The Albanese Government’s Budget has been in trouble from the moment it was handed down.
There was widespread concern about its changes to capital gains tax and negative gearing. These changes were, of course, a direct contradiction of pre-election promises.
Initially, Prime Minister Anthony Albanese and Treasurer Jim Chalmers were unmoved. Then they went into attack mode. There were claims of scare campaigns and “a lot of lies” and “beat ups”. Finally, last week came some backdowns, including allowing more small businesses to use capital gains tax exemptions and a proposed carve-out for “innovative businesses”, and the range of discretionary powers handed to the Treasurer to make future tweaks was narrowed.
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Junior miners and exploration companies have argued the changes will still leave them, the “original start-ups”, out in the cold. That argument remains unresolved. Nevertheless the Government pushed on with horse-trading with the Greens to get passage of the first part of its tax legislation through the Senate.
On Tuesday the Government and the Greens cut a deal. The Greens agreed to support changes to the capital gains tax discount and negative gearing in exchange for Labor limiting self-managed superannuation funds from buying residential property, as well as extending the inquiry into the National Disability Insurance Scheme — which will delay to at least August the NDIS cuts the Government had sought to pass this fortnight.
The Government has also agreed to make amendments the Greens say will “firewall” some areas of the scheme from further cuts.
Such is the extent of the Greens’ opposition to the NDIS cuts that even after extracting the concession to extend the inquiry, Greens leader Larissa Waters vowed to keep fighting in a bid to prevent the Bill from passing — meaning the Government will still have to turn to the Coalition to ultimately pass the changes.
Senator Waters said that the Greens were disappointed the Budget tax bills would grandfather the changes for existing property investors rather than go even harder at “tax perks for the very wealthy”.
The complaint gives an insight into the thinking which Labor has been happy to deal with. Shadow treasurer Tim Wilson said it looked like Labor had lost control of its Budget. He labelled the deal with the Greens dodgy and dangerous, while Liberal leader Angus Taylor said it was “rotten legislation”.
The Greens’ NDIS roadblock has delayed legislation that is crucial to the Government’s claim it can make major savings from reforming the scheme. Under changes unveiled ahead of the Budget by Health Minister Mark Butler, an overhaul of the NDIS program was aimed at saving $37.8 billion over the next four years.
The savings are a major contributor to the Government’s Budget spending strategy. On Tuesday Mr Butler played down the delay caused by the extended NDIS inquiry, saying it would cost “a few hundred million dollars” and argued the changes that yield major savings were not meant to start until October in any case.
That all remains to be seen.
Meanwhile the dangers of getting into bed with the Greens remain clear.
