Topics: Budget, Labor’s economic mismanagement

SHARRI MARKSON: For more budget analysis now, I'm joined by Liberal Senator Dave Sharma. Dave, thank you very much for your time. Is this a budget that has gone to war on aspiration?

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DAVE SHARMA: It's a complete assault on aspiration, Sharri. It's a destruction of the Australian dream. I can't overstate how harmful this is. I mean, the, the vehicles and the tax settings that Australians, including Anthony Albanese, have used now for decades to save and accumulate wealth and get ahead and move up, whether you're a teacher or a firefighter or a policeman or a tradie, um, they're being taken away. And the same vehicles that previous generations used to get a more comfortable standard of living, workers now, young people, will just have to rely on wage and salary income. I mean, that's, that's a gross injustice. This is making things harder for younger people and denying them the opportunities that their parents had.

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SHARRI MARKSON: Let's drill down specifically into the capital gains tax changes. I mean, I've just outlined how it'll punish the very people building businesses, taking risks, growing the economy, being self-sufficient. How damaging do you think these changes could be on our economy?

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DAVE SHARMA: I think very damaging. I mean, we will now have amongst the highest taxes on capital anywhere in the developed world. This is a tax on property, it's a tax on shares, it's a tax on ETFs, it's a tax on crypto, it's a tax on new businesses, small businesses and startups. Say you're a university student who has a casual job and you're putting money in an ETF or something with the idea of saving for a deposit, you're probably paying a very low rate of income tax, perhaps none at all, because you're under the tax-free threshold. But under this new regime, you're going to be paying at least 30% on any gains you make from that ETF or that those shareholdings. I mean, this is It's grossly unjust and it's a denial of aspiration and opportunity. How would you expect people to— why would you expect people to save and invest and build for the future if the tax treatment is so punitive?

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SHARRI MARKSON: Just furthering that example that you just gave, it could actually push more people into the higher tax bracket.

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DAVE SHARMA: It could as well. I mean, a capital gain is assessed as an income in the event— it's assessed as income in the year that it— comes about, and because you can no longer— you're no longer able to discount that capital gain, which is what the current system is. It goes straight— the full amount goes straight onto your income now, not a 50% amount, which could well push you into higher tax brackets. And I'd point out that this budget alone— I mean, there's a lot of talk about increasing taxes on assets and reducing it on incomes from the Treasurer. If you look at income tax receipts, they are growing year on year on year because of bracket creep. People, Australians are paying more income tax Income tax is set to be the largest share of tax receipts ever in recorded history next year.

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SHARRI MARKSON: Well, clearly we've spoken about this so much in this program for a couple of years now that there needs to be indexation of the tax brackets. Now, just to that point that the government's arguing all of this is needed to help young people get into the property market, they're saying that's why there's been this change since the election campaign a year ago. Do you actually think this helps young people get into the property market?

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DAVE SHARMA: It doesn't help them at all, Sharyn. This is one of the cruellest parts. I mean, ask yourself, how has increased tax on shares, on ETFs, on crypto, on small businesses— how does that create more houses? How does that help young people get into the property market? It doesn't. The government's own modelling, or Treasury's own modelling in the budget papers, predicts that these tax changes are going to result in 35,000 fewer homes being built because of the effect that this has on investment in new housing. The government's own budget papers again expects it will put upwards pressure on rent. So this isn't solving a housing crisis. This is just a straight tax grab from a government that spends too much money and is addicted to taking other people's money to pay for their own predilections.

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SHARRI MARKSON: I think, as I said, I think it's also a legacy exercise. Dave, will the Coalition promise to wind back these changes to negative gearing, CGT, and trusts?

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DAVE SHARMA: Well, we are opposed to these changes, and I'm certain we will be opposing legislation to introduce those changes. And I think, we will always be opposed to taxes that discourage aspiration, that discourage saving, that discourage investment.

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SHARRI MARKSON: But if you get to government. Would you wind them back?

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DAVE SHARMA: That is certainly my view. I mean, I don't speak on behalf of the entire opposition on these areas, but yes, it would be my view that we should wind these back because it's going to do immense harm. I mean, we're looking at a capital strike, going offshore, tipping the economy, which is already in a parlous state, into an even more parlous state. I mean, this is— these are dangerous economic times. And what this budget has done is make those times even more precarious.

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SHARRI MARKSON: I've spoken to a lot of people today about the budget, and a few are saying to me, well, look, Labor's going to get away with this because the Coalition is too weak. What's your response to this?

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DAVE SHARMA: I don't agree, and I think this, this makes, I think, starkly clear the choices Australians face. If you want to keep the Labor government in power, if the Labor government continues in power, then, they ruled out changes on negative gearing. They ruled out increases to the capital gains tax. They ruled out taxes on family trusts. They ruled out taxes on— increased taxes on superannuation. All of those promises have gone out the window. What will they be coming for next? And the only way you can prevent a continued high-taxing, high-spending Labor government is by changing that government and putting the Coalition in. I think, bluntly speaking and talking politically only here, I think this gives me great optimism because I think The choice has now been made very clear to Australians. What sort of economic future do they face? Do they face one of indebtedness and low growth and declining living standards and wage servitude under Labor? Or do they want a future of aspiration and vitality and ambition and entrepreneurship under the Coalition?

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SHARRI MARKSON: All right, Dave Sharma, appreciate your analysis.

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[ENDS]