Tuesday’s budget will have an “emphasis” on tax reform and housing will be a centrepiece, the Treasurer has flagged.
But Jim Chalmers has ruled out any changes to negative gearing contained within the budget papers, saying the government would focus instead on reforming the tax system to incentivise investment in the economy’s big growth areas.
“We have indicated that we are prepared to use the tax system in the service of our big national objectives, as the budget will balance the cost of living … with our responsibilities to the future,” Mr Chalmers told ABC Radio.
“And the tax system does have a role to play there and there’ll be some other tax changes as well.
“In all of the budgets we’ve done so far, there has been modest but meaningful tax reform, and that’s because I believe in doing these in a sequenced and orderly and methodical way.
“people should expect to see more of that on Tuesday.”
He said Australians could expect tax reform in the housing space but “not the kind some people have been calling for”, namely changes to negative gearing.
On the back of comments from RBA governor Michele Bullock on Tuesday that migration was putting pressure on the housing and rental market, Dr Chalmers said there were a number of reasons why there weren’t enough homes in the country.
Housing itself will be a key theme of the budget, with the government on Wednesday announcing $90.6m to boost the number of skilled workers in the construction and housing sector, to help Australia reach the goal of 1.2 million more homes over the next five years.
“(Housing) will be a major focus of the budget on Tuesday,” Dr Chalmers said.
“We know that there’s not enough homes, we need to build much more housing in our communities and in our country.
“We’ve made some quite big investments already and people should expect to see more on Tuesday night.”
He would not be drawn on whether the government would increase Commonwealth rent assistance, pointing to the “substantial” increase in last year’s budget.
“We know that renters are under pressure, but I’m not prepared to go further than that (and announce anything today),” he said.
Dr Chalmers said the ultimate priority of the budget was putting downward pressure on inflation, and any further cost-of-living help would take that into consideration.