Senate Economics Legislation Committee, , 9:15:29 to 9:23:03
Review of revenue projections for various tax reform measures including CGT and trust changes over the medium term.
Topics: Government spending, Infrastructure
Speakers: Dr Shane Johnson, Senator Jacinta Nampijinpa Price, Laura Berger-Thomson, Jill Kitto, Unknown Speaker, Senator Nick McKim
I appreciate you coming back in such a timely way.
I'll try to be quick noting that it is dinner break. I just wanted to ask how much revenue did Treasury expect to raise from the overall budget with the CGT, negative gearing, trusts, changes, housing and everything else, I suppose. In terms of tax hikes.
That's all outlined in the budget papers. So in budget paper, sorry. You can get all the individual measures in budget paper two. We also have a table in budget paper four. I think it's the very end of the document. So it's uh it's um on table 4.3 in budget statement 4 in budget paper one on page 186. Um it goes through and has the uh the the impacts of the government's uh tax reforms. Um the total impact over the forward estimates is uh is an increase of 95 million dollars.
How much is that over the medium term?
Uh I don't uh actually over the medium term. So that is also available in the budget paper? I think from memory it's in the fiscal section. I think it's in this first box in the fiscal section, spare me a second. Um so the tax package, um it's in uh budget statement three, the fiscal strategy and outlook in budget paper number one. It's uh detailed in box 3.2. Um it notes that the tax package over time improves the underlying cash balance by 77.2 billion from 2526 to uh to uh 2036-37.
And so what is that figure now after um carve-outs?
Um I don't have that estimate. I don't have that uh that that we're working through those as part of that budget, the uh updated budget with the Mayfo process.
Okay. Um how's the reduction in activity and confidence since the budget affected these estimates?
Um that that'll be something that we will have a look at as part of the budget update.
And just to be clear, uh note previously, Mr. Marco, you said that primary production is excluded from the government's trust tax changes, but lots of farms generate mixed income, and so presumably it will still get caught up by the trust changes. So does that mean there will be farms that will be impacted regardless of the carve out?
I'm happy to take that one. Um as you've described, um primary production income is excluded from the minimum tax. Recognising um that uh some trusts that earn primary production income are also have have other income. Uh the government has um announced that there will be um a special uh um rollover measure for trusts with primary production income where they can um roll over part of the assets in that trust to other um structures that retain the primary production income generating assets within that trust.
So that doesn't rule out though whether there will be there will still be some farms that will be captured. Um fundamentally what you're saying is that during the restructuring process they have an opportunity to ensure that they are not captured
I'm not sure that I quite said that. Um but I did say that the government has uh made an announcement. And it's pretty sure it's in the legislation. I'm just looking at my colleague. That the that the rollover relief it will be a bit different for trusts that earn primary production income to allow them to retain the primary production assets within a trust where it will not be subject to, where that income will not be subject to the minimum tax, and to kind of you know have a have other structures available for the non-primary So what about a grape grower that makes some wine?
Could they possibly be captured still?
Jill Kitto, Assistant Secretary, Individuals Indirect Tax and Superannuation Division Trust Tax Branch. So under the uh announced measure, primary production income is exempt from the minimum tax on discretionary trust distributions. And by that business, that would still be subject to the minimum tax.
So yeah, they still captured okay. Well that's interesting. Um there I will be will uh ultimately there will be farms that will be um captured. Sounds complicated for many farmers, I think. The whole thing sounds quite complicated. Can I just quickly go back to the seventy-seven billion figure that includes um tax cuts as well? What is the figure for the tax heights alone?
I don't have that, sorry, Senator. I think we may have no. So I think um of the two measures of the capital gains taxes and the um capital gains tax and the uh the um uh the housing package, I think we released those under FOI. Um at one point. Yeah, I might have to take that on over, so I can't find it quickly for you. Sorry. Uh actually thank you. So we so we did release it on so it's the tax reform. So the um the fair tax system for workers, home buyers, and future generations. Um we did release that under an FOI. Um, and that's around just over 43 billion from those from those two particular measures. That's the forward estimates and the um, 42 billion. Around 40, say 44 billion, roughly.