Treasurer Jim Chalmers has batted away accusations he has granted himself unusual powers in the legislation overhauling the capital gains tax and negative gearing.
Critics have lashed the breadth of Mr Chalmers’ ministerial discretion over the reforms, including the final say over which asset classes will be hit by new CGT rules, as well as the definition of new builds central to the negative gearing changes, in a report published by The Australian. But Mr Chalmers, when asked if he was “playing God” when it came to the new policies, said: “Of course not.”
He insisted the backlash was “another beat-up” from those aggrieved by the government’s ambitious tax overhaul. “We made it really clear in the budget papers that when it comes to new builds, people who are investing in new builds can decide between the two different kinds of discount,” he told Channel 9 on Tuesday.
“We made that clear, and we said that would be settled in the usual way, and that’s what’s happening.”
“So, you will have ministerial discretion on that, though, only to the extent that we determine the legislative instrument. That’s disallowable by the parliament if the parliament doesn’t like it.” Mr Chalmers insisted tax law was “full of these kinds of examples”.
Labor’s tax package was introduced to parliament last week and will now be examined by the Senate Economics Legislation Committee. The inquiry is set to end on June 22, setting up a small window for the legislation to be passed by the upper house before the first winter sitting session ends on July 2. Labor will be relying on the Greens to pass the laws through parliament after the Coalition ruled out support for the changes.
The CGT reform, which scraps the 50 per cent discount in favour of an inflation indexed model, sparked severe backlash from the small business sector for applying indiscriminately to all asset classes. The government now remains in consultation for potential carve-outs, but none have been finalised, meaning any exclusions to the new rules will be codified through additional legislation.
