Australian news and politics live: Anthony Albanese grilled on GST, CGT and Budget broken promises in Perth

Angus Taylor said he spoke to “a bunch” of small business owners over the weekend who felt that they were “under assault” from the Budget changes.

“The Labor Party clearly doesn’t like small business, and they want small business to help to fund their rapid growth in spending,” he said.

Deputy Liberal leader Jane Hume says that small businesses were “seeing their very structures under threat”.

“So many small businesses are set up using a trust structure, a perfectly legitimate, perfectly legal structure to set up to protect assets and to assist small businesses,” she said.

“Well, Jim Chalmers is accused of these people of avoiding their tax obligations. How dare he?”

There are more than 2.6 million small businesses in Australia.

The latest tax office data, from 2023, shows that about 303,000 registered trusts are used by businesses, or 11 per cent of the number of small businesses.

Angus Taylor has been pushed on a warning from one of his backbenchers that the Coalition’s rhetoric around migration alienates migrant communities.

“No, it alienates the government that’s got it wrong,” the Opposition Leader said in Penrith, western Sydney.

“This has got nothing to do with migrant communities.

“We think migration is incredibly important to this country. It always has been, and there always will be, but the numbers can’t be too high, and the standards can’t be too low.”

Mr Taylor used his Budget reply speech last week to outline a plan to link annual net overseas migration, which includes returning Australian citizens, to the number of homes built.

He said that would result in the largest cut to migration in history.

Anthony Albanese was asked about Opposition Leader Angus Taylor’s assertion on Sky News on Monday night that the Coalition would “work with whoever I can work with to defeat Labor at the next election” when he was pushed to rule out a partnership with One Nation.

“The door isn’t open, there’s no door. They’re in the same room, they’re in the same policy room: One Nation and the Liberal Party and the National Party,” Mr Albanese says.

“There are now three right-wing parties in Australia, all advocating policies that aren’t in the interests of social cohesion and what’s needed to bring the country together.”

Anthony Albanese has attempted to label his changes to capital gains tax discounts as a return to a 25-year-old system.

“What we are simply doing is returning the system to what was there before 1999,” he said in Perth on Tuesday.

“When those changes were introduced, what we’ve seen since then is a massive distortion of investment towards housing away from other forms of investment, because of the changes that were made. What we’re doing is simply moving to a real gain system.

“That’s not when the normal course of business occurs. When a capital gain occurs, it’s looked at the real gains, that is, the gains less inflation as we go forward, and that’s a system that operated effectively … (until) 1999.”

The Prime Minister says the legislation for the changes to capital gains tax discounts and negative gearing will be put to Parliament when it returns in the next fortnight.

But the changes to taxation of trusts, which have attracted strong criticism over recent days, “will take longer to develop” and will be legislated later this year.

“We’ve put in place a system where if you have a fixed trust, then you’re not impacted by any of the changes which are there. We put that out very clearly, very clearly in our budget,” Mr Albanese said.

Anthony Albanese is speaking now alongside WA Premier Roger Cook at a building site in Perth.

He was asked how West Australians can trust him on the GST, given he’s broken his promise on property taxes.

“We support WA getting its fair share of the GST because that’s the right policy for the nation,” he said.

“I’ve been very consistent.”

Mr Albanese said that he’s just handed down his Budget and has been very clear in government and in opposition about support for the 2018 GST deal.

“I back WA across the board. WA has an important role to play in our economy, and we have a very strong WA contingency in our caucus,” he said.

The Premier said that “the Prime Minister’s given us a rock-solid commitment that Western Australia will share, will receive its fair share of the GST”.

Jim Chalmers has announced a second round of reforms to the foreign investment framework that includes a new target of 30 days for all low-risk applications, and further streamlining the register of foreign-owned assets.

Some low-risk transactions won’t have to go through the approvals process at all, and those who can use exemption certificates will be expanded to reduce the regulatory burden on frequent low-risk investors.

However, the most sensitive sectors and businesses will have a targeted increase in the level of screening applied.

The full list of updates is here.

The Reserve Bank of Australia’s chief economist Sarah Hunter has warned entrenched inflation could force up interest rates and induce a recession.

In a speech about inflation and the Middle East conflict, she warned of inflation expectations leading to firms putting up prices.

“Moreover, if expectations rise persistently, it becomes harder for the central bank to bring inflation back to target, as it must both bring expectations back down and restore the balance between supply and demand,” she told the Bloomberg Forum for Investment Managers in Sydney on Tuesday.

“Doing so may require a more substantial slowing of economic activity, as we saw during the early 1990s recession.”

The RBA’s assistant governor for economic policy also suggested more price rises were likely as a result of higher fuel prices since the Iran war began in late February.

“Reports from our liaison program suggest that some firms have responded already, with fuel surcharges raised by firms at the start of supply chains that flow into a broad set of industries,” she said.

She also suggested Labor’s plans to build 1.2 million homes by mid-2029 would be difficult, given the sharp rise in construction costs.

“For example, some construction firms – who have been relatively highly exposed to transport and oil-derived raw materials cost increases – are reviewing prices for new contracts,” she said.

Jim Chalmers gave a speech at a Bloomberg event for investment managers in Sydney this morning as Labor battles to ger Aussies on board with their Budget.

The Treasurer ran through the “five pillars” of the Budget he handed down last week, and now is moving on to, as he describes it, dispelling myths about what the tax changes mean for investors.

There’s been a huge backlash from young people who have invested money in ETFs and other shares in the hope of building a house deposit.

“The impact of our changes will depend on the rate of return, the inflation rate, marginal tax rates, but there will be some people that will do better under the new arrangements than under the current arrangements,” Dr Chalmers said.

He said if you look at the average growth on the share market over the past 20 years, “investors in shares would have been equal to or a bit better off with a discount based on indexation compared to the existing policy”.

The capital gains discount, however it is calculated, only applies after assets have been held for at least a year.

“Capital gains are already taxed at marginal rates, as you know, of up to 47 per cent after applying the relevant discount. So, what we’re talking about here is the size of the discount, the calculation of the discount, which will depend on the rate of asset growth and inflation, and that’s why it’s not especially easy to perfectly compare headline tax rates on nominal gains in other countries to our new approach,” he said.

“But even for an asset with gains of 10 per cent, the effective tax rate on the nominal gain after adjusting for inflation in the past decade would be less than 37 per cent. That’s less than the rate in other jurisdictions, including California, which is a bit higher than 37 per cent,

“Treasury tells us that the average tax rate on gross capital gains will be around 21.4 per cent by the end of the medium term, that 10-year horizon, which is up from 19.3 per cent today.”

The Federal Government’s changes to capital gains taxes could see WA small businesses cop a double tax bill if they restructure to cope with the overhaul.

Business owners face stump duty when they sell equipment or plant, stock, goodwill or even licenses, client lists and business identity under State tax laws.

Under the Federal changes, which were sold as changes to make housing more affordable, businesses have been caught up in an overhaul in which capital gains taxes will be indexed to inflation.

The 50 per cent CGT discount has been replaced by the indexation measure for any assets held for more than 12 months, with a minimum 30 per cent tax on net capital gains for trusts, partnerships and individuals.

While all CGT assets — which also include shares — will be included, the Government says there will be transitional rules that confine gains changes from July 1, 2027.

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