Albanese Says Tax Reforms Needed to Counter Rise of ‘Grievance-Based’ Politics

Prime Minister Anthony Albanese says Labor’s tax and wealth vehicle overhaul will help protect Australia’s democracy and social cohesion as more voters look for solutions from populist parties.

Anthony Albanese told an economic summit the federal government was forced to take major action on negative gearing and capital gains tax in the May budget.

“If people think the economy isn’t working for them and they’re working their guts out and they’re not getting an opportunity, I’ll tell you what, they will turn to more simplistic, grievance-based politics,” he told the Australia’s Economic Outlook summit, hosted by News Corp, on Friday.

“That is the context in which my government is saying, ‘No, we’re going to deliver real change for the better.'”

While he didn’t reference Pauline Hanson’s conservative-leaning One Nation directly, the prime minister’s speech addressed the rise in the polls of the party and across Western democracies.

Albanese said he made a political judgment to change his position on tax reform because “if government stands still, the world will go past them.”

“I reckon I could dig up 50 editorials over my time as prime minister and leader of the Labor party that call for tax reform, that call for government to get serious about it,” he said.

The tax changes, which also included introducing a minimum 30 percent tax on capital gains, and a $250 a year tax offset for 13 million workers, passed the House of Representatives on Thursday.

But the laws face an uncertain future, with the Greens yet to indicate if they will back the federal budget reforms through the Senate.

The Greens have threatened to team up with the Coalition opposition to force Labor to extend a “rushed” two-day Senate inquiry that will scrutinise the laws before they go to the upper house.

Assistant Treasurer Daniel Mulino said the laws were not being raced through as issues surrounding tax and housing had been on the agenda for a long period, including at an economic reform roundtable in August and in 17 hours of debate in parliament so far.

“It was in that broader context that the budget was framed and so there has been a long-running discussion around these kind of issues and, in fact, a lot of the issues dealt with in the budget have been looked at in previous tax inquiries,” he told ABC Radio.

While the government has come under fire seeking to legislate the tax changes first and then potentially introduce carve outs and exemptions at a later date, Mulino said that was par for the course.

But Deputy Opposition Leader Jane Hume said there was no need to rush the changes through as they don’t kick in until 2028—an election year.

Investors have warned that Australia’s startup and venture capital sector would be particularly impacted by the removal of the 50 percent capital gains discount in favour of a flat tax and inflation indexation model.

The government is consulting on a potential carve-out for startups, but the prime minister did not accept entrepreneurs would leave the country as a result of the tax changes.

“Whenever I meet with investors in New York or Abu Dhabi or Jakarta or the EU, they want to do business here in Australia,” Albanese said.

“They recognise that investing in this country means buying into a stable democracy with a stable legal system and a skilled workforce with an abundance of clean, cheap energy.”

Albanese said a long process to exempt large groups from the tax changes would only fiddle around the edges of the status quo.

By Jacob Shteyman and Andrew Brown in Canberra.