Interview with Kieran Gilbert, NewsDay, Sky News

Kieran Gilbert: Welcome back. We’ve got the Assistant Treasurer, Daniel Mulino. We’ve just had a lot of live pictures coming in from Beijing.

It’s a crucial summit. The whole world watching that, because whether it be Iran or trade or Taiwan or many other issues, there’s a lot at stake, including for Australia. Daniel Mulino: Yeah, exactly, Kieran.

It’s the 2 largest economies in the world, and for them to have a cooperative and productive relationship is a really positive thing. So, I hope good things come out of this. There was a major delegation that Donald Trump had there, Tim Cook, Elon Musk, the Chief of Nvidia, plus a whole heap of his cabinet as well.

They rolled out the red carpet for Trump. But there’s a big show of respect, reciprocal respect, by having such a massive US delegation there as well. Yeah.

And I think the kind of big corporates that you just outlined are an example of a lot of the economic, the depth of the economic relationship still between those countries. On the, let’s look at the Budget and the Budget reply. Do you negative gear property yourself?

You don’t? And you haven’t before? Oh, look, I think I might have a long, long time in the past, but not for very long.

Yeah. Because the thing is, I think a lot of people are saying if you’re knocking that opportunity off for a lot of younger Australians, is it fair that politicians do have that and have had that afforded to them over their careers and as they build wealth? Yeah, well, Kieran, the 2 things I’d say is, so if anybody in the current generation wants to negative gear, they can still do it in new builds.

So, what we’re saying is we want negative gearing going forward to be supporting new construction as much as possible. But the other thing is we’re looking at a tax package including negative gearing, CGT and the reforms on trusts that is going to open up the housing market for younger people in particular. And there’s this 75,000 switch between investor owners going to owner‑occupied over the course of the medium term.

That’s the net effect when it comes to the composition of the housing market, that’s a huge change. Does it open up, does it, does it open up options or does it soften the market? Because you look at, I mean, just one barometer we saw yesterday, CommBank shares down 10 per cent.

Oh, well, look, I’d never want to comment on, you know, one day stock market moves. There can be all sorts of things going on there. But look what I – A lot of analysts think it’s because they will be doing less in terms of home loans, and it’s going to take heat out of the property market.

So, the banks cop it. Yeah. I mean, look, I think really with very short‑term movements in the stock market, there’s all sorts of contested views around that.

But what the Treasury analysis shows is that over the medium term, what’s going to happen in the housing market as a result of our changes, is that the estimate is that 75,000 homes will move from investor‑owned and that the people buying those will be people that in the past were renting. And this is exactly the kind of change that we want to see housing markets.

Do you think that stacks up? You’re a respected economist yourself, and you’ve studied these things, studied this a lot more than most. Is there a risk though, that it will take the heat out of the property market?

Well, and I think – We’ve had a boom for 25 years. Well, and this goes to the reason, part of the reason why we’re grandfathering. In that we don’t want the changes to be too disruptive overall.

So, grandfathering existing negatively geared properties means that there will be adjustments in the market, but it’s not going to be too disruptive. And so I think the Treasury modelling does stack up. It’s going to be positive in the medium term, the effects on house prices should be modest.

They’ll be growing still, is the forecast, but about 2 per cent less than previous growth rates. And as the Treasurer indicated in the Budget speech, but also at the Press Club address yesterday, if you look back over the last 20 years, house prices have grown way faster than incomes. And this is the underlying dynamic that is creating real barriers for younger generations to get in.

You’re not going to lose tech startups and other companies getting underway to Singapore and other places where there’s no capital gains tax. Is that a risk? So, that’s a very specific issue on the capital gains tax changes.

So, just going to the CGT. Will you deal with that? Yeah.

So, with the CGT changes, what we’re doing is changing it from a 50 per cent discount, which is arbitrary, frankly, and that means that it’s operating in a different way across asset classes and over time, to what it was originally, which is taxing people on their real gains. Now, the startup industry has validly raised a concern that often they have a very low or zero cost base.

So, when they look at gains, it will be coming off that very low base. So, we have indicated that we will consult with them to deal with what’s a very special case. On the Angus Taylor Budget reply.

He says he’s going to commit to capping a net overseas migration, have an update from the housing minister each year on housing completions, and then cap migration at that level. It might be difficult to deliver that, but people will think this makes sense because, quite frankly, the numbers have been, they have been too high post‑COVID, haven’t they? Well, look, net overseas migration numbers have come down 45 per cent under us and we’ve got further action on that front in the Budget.

But can I just say, Angus Taylor, I think, is going down a very dangerous path with not just the changes on net overseas migration, but this policy, and we’ll wait to see what’s announced, but this policy of saying he’s going to cut all benefits for permanent residents for people who aren’t citizens. I think what he seems to be doing is doubling down and doubling down again by taking a more and more divisive approach on these issues.

I live in a very multicultural electorate. I’m a migrant. I came here when I was one.

My dad came as an Italian, and then he worked for a decade as a permanent resident. He finished high school equivalence at night while working multiple jobs. He paid taxes.

He then became a nurse and contributed. I really worry about policies that start to demonise permanent residence in the way that it looks like tonight’s speech might. I think it’s really bad for our country.

Isn’t it an expectation, though, that he’s saying if you want to be a full, you know, recipient of things like pensions and whatever else, become a citizen? So, there’s already long waiting periods, so you have to wait 10 years to get the age pension, the disability support pension. You’ve got to wait multiple years for other benefits.

The worry I have is that, look, there are some people in Australia who are permanent residents who probably will take out their citizenship but haven’t done so at this point in time. My point is, what’s Angus Taylor trying to achieve by demonising this huge part of our population that contributes so much? I see this in my electorate all the time.

I saw it with my dad, who contributed as a nurse working for – To be fair to him, he’s praised the many permanent residents as well and the contribution migrants have made. I just want to clarify that he has done that. It’s not like he’s saying that they’re milking the system, but he’s saying that they, if you want to buy into the system, just become a citizen.

I worry about the political, and people use the term dog whistle. I don’t think this is even dog whistling frankly, I think this is really explicit now. On the one hand, you say you praise them.

On the other hand, you’re going to go into a Budget reply speech where one of your key so‑called positive policies going forward is slashing benefits for people. The implicit message is, is that they shouldn’t be getting any of these benefits, that they’re somehow rorting the system. That’s the implicit message.

And you can on the one hand say, oh look, I acknowledge or praise their benefits. I think that’s a bit disingenuous if you’re actually trying to use this for political ends. On, finally, before I let you go, he’s also talking about indexing the tax brackets.

So, indexing the tax rate so that we get rid of bracket creep. This will appeal to a lot of workers. Well, can I just flag firstly that this government has given benefits back through the tax system 5 times now.

We’ve had the stage 3 tax cuts reworked. We’ve had 2 tax cuts for all Australians, the $1,000 instant deduction and now we’ve got the WATO. And if you look at the average wage earner, they’ve got up to $2,800 back a year.

That’s substantial. Now I’ll look forward to seeing what the details are of Angus Taylor’s policy. But this government has already given substantial income tax benefits back.

It’s flagged that it’s open to doing. If Angus Taylor is going to go down a certain path, I hope that he fully costs it and is totally transparent with how it’s going to work. Assistant Treasurer Dan Mulino, I did say it was finally.

But have you got any thoughts on that ruling against Coles? I haven’t actually had a chance to look at it closely. But look, can I just say it’s part of a broader agenda of holding corporates to account.

I think it’s really positive that this case was brought. I think companies have to be very transparent in the messaging they use. Again, I’ll look at the case clearly, but I think it’s really positive that this is being examined closely by the courts.

Thank you. We’ll talk to you next week. Thanks, Kieran.