Interview with Natasha Etschmann, Tash Invests podcast

Subject: 2026 Budget Natasha Etschmann: Hi Jim, thanks so much for joining us. Jim Chalmers: Thanks Tash. It’s probably been a very, very busy day with all of the Budget stuff.

Do you have a highlight of one of your favourite things? Absolutely, actually. There was a group that’s campaigning for us to subsidise public housing for people on Youth Allowance.

There’s a difference in how Youth Allowance is treated in the social housing space and we discovered that there was a campaign about it. We learned more about it, we fixed it in the Budget and we got a visit from the people who had been running this campaign – Oh awesome. – who left behind a beautiful piece of original art. We had a great chat about the difference that we’re making in the Budget.

So for me, actually, it’s quite – it’s not even close. That’s my favourite from today. That’s so wholesome with all of the news around negative gearing and capital gains, it’s nice to hear.

Yeah well also. I said to them it’s like, the day after the Budget what happens as the Treasurer is everybody’s got a view and a lot of people who’ve got a different view to what you released in the Budget and that’s fine. It’s pretty rare for people to come visit and say, ‘You nailed that, well done!’ Yeah.

I have noticed there’s a lot of negativity, I guess, from all sides in terms of like things not being enough or people not enjoying the different changes. Some pushback I’ve had online has been around people who are buying shares or like to buy ETFs, who are quite worried about how if this Budget was meant to be around fixing housing affordability, why change capital gains for shares and businesses as well?

Yeah. Well, what we’re trying to fix is this discrepancy or this distortion that’s happened in capital gains. So at the end of the 90s, there was a big change made, as you probably know.

And what it meant was when we went from indexation to the 50 per cent discount. It introduced a big distortion and we analysed a 20‑year period where on average, the 50 per cent discount had basically over‑compensated people investing in established housing and under‑compensated people in shares or units or in other kinds of investments. And so we hope to take that distortion out of the system.

And obviously, people’s returns, people’s marginal rate, all of these things will play out, so it’s hard to come to a definitive average. But it may be that other kinds of investment become more attractive once we fix this discrepancy in housing. I still feel like property is more – like there’s more incentives to invest in property with the principal place of residence, like the capital gains exemption.

It’s easier to get loans for property than it is for business and shares as well. Look, I would love to get a million‑dollar mortgage and just buy shares, that would be great. But unfortunately, you have to buy property first and then refinance and take money out for other things.

It still feels like the system is geared towards property in that way? Well, there’s still some incentives to invest in property and to be upfront. I mean, we’ve still got – even after the changes we’re proposing last night, we’ve still got negative gearing for new properties because we want people, if they want to make that kind of investment then that’s fine.

We’re asking them to invest in new properties so that they’re adding to the stock of housing supply in the country. The principal place of residence exemption feels a little bit unfair for young people. Like I was lucky enough to buy a property a few years ago and now I’ve got $300,000 that’s going to be capital gains tax‑free, which is amazing.

Would there ever be some kind of like flat, I don’t know, some flat rate which could be applied across different assets? I think young people today if they want to buy shares maybe for the first 10, 20 years to save up for their deposit, they’re kind of missing out on those free capital gains? Yeah.

That’s not something that we’ve been considering. Obviously, we think there are good reasons to exempt the family home from the arrangements. We’re not proposing for a second to change that.

There are a whole bunch of ideas out there about different ways to implement the changes that we announced last night. Like, another good example is in the startup sector in VC. We’ve been doing a lot of work with the sector even before last night in seeing if we could recognise the different circumstances there and you know, we’re not planning to re‑open everything.

But there is 1 or 2 cases where we’re doing some more consultation in tech and VC, and startups are a really a good example of that. Oh, that’s awesome because I’ve seen a lot of people giving feedback about that one online. Yeah, that’s okay.

I mean, genuinely that’s good because, you know, we try and work with – particularly that’s a really dynamic part of the economy. It’s only a tiny sliver of the economy. We want it to be a bigger part of what we’re good at in Australia, and so there’s actually a lot in the Budget to support VC and startups.

A lot of the new tax breaks, the $3.5 billion package – a big part of that is about encouraging, supporting, incentivising more VC and startups. The changes we’re proposing in superannuation are partly about that and so we don’t want to cut across that with these other changes that we’re making. So we’ll keep talking to the sector.

I know this isn’t a federal government thing, but I would love the payroll tax to disappear, personally, and that’s a selfish request. Well yeah. No, I understand.

I don’t think it is necessarily selfish to have policy ideas like that. But there was actually a step in the Budget which people haven’t really noticed or focused on yet – I saw a mention of it but they didn’t really have any specifics – Yeah, we’re trying to work on harmonising it because one of the big inefficiencies – you’d know as someone tapped into the business community that there’s an inefficiency because of different states levying payroll taxes – Yeah.

I have team members in Western Australia, New South Wales, Victoria and Queensland, and they’ve got different payroll tax thresholds. I was going to say, you better have some Queenslanders! Everybody needs at least one Queenslander.

But you would know then, that one of the issues there in payroll tax but more broadly in regulation, more broadly we’ve got this big problem in our economy. We’ve kind of got 8 economies rather than one. So the work that you’re referencing in the Budget is really about the payroll tax part of that.

See if we can do some more work to harmonise it. Definitely. The 30 per cent minimum for capital gains tax is interesting and feels quite unfair for people who may be on parental leave and want to sell some shares, or people who have quit their job to start a business and might not be making any money and have lower income that year.

I understand the reasoning around people who are working that they’re taking a year off, and you don’t want them to try and defer tax to that year. But there’s some populations that I feel like are just a bit left behind with this? Yeah.

I’ve heard a little bit of that, not a lot of that so it’s good of you to raise it. Really what we’re trying to get out there is, a lot of benefit that accrues to people is when they’ve got very high lifetime incomes and then at a later stage when they might be retired or some other life arrangement, they wait and hold onto their assets to sell them then when their marginal rate is lowest.

And so we’ve tried to solve for that in the policy. I understand there will always be people who have a different view about what that means for them but we think that’s the best way to kind of – If we hadn’t have done that, I think it would have encouraged people to hang on to things for longer. Even longer.

I think there was exemptions for people on Age Pension and Jobseeker. Maybe adding parental leave or something would be cool as well? Yeah.

I mean, there are exemptions for people on pensions for good reason. I hadn’t had it put to me yet, the Paid Parental Leave one. But what we’re trying to do basically, is to say for people who have retired, who are offloading assets we want to make sure that people are in the system.

If they’re just waiting until then to sell it when they’ve got a low marginal rate, trying to make allowances for people who are on payments. Yeah definitely. There was in the Treasury, I guess, numbers that you guys have done.

It was like, an estimate of maybe rents going up by 2 per cent. Are there any plans for if you guys have gotten that wrong? So I feel like they might go up more than 2 per cent?

Yeah well actually it was more like $2, and I think the average rent is $400 – Oh $2, it was 2 per cent for the increase in house prices. Sorry, $2 – yeah. Yeah, yeah.

Well, a couple of things about that. I mean, the first and most important point is we provided some modelled likely outcomes from the changes to the tax policy because we knew that would be the area of greatest focus. But across the Budget we actually, with all of our housing policies, we’ll be building more homes and you know that more homes is expected to put downward pressure on rents.

So the whole housing package we think will put downward pressure on rents. Even with this kind of very small modelled outcome with the tax changes. The Treasury does the best they can to model these kinds of outcomes.

What we expect is that kind of very small impact on rents. We expect house prices to grow about 2 per cent more slowly because of these sorts of changes, and it remains to be seen how it plays out but that’s the Treasury’s best estimate. Yeah.

Grandfathering negative gearing is not very popular with some people. Why was that decision made? Because we want to respect and recognise decisions that people have taken in the past.

We’ve tried to make sure that overwhelmingly the bulk of the tax reforms are forward‑looking rather than backward‑looking. We know that there’s strong views about that. I mean, I get a lot of feedback too about that element of it.

But we want to respect and recognise the decisions people have taken. And also don’t forget, I mean you would understand this better than anyone, but a lot of these properties which are currently negatively geared, at some point they will flip into being positively geared. I think typically that happens over a kind of a 10‑year life span.

There’s been less talk about AI because I feel like over the past year, AI has come up a lot but it’s been less mentioned in this Budget. I know there’s going to be like. an ai.gov.au website which is exciting, but in terms of people’s jobs and the economy – what’s the plan there? There are a couple of pieces in there.

There’s some grants for AI innovation and there’s a big piece around government AI because, you know, we see that as a big opportunity to serve people better to use AI in the most appropriate way. So there are a couple of pieces on AI, but the main reason why there wasn’t a heap of new stuff is because we released our big AI plan over the summer. My colleagues, Tim Ayres and Andrew Charlton released a National AI Plan.

Then we’ve got the AI Safety Centre, we’ve got a whole bunch of stuff that we’re doing on AI so we kind of didn’t wait for last night before we released it. Are you concerned about redundancies because of AI? Yeah, I’m concerned about – I think overwhelmingly AI can be a positive thing in our economy but only if we, you know, we maximise the upside and minimise the risks.

And one of the risks is obviously in the workforce. A long time ago, what feels like 100 years ago, I wrote a book about this with a guy called Mike Quigley; used to be the CEO of the NBN and we were grappling with these sorts of issues then. You know, the impact on the workforce of AI and the best version of AI kind of augments people’s skills and makes their experience at work better.

But the workforce is changing quite quickly. And so our responsibility is to give people the tools and the capability to catch up and keep up with the way that this technological revolution is playing out. What about offshoring?

Because that seems to be more and more of a risk as well, with everything being online? There’s an element of that but you hear from some people in this sector as well that more use of AI can sometimes mean more re‑shoring and on‑shoring, you know, when we’re not requiring huge workforces which is the thing that often tempts people to go offshore for all the reasons you’d be familiar with.

And so, I think it’s – I don’t think the direction of travel is especially clear on that one. I think there’s – if you look at the way that people are increasingly anxious about the world, if you look at the way that a lot of supply chains are bending and busting in some instances, there’s a sort of an impetus to see what people can do in a more resilient way in their own economies.

And AI might mean that more stuff can be done onshore rather than offshore. Amazing. Thank you so much.

Thanks Tash.