The Coalition has vowed to support the small business sector as consternation grows over tax changes affecting capital gains. In his budget reply, Shadow Treasurer Tim Wilson accused Labor of an attack on aspiration, and laid out the Liberal vision.
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TRANSCRIPT:
Former Prime Minister Paul Keating has backed Labor's proposed changes to the way profits are taxed, saying the reforms are structurally sound and will increase equity in the housing market.
In a blistering statement, he said calls to split off profits from startup capital and shares would continue an economic distortion that had preferenced capital over income from wages and salaries.
Opposition leader Angus Taylor has labelled Mr Keating's comments as nonsense.
"I'm not going to be lectured to by someone who thinks that putting Australian values at the centre of our immigration policy is racist."
Mr Keating's comments come one day after Shadow Treasurer Tim Wilson attacked Labor's budget as an assault on aspiration that pulls away the ladder of opportunity during his budget reply speech at the National Press Club.
"Last Tuesday night, Australia was hit with an economic earthquake, and its epicentre was Canberra. There were warnings in the weeks prior but many Australians didn't believe the tremors would reverberate out to them, and following Tuesday, they have been have been hit by aftershocks that have struck at their very confidence."
Some in the small business and start-up sectors have expressed alarm and anger at changes to the capital gains tax discount flagged by Labor in its fifth Federal Budget.
The Coalition has sought to capitalise on this sentiment, including by promising small business reform.
"The Coalition government will consult on a small business act, and we are proposing at least four pillars: a single definition that all Commonwealth law will refer to one definition of a small business; a right to be paid, because cash flow is king; and we will have a legal maximum payment term to small business from government and big business; a right to be heard, and this is particularly appropriate right now."
Mr Wilson said his phone has been flooded with messages from concerned voters.
"The innovators, disruptors, risk takers and builders of this country have worked out this Prime Minister. He's the guy in that group assignment that does none of the work but still wants the grade."
The internet has been awash with AI-generated memes accusing the prime minister of becoming a "47 per cent silent partner" in businesses due to the government's proposed tax changes.
Labor has proposed to change the taxation of capital gains by replacing a 50 per cent discount for assets held for over a year to a rate based on inflation, with a minimum of 30 per cent tax on real gains.
Those changes begin from July next year, and experts say the online backlash has tended to overstate the impact the changes will have.
But Treasurer Jim Chalmers has agreed the policy may need to be adjusted to support the start but sector.
"Well, we've made it clear that we're consulting with the start-up sector. We made it clear privately, before the budget and in the budget papers, and publicly after the budget, that there are some issues particular to the start-up sector, which have been the focus of our consultation. And so we're consulting with the sector in good faith to see if there's a way through there that we can both live with."
He said the Coalition's alternative budget would lead to bigger deficits, more debt and inflation.
"Today was the least coherent, least credible shadow treasurer hit out after a budget that anyone can remember. Now, Tim Wilson's misinformation and his lies didn't last 30 minutes of scrutiny at the National Press Club."
The Coalition has vowed to repeal changes to capital gains, negative gearing, and discretionary trusts, which will be subject to a minimum 30 per cent tax rate from July 2028.
Instead, they've promised to end bracket creep by indexing income tax rates to inflation, which they say would return $250 to taxpayers in the first year, ramping up to $1000 by the fourth.
Tim Wilson wouldn't say how the Coalition would cover the cost - which is expected to exceed $22 billion.
"What I said in my speech is that we're there's going to be one hell of a clean up job after this government. We don't have very much confidence in their current spending and their current budget. There seems to be taxes that they haven't disclosed. The Prime Minister is even flagging additional increases in income tax that weren't within this budget, so it's impossible to say with any confidence about where we're going to be in two years time."
He says the Coalition will focus on returning the budget to a sustainable position, acknowledging spending cuts would be needed to offset the cost of the Coalition's tax policies.
"Well, there'll be offsets, meaning there will be, yes, cuts, because there will be different parts of the program, of programs that the government is wasting money on. As I said, the government is trying to desperately cut their own budget right now in different parts, because they have created these honey pots, particularly in public programs that are going to fraud, waste, and corruption. They've been dragged there, kicking and screaming to make sure that public money is used to appropriate purposes, we want to rebalance the budget back in favour of Australians away from fraud and organised crime."
During his set piece speech, Mr Wilson spoke about the need to protect the Australian value of a 'fair go', but unlike Angus Taylor, he didn't mention migration.
The Coalition is proposing to make significant but as yet unspecified cuts to net overseas migration by making arrivals contingent on new housing builds.
Mr Wilson also omitted plans to prevent new permanent residents accessing the NDIS and welfare programs, including family support benefits and parental leave pay.
During questions after the speech, SBS Political Correspondent Naveen Razik asked Mr Wilson how this fits with a fair go.
"We, of course, have included grandfathering measures in our proposals. We've excluded things like health and education, but let's be clear about this. If you want a nation of a fair go, I don't believe that we are setting new Australians up for success if we're saying the solution to your problems or your challenges to become welfare dependent."
In a statement, the Federation of Ethnic Communities Councils of Australia has said migrant cohorts that pay the same taxes should be eligible for the same benefits.
