Labor plots budget housing boost to fend off One Nation
Changes to the federal budget will counter political discontent fueling the rise of right-wing populism, the treasurer says as he unveils a flagship productivity package aimed at boosting living standards.
As voters prepare to cast their final votes in the Farrer by-election on Saturday, electing a right-wing One Nation MP to the federal parliament for what is likely to be the first time, Dr. Chalmers announced Labor would cut regulatory costs for businesses by $10.2 billion each year.
The productivity drive, which includes reducing repetitive red-rape tiers for businesses and simplifying skills recognition for migrant workers, forms part of a wider theme around Tuesday’s budget to make it easier for young Australians to buy homes.
Dr Chalmers said in an interview with AAP before Nigel Farage’s right-wing populist Reform party enjoyed a huge surge in local elections in the UK that economic discontent was affecting politics around the world.
“We don’t want to go down that path in Australia,” he said.
“We have a lot of work to do here, but we are not complacent about the risks.
“One of the big motivations for this budget is to help more Australians get a foothold in the economy, and part of that is to help more people get a foothold in the housing market.”
The government maintains that its primary focus on increasing homeownership is to increase supply.
The budget promises to build on state and territory efforts to liberalize planning and zoning laws by eliminating red tape that hinders modern construction methods such as modular housing.
There will also be changes to the score test for skilled immigrants, and moves will be made to accelerate the recognition of the skills of immigrant artisans in order to address the shortage of workers in the sector.
Support for home buyers will go beyond productivity.
The budget will roll back negative gearing and capital gains tax breaks for property investors; This would give potential homeowners a relative advantage over homeowners, even though most economists expect the impact on prices to be marginal.
Housing reforms risk being framed as a cash grab and an attack on expectations, targeting older generations.
But Dr Chalmers said the “tough decisions” the government was making to tackle Australia’s intergenerational challenges needed to benefit everyone.
“First of all, this is about providing more opportunities to more people,” he said.
“Anytime you go down the hard path of reform rather than the path of least resistance, there will be the usual scare campaigns full of lies and people trying to piss everyone off about the sensible steps we proposed on Tuesday night.
“But overall this is about making our economy stronger and fairer and our budget more sustainable, which we hope will benefit every Australian.”
The government’s productivity package is expected to increase GDP by $13 billion a year.
Small businesses will get their wish to make permanent the $20,000 instant write-off of assets, which the government says will save employers 376,000 hours on tax returns.
But Labor has yet to announce any changes to business tax regulations that would encourage productivity.
Dr Chalmers confirmed the budget will not include the Productivity Commission’s proposal for a new corporate cash flow tax; This proposal was intended to encourage investment, but was rejected by the business community on the grounds that it was too complex and increased the tax burden.
Dr. Chalmers said it was the toughest of the five financial plans during his tenure as treasurer, but also the most ambitious and responsible.
The war in the Middle East has added a new resilience focus to the budget and $10.7 billion in new spending to boost Australia’s fuel reserves.
Feasibility studies will also be carried out for the expansion of existing fuel refineries or the construction of new ones.
“For the most part our approach has not been to try to go back to 1950s-style protectionism,” Dr Chalmers said.
“Our goal is to recognize the opportunities of the modern economy. To look forward, not back.”
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