.
S1 (17:46):
Severe disabilities, severe disabilities.
S2 (17:48):
And and I you can understand parents who've got, uh,
autistic children and they there is a spectrum as a
as my wife is a teacher and she deals with
kids who are across the spectrum in this space. Yeah.
You can understand if you had this chance to get
some great, like, huge like we're talking huge amounts of
money to help them. You can understand why you do it.
(18:09):
You do.
S1 (18:10):
It transforms people's lives, I think, and particularly for kids
who are maybe from lower socioeconomic backgrounds where they wouldn't
have gotten that, that assistance originally.
S2 (18:18):
Of course, the studies are showing that people, higher socioeconomic
parents who are really doing well to get there, they've
been able to negotiate the scheme really well and access
this scheme, which is actually coming in. And you're right,
it is coming at a huge cost to every taxpayer.
So yeah, what Mark Butler has outlined, you can see
(18:41):
the commitment to it because they understand it has to
be done and do. Kudos to the coalition because the
coalition did not get any help from labor when the
roles were reversed in terms of trying to bring change
to the NDIS. The coalition's already signalled, look, we're open
to this because they understand that this is a this
(19:02):
is a bipartisan problem that they have to address.
S1 (19:05):
Yeah, and I think the NDIS, for the most part,
is usually been treated as a fairly bipartisan issue because
it's so important to, to disabled Australians. Paul, do you
think the government's likely to get any political or any
kind of public backlash over these cuts to the NDIS?
S3 (19:19):
Well, I think the timing is is interesting. This is
a few months after the May election that labor is
openly admitting that even their 8% growth target means that
this scheme is still going to increase at a really
eye watering rate 8% compounding when the when a scheme
costs nearly $50 billion per year means that a kind
of behemoth will double in pretty quick time. Any politician
(19:41):
you talk to in private acknowledges this scheme is absolutely
nothing compared to what it was meant to be, and
that it needs to be reined in. But when you
have an election coming up, people aren't willing to be
honest about these things in public. Because even when you
do try and make reasonable changes to a scheme that
creates losers, losers can be loud and losers will be
(20:03):
latched onto by politically interested parties to make a political point.
But I think Mark Butler's honesty on Wednesday and the
way he framed the argument to say to parents, no,
no individual family is at fault here. It's not your
fault that you have signed up to this scheme. There's
a lack of services for autistic kids in schools and
in other areas in the community, because everyone has allowed
(20:25):
the all states and other parties have allowed the federal
government to pay for this thing because the NDIS is there.
He's saying no one is to blame. We're not targeting you.
But this game doesn't work for the broader public interest,
and something needs to be done. So an unencumbered government
with a big mandate and a strong political position can
be honest and tackle big issues even when they are contentious.
(20:47):
I think that's a that's a that's that's one of
the benefits of having a commanding election win, which we
should be pleased with for the public interest, I think.
S1 (20:55):
Yeah, yeah. Okay. Um, chaps, what are we going to
do without the Productivity roundtable in our lives? Like, is
there a shaney? Do you feel like a hole in
your soul now or never?
S2 (21:06):
The the the race for economic reform never ends. That
that finish line just keeps going off and off into
the distance. And look, given what they've commissioned, this thing
is going to keep going and going. And every couple
of weeks myself or Mr. Sarkar will ask the treasurer,
so how's the roundtable going? Where are you up to?
It isn't going to end that soon.
S3 (21:28):
And he'll say, he'll say, oh, don't remind me of
that thing.
S1 (21:30):
Yeah, that. That old thing. Um, well, this is music
to my ears, because we can keep talking about productivity.
And I love talking about productivity. Chaps, thanks so much
for coming on and sharing your wealth of experience and insight,
as always.
S2 (21:45):
Well, you're a great host, Jackie. You you know how
to get the best out of us.
S3 (21:48):
Stop it. Have a great weekend, guys.
S1 (21:50):
Thanks, guys. Today's episode was produced by Julia Katzel. Our
executive producer is Tami Mills, and Tom McKendrick is head
of audio. To listen to our episodes as soon as
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(22:12):
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I'm Jacqueline Maley. Thank you for listening.
From the newsrooms of the Sydney Morning Herald and The Age.
This is inside politics. I'm Jacqueline Maley. It's Friday, August 22nd. Well,
this week was a very exciting one in Canberra, especially
if you're the kind of person who really digs the
philosophy of tax and transfer. We are talking, of course,
about the Economic Roundtable, which was hosted by Treasurer Jim Chalmers. Meanwhile,
(00:27):
Health Minister Mark Butler began the necessary but painful process
of reining in the enormous growth of the NDIS. Here
to discuss all this, we have our chief political correspondent,
Paul Satchell, and as ever, our special guest star and
delightful senior economics correspondent, Shane Wright. Welcome, gentlemen.
S2 (00:46):
How are you both? And and wannabe Heather Locklear? That's
exactly right, jacki.
S1 (00:50):
That's right, that's right. Always. Okay, we've been calling it Canberra. Coachella.
And I do want to just note for the record
that Chris Richardson, independent economist who was an attendee of
the Economic Roundtable, has picked up this phrase, and he
actually tweeted it this week as he was on the
way to the economic Roundtable on a murrays bus.
S2 (01:10):
Well, that's the sort of impact you have, Jacqueline Maley.
You you're you're permeating the economic and policy ether like.
S1 (01:19):
Yeah, yeah, yeah, we're influencers. We're all influencers. Okay. So
the economic roundtable wrapped up on Thursday evening. Paul, tell
us what came out of it.
S3 (01:27):
There were some conclusions and some were shorter term and
some were longer term. So you'll remember weeks ago when
we started talking about this economic roundtable, it quickly turned
into a moment where there was a lot of commentary
that this might be a really decisive turning point for
the government, where it might start to look at wholesale
tax reform and big new economic reforms that might kind
(01:48):
of change the trajectory of the government. Over time, expectations
were managed. It narrowed down to a conversation that was
about what some would describe as low hanging fruit around deregulation,
speeding up approval processes for housing for green energy projects,
getting the skills sector to work better to make sure
we've got the right people working in our economy, um,
(02:09):
improving our migration system to improve, to ensure we're, uh,
we're using our migrants in the best way possible. All
of those things were ticked off by the government, and
there were some real merit in those ideas.
S4 (02:19):
There was 29 hours of discussions in the end. Uh,
there was, by our count, something like 327 different contributions
made over the course of those three days.
S3 (02:32):
Uh, very important economists we spoke to last night said
that this didn't set the world on fire, these immediate actions,
but they gave the government a new menu from which
to choose from, some of which could have a serious effect,
a real, tangible effect on productivity between now and the
next election, because they can be done quickly. I'd describe
these this list of actions from the Treasury side at
(02:53):
about ten of them as like one percenters, some of
which are more than 1%. That's probably a little bit harsh,
but quick, smaller things that can be done quickly, which,
taken together, can have a tangible effect on productivity. And
I think economists will give credit to the government for that.
There was another element that the treasurer hinted at, which
and Shane will get to this. And Shane's been writing
(03:14):
about this this week, which I'd describe as kind of
the holy grail, maybe of economic reform, these big picture
items around, um, ensuring that the intergenerational compact between younger
and older Australians is fixed, that we, uh, take away
the burden of income tax from younger Australians and working Australians,
that we potentially tax assets and wealth more at a
(03:37):
higher level so that we can, uh, share the spoils
of the Australian economy and wealth more equitably. The treasurer
got to this, this final point on the tax system
right at the end of his about 25 minute preamble.
And what he said was that at the roundtable, there
was consensus that the tax system is not fair that
younger people, he hinted at this, pay too much income tax,
(03:59):
that older people have too good a ride, and that
something needs to be done to look at the tax system.
He didn't commit to any items, but he said Treasury
would start addressing these issues. This is obviously something that
will create huge, contentious debates about potentially taxes on superannuation,
on removing the capital gains discount, potentially looking at negative gearing,
(04:20):
as well as doing something on the tax mix, potentially, uh,
and trying to ease the burden on younger Australians. We
don't know where he wants to go with all of that.
He said this would be a matter for cabinet, but
the debate's been started and there was another another item
that we knew also that was in the works, which
was the at least pausing and potentially redrawing of the
national construction code, which builders and many other experts say
(04:43):
is making it too difficult to build a house. So
effectively streamlining the rules that are prohibiting house building happening
more quickly. One of the.
S2 (04:52):
Can I stop you there for one second, Paul. Like
because this is the like the national construction code and
this goes to the whole oh they've these things we
knew this wasn't an issue at like this issue had
come up during the election where the coalition said, we're
going to freeze it for a decade. And there was
a real big pushback from the industry. But you go
(05:14):
back even two months ago, it had disappeared. And it's
only because of the of the roundtable that it's really come,
come to the fore very quickly. Like most people had
no idea that this 3000 page behemoth existed, except if
you're a poor builder having to work out what size
or what depth of a firewall you had to put
(05:35):
into a house. So this is it's interesting about how
we go, oh, this is a thing we knew. But
go back eight weeks, you and I and Jackie would
not be discussing the ins and outs of the national
construction code.
S1 (05:48):
I mean, I guess it's particularly important for the government
now politically, because they've made promises very concrete, firm promises
about how many houses they're going to build. And they've discovered,
perhaps belatedly, that it's really hard to build houses because
there's too many regulations.
S3 (06:01):
Yeah, I think you're probably right, Shane. I mean, we've
read stories about it for weeks now, and so we've
been accustomed to it being on the menu, but it
has certainly come about into public debate only in the
last few months. I think you're right about that.
S1 (06:12):
Okay. So so we had some agreement on some of
these topics. I mean, it's pretty small beer. We're not
talking about major tax reform. Major economic reform. Shane, what
was your impression of the conference?
S2 (06:23):
I was always a bit cynical, especially around tax, because
tax is the one of the most contested spaces going around.
And you actually saw the way that the business lobby
reacted to the Productivity Commission's idea of a cash flow
tax like it, like they were trying to kill it,
probably within about six hours of it going live. So
(06:45):
and that's just around company tax where there's like every
business bar five the 500 largest. We're going to get
a tax cut, including some really substantial firms with turnover
between 50 million and 1 billion. No matter what you did,
they were going to get at least a 5% tax cut.
S1 (07:04):
But they were saying the overall tax burden was going
to be higher on business.
S2 (07:08):
For 500 firms. Yes. Not for the other couple of million. Ultimately,
because so much of tax we know about the problems. But, uh,
the way and Paul and myself picked this up on
the in the press conference that Chalmers gave was the
fact that, yeah, the him conceding there's intergenerational issues. Um,
(07:29):
and it's, it's whacking younger people. We've heard say Ken
Henry has been talking about the international intergenerational bastardry of
the tax system, but now he's actually like he's like
the Pied Piper. He's finally got a team on his side.
And they're singing from a similar, uh, hymn book now.
S1 (07:46):
Yeah. So you wrote a really compelling piece about this
this week, And you basically, I think, came to the
conclusion that this intergenerational bastardry, we don't usually use vulgarity
on this podcast, but we're quoting Ken Henry. So it's okay. Yeah.
That's right. Yeah. So basically the intergenerational inequity where the
tax burden is much higher on working age and younger
people than it is on older people. And you basically
(08:09):
came to the conclusion that not much is going to
be done about that huge structural issue out of this roundtable.
Is that is that what you think?
S2 (08:17):
Yes. Although the fact that he's conceded that there's a
problem and it depends on how you go about it.
Like this government is still like the noise around the
government's change on superannuation, which is affecting just tens of
thousands of people, you would think is the end of days. Yeah.
Amongst some of the criticism. And you go, oh come
(08:37):
on fellas, let's calm down a little bit. But it's
that's the sort of noise when it's an issue around
the globe where so many people, the wealth, wealth is
the like. We've always talked about income inequity. Yeah. But
now we're getting into like, people have realized. Hold on.
It's where wealth is, where we have so many multi-billionaires
(08:58):
people have sort of what the hell's going on? Yeah.
And the working age population, particularly if you're in your
20s or 30s, you feel like you've absolutely been rogered over.
And they and these people have absolutely every right to
believe that. So that argument about where how wealth is
treated as opposed to income is, I think it's something
(09:18):
that's going to keep gathering, gathering attention.
S1 (09:21):
And Shane, you wrote a piece this week basically saying,
you know, it's easy to be cynical about the Productivity
Roundtable that, you know, not enough has come out of it,
or that we didn't get a lot of kind of
actionables that are going to happen straight away. But you
also pointed out that genuine economic reform takes a very, very,
very long time. And if you don't build consensus over
a very, very, very long time, then it just won't succeed.
(09:42):
And Ken Henry knows that better than anyone because, you know,
he put forward the mining tax and a carbon price,
and both of those died in a big political fight.
So do you think that's what the government is trying
to do? Basically use this as a groundwork for a very,
very long process of political consensus building for some major reforms?
S2 (10:01):
Yeah. Paul Circle might be on the aged pension by
the time it gets all done. Yeah. But, um, and
he's a very young man right now. Let's let's make
that clear for those who can't see him. However, maybe
it's the world that we live in that we get
instant gratification from everything. Policy change does take time. It
really does. Like, as you notice the column I wrote,
(10:24):
the GST took 25 years from being explained to being
put in place. And Paul Keating, someone who really does
know how to communicate and bring people, bring people with him.
On reform he lost. People forget that in 1985, he
wanted a consumption tax and got beaten by his own
government on that introduction. So it does take time. You
(10:47):
mentioned Henry the Standard. One of his proposals was the standardized, uh,
tax refund for people who line up every year, go
down to a tax accountant to get their tax done.
That was in Henry and finally made it into the government's, uh,
election agenda. And we and already you can see some
(11:08):
there's some big name tax agents saying, oh, this is
end of days, right? Um, we're talking about something that
will like, this is where Paul's absolutely correct, where Saul
Eslake talking about one percenters or, or uh, Danny, Danny
would talked about just making a change that might give
you an inch of improvement.
S1 (11:27):
Um.
S2 (11:27):
After a while, you get to a full yard. Maybe
you'll go the, the full nine yards to go into
a movie analogy, that sort of thing. It it just
takes time. And people want to see everyone and I
understand want to say, ah, we've got the whole solution.
Here it is. We'll put in place by the end
of the week, it'll be all done. That's not how
society works at all.
S3 (11:49):
And they say there's a lot of, uh, there'll be
a lot of talk, uh, in coming days about how
this moment failed to match the Big bang moments of
economic reform, particularly from the Hawke-keating era, and then in
part from the Howard era and what Jim Chalmers would
say if he was on this podcast and being honest,
which he may not be if he was on this podcast,
(12:09):
would be to say that there are no, you know,
floating the dollar ideas that the government can easily enact
to do immediate big change.
S1 (12:19):
Yeah. So what happens politically from now, Paul? I mean,
will this just kind of fade into oblivion? Will they
make these changes and we might get some incremental improvements
on productivity. And they can sort of point to those
or will they use it for. I don't know, some
sort of agenda building exercise or to actually do something
major over the next two and a half years, something
major that might upset people but might also really benefit
the economy.
S3 (12:40):
Well, Chalmers was asked this yesterday, was he, as he
was leaving his press conference, the question was asked by
a few different people in different ways, and the question was,
do you feel like you're exiting this week with a
new public mandate to do something more bold as this
term goes on? His answer was mixed. He said that
our mandate comes from the people being the election, where
(13:00):
they had a very thin mandate on economic reform that
allowed them to do not very much. But he did
say that the nature of this government is that we
bring people into a conversation, and that's how we do change.
We tell people what we're doing, we bring them along
for the ride. And I think what he was hinting
at was that this week, for the first time, he's
(13:20):
been more honest about what the problem is that needs
to be solved, being the tax system moving away from
all the low hanging fruit that he's already going to enact,
and by being upfront about the problem that needs to
be solved on tax, I think he's giving himself a platform. Yeah.
Just through using these words to do some more later
in the term. The opposition's been very cynical this week.
(13:40):
They've called it a stitch up. Ted O'Brien had a
probably slightly confected brawl with Chalmers inside the.
S1 (13:46):
I know that was that was exciting. That was a
little juicy piece of gossip out of an otherwise dry
round table.
S3 (13:52):
Little, little. My favourite piece of reporting for the week, jacki,
for sure.
S1 (13:55):
It was. It was so exciting. A little a little
exchange of terse words.
S3 (13:59):
Well, the background to this is interesting. So Ted O'Brien's
The Shadow Treasurer used to be the energy spokesman, was
responsible for the nuclear plan, the disastrous nuclear plant in
the last opposition. He's now the deputy leader. He agreed
to go into the round table as one of the
25 or whatever attendees. He's the only opposition MP at
the Round Table. There was quite a lot of pressure
from some of his colleagues, his senior colleagues in the opposition,
(14:21):
who believe that his attendance at the Round Table legitimized
the whole project, which was a Chalmers project, and gave
weight to the government's agenda. And so there was some
internal pressure on him to show a point of difference
in the room. There was some conjecture in the days
leading up as to whether he would do a walkout,
like a staged walkout to protest it.
S1 (14:42):
I love a walkout. I mean, you really capture people's
attention if you flounce out of a room.
S3 (14:47):
Yeah. It's not really his style to do something like that.
So what he did decide to do was on the
last day, the Thursday, as they were talking about budget
restraint after Jenny Wilkinson, the new finance Treasury, um, gave
her spiel on budget management, Ted O'Brien put his hand
up and said, I'd like to have it have a say.
And he gave a very forceful spiel which cited an
op ed that he'd written this week in one of
(15:08):
the papers, which effectively said that Jim Chalmers had ruined
the budget. He cited a bunch of different statistics, and
Chalmers interjected also forcefully and said, quote, according to a source, Ted,
this isn't Question Time. And he also said that every
number you have just read out there is wrong. This little,
this little. Barney went on for a little while, apparently.
(15:29):
And Daniel Mukhi, the New South Wales treasurer, apparently interjected
and said, guys, we need to move on. No one
wants to hear this. Can we can we go to
the next speaker?
S1 (15:37):
Well, cue the great Peacemaker. Um, what a scene. What
a scene.
S2 (15:41):
Apart from. I really need to get out more. Jackie.
You really are going crazy. It's not Shakespeare, that's all
I'm saying.
S1 (15:54):
Let's move on quickly to the NDIS, because, um, in
terms of budget management and structural budget sort of overhangs, um,
the NDIS has been a real headache for the government
and for the last coalition government as well, just because
of the the rate of growth of the scheme and
the enormous, enormous expense of it. So is it coincidental,
do you think, Shane, that this week, um, Mark Butler,
(16:16):
the health minister, went to the National Press Club and said, look,
we're actually going to overhaul this and we're going to
do something about this, and we're going to cut that
growth rate right down from I think they wanted to
do it 8% a year or keep it to 8%
a year. But now he's saying, no, we're going to
go further and keep the growth to 5 to 6%
a year, and we're going to basically kick off a
lot of young autistic and kids who are sort of
(16:37):
on the ADHD spectrum. Onto another scheme. Tell us a
little bit about that.
S2 (16:42):
Yeah. It's no coincidence. It has been a very interesting
week because there's this. And there's also a change around
deeming rates which hit pensioners. Yeah, I think someone tried
to describe it. It'll only save $1.8 billion. I look,
I would get out of bed for $1.8 billion. So
I don't think it's that inconsequential. However, Mark Butler, his
proposals as our colleague, the brilliant Natassia Chrysanthos, has mentioned,
(17:06):
what he's talking about is a possible saving of close
to $100 billion over the next decade if they can
get this policy up and going, which is effectively you, grandfather,
the kids who are autistic, who are on the scheme now,
grandfather them and stop new ones coming on, uh, within
(17:29):
the next 18 months or next two years and move
them into a much cheaper and much more targeted scheme, which,
and Butler's argument is ultimately the NDIS was set up
for people with permanent and irreparable disabilities.
S1 (17:46):
Severe disabilities, severe disabilities.
S2 (17:48):
And and I you can understand parents who've got, uh,
autistic children and they there is a spectrum as a
as my wife is a teacher and she deals with
kids who are across the spectrum in this space. Yeah.
You can understand if you had this chance to get
some great, like, huge like we're talking huge amounts of
money to help them. You can understand why you do it.
(18:09):
You do.
S1 (18:10):
It transforms people's lives, I think, and particularly for kids
who are maybe from lower socioeconomic backgrounds where they wouldn't
have gotten that, that assistance originally.
S2 (18:18):
Of course, the studies are showing that people, higher socioeconomic
parents who are really doing well to get there, they've
been able to negotiate the scheme really well and access
this scheme, which is actually coming in. And you're right,
it is coming at a huge cost to every taxpayer.
So yeah, what Mark Butler has outlined, you can see
(18:41):
the commitment to it because they understand it has to
be done and do. Kudos to the coalition because the
coalition did not get any help from labor when the
roles were reversed in terms of trying to bring change
to the NDIS. The coalition's already signalled, look, we're open
to this because they understand that this is a this
(19:02):
is a bipartisan problem that they have to address.
S1 (19:05):
Yeah, and I think the NDIS, for the most part,
is usually been treated as a fairly bipartisan issue because
it's so important to, to disabled Australians. Paul, do you
think the government's likely to get any political or any
kind of public backlash over these cuts to the NDIS?
S3 (19:19):
Well, I think the timing is is interesting. This is
a few months after the May election that labor is
openly admitting that even their 8% growth target means that
this scheme is still going to increase at a really
eye watering rate 8% compounding when the when a scheme
costs nearly $50 billion per year means that a kind
of behemoth will double in pretty quick time. Any politician
(19:41):
you talk to in private acknowledges this scheme is absolutely
nothing compared to what it was meant to be, and
that it needs to be reined in. But when you
have an election coming up, people aren't willing to be
honest about these things in public. Because even when you
do try and make reasonable changes to a scheme that
creates losers, losers can be loud and losers will be
(20:03):
latched onto by politically interested parties to make a political point.
But I think Mark Butler's honesty on Wednesday and the
way he framed the argument to say to parents, no,
no individual family is at fault here. It's not your
fault that you have signed up to this scheme. There's
a lack of services for autistic kids in schools and
in other areas in the community, because everyone has allowed
(20:25):
the all states and other parties have allowed the federal
government to pay for this thing because the NDIS is there.
He's saying no one is to blame. We're not targeting you.
But this game doesn't work for the broader public interest,
and something needs to be done. So an unencumbered government
with a big mandate and a strong political position can
be honest and tackle big issues even when they are contentious.
(20:47):
I think that's a that's a that's that's one of
the benefits of having a commanding election win, which we
should be pleased with for the public interest, I think.
S1 (20:55):
Yeah, yeah. Okay. Um, chaps, what are we going to
do without the Productivity roundtable in our lives? Like, is
there a shaney? Do you feel like a hole in
your soul now or never?
S2 (21:06):
The the the race for economic reform never ends. That
that finish line just keeps going off and off into
the distance. And look, given what they've commissioned, this thing
is going to keep going and going. And every couple
of weeks myself or Mr. Sarkar will ask the treasurer,
so how's the roundtable going? Where are you up to?
It isn't going to end that soon.
S3 (21:28):
And he'll say, he'll say, oh, don't remind me of
that thing.
S1 (21:30):
Yeah, that. That old thing. Um, well, this is music
to my ears, because we can keep talking about productivity.
And I love talking about productivity. Chaps, thanks so much
for coming on and sharing your wealth of experience and insight,
as always.
S2 (21:45):
Well, you're a great host, Jackie. You you know how
to get the best out of us.
S3 (21:48):
Stop it. Have a great weekend, guys.
S1 (21:50):
Thanks, guys. Today's episode was produced by Julia Katzel. Our
executive producer is Tami Mills, and Tom McKendrick is head
of audio. To listen to our episodes as soon as
they drop, follow Inside Politics on Apple, Spotify or anywhere
else you listen to your podcasts. To stay up to
date with all the politics, news and exclusives, visit The
(22:12):
Age and The Sydney Morning Herald websites and to support
our journalism, subscribe to us by visiting the page or. Subscribe.
I'm Jacqueline Maley. Thank you for listening.
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