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Chapter 1: What is the main topic discussed in this episode?
A Listener Production.
Hey, it's Chris Spear with you. Welcome to The Briefing. There's been a lot of noise over the last month about the government's proposed changes to the capital gains tax concession. It's made it hard to work out who to listen to. So what does someone focused on just the facts think?
Why should someone who earns, say, $120,000 in capital gains pay less tax on that $120,000 than someone who's earned $120,000 in wages or salaries? And that raises, I think, some important points of equity or fairness.
A chat with an independent economist who fronted the Senate inquiry into proposed CGT reform is coming up in the second half of this episode. Firstly, let's get into the headlines with Sasha Barber-Gatt on Wednesday the 17th of June.
Chapter 2: What changes are proposed for the capital gains tax?
Hey, Chris, we are being warned interest rate pain could still persist this year, even as the Reserve Bank handed us a reprieve. The official cash rate was left on hold yesterday at 4.35% after three consecutive hikes to start the year. Governor Michelle Bullock making it clear, though, that future increases remain on the table.
I want to be very clear that inflation remains too high. Leaving rates on hold today will allow the board to assess how these previous increases are flowing through the economy.
She did also mention how the deal to end the war between the US and Iran could play out here.
If the conflict does end and the Strait of Hormuz is reopened, this should support the flow of commodities and lower prices. But this could take some time and an orderly resolution is still not assured, meaning there are still upside risks to inflation and downside risks to growth.
Economists vary when it comes to their predictions for the rest of the year. NAB's forecasting rates will stay on hold for the rest of 2026 before we start seeing cuts in the new year.
But economists at KPMG and Oxford Economics Australia say more hikes will be needed as the flow-on effects from the Iran war continue to hit us here, with higher oil and fertiliser prices to drive up food and transport costs for some time to come. They're not predicting cuts to start until the end of 2027.
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Chapter 3: How will the capital gains tax reforms affect different income earners?
Australia's most decorated living soldier, Ben Robert Smith, has been cleared to cross state lines to attend the official opening of the Anzac Hall at the Australian War Memorial in Canberra. The 47-year-old appeared in court in Sydney yesterday where his team applied for a change in bail conditions so he could attend next week's opening as well as other ceremonial and social events.
Robert Smith was arrested in April and charged with murdering or ordering the murders of five unarmed detainees during deployments in Afghanistan between 2009 and 2012. He was released on bail and a condition of that is that he can't leave his home state of Queensland except for legal or medical appointments.
Now, a judge yesterday altered that to allow him to attend the Anzac Hall opening alongside other living Victoria Cross recipients who have also been invited, but on the condition he does not discuss his ongoing criminal case.
He also applied to attend an army recruit graduation in New South Wales to support a family friend. Now, that was knocked back, the judge noting the event will be live-streamed and flagging the risk of him crossing paths with another alleged war criminal who will be there. Ben Robert Smith has not entered pleas in his criminal case but says he'll use the trial to clear his name.
For the very first time in her three decades in politics, Pauline Hanson will today address the National Press Club in Canberra. The One Nation leader is expected to lay out her party's broader policy agenda, with analysts saying she'll need to perform well today to convince voters still on the fence.
Now, consistent polling has One Nation as Australia's most popular political party, with multiple surveys putting Hanson even ahead of Anthony Albanese as preferred PM.
Labor are scared. The Prime Minister has had a wake-up call, especially with Buy the Liar Fund that we've put out. You've had over 60,000 Australians that have donated to that fund. These are people that possibly can least afford it, but they want to get rid of this Albanese Labor government, and they're supporting our fight to do that.
And look, we did quickly check just before we hit record, the Fire the Liar donations have now hit $4.4 million from 71,000 Aussies. It's insane to see just how quickly that has grown in such a short amount of time. Look, the address to the press club comes amid reports the party has been allocating shadow portfolios.
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Chapter 4: What are the implications of the Senate inquiry on CGT reforms?
So Barnaby Joyce is apparently being considered for some sort of shadow treasurer position and the newly elected MP David Farley, who won the Farrah by-election, He is being considered for agriculture, water and trade.
Now, I think what is happening here, these are reports out of The Australian, Pauline Hanson has consistently been outpolling the Coalition and the Coalition is the country's opposition because they represent the other half of the political spectrum.
But it's not really a fair make-up right now because at the moment, according to polls at least, One Nation is performing better than the Coalition with the Australian people. However... That has not been confirmed at an election and therefore there will be no changes to parliament. It seems like maybe a cheeky thing Pauline's doing to kind of say, well, we should be the opposition.
So I'm going to put in force some shadow treasurers and shadow opposition people.
Yeah, weird titles to assign them because, I mean, the Greens long, you know, they're a minor party, but they have spokesperson for X or spokesperson for Y. They don't have shadow anything. There's no shadow anything. That's, you know. Something that's reserved for, like you said, the opposition. It'll be very interesting to see how she performs today.
We know that Pauline off the cuff isn't the greatest speaker, like whether or not she can follow a speech. I don't know. She has spoken at public events, but what speech she puts forward today is... in front of the country's journalists will be very interesting.
Well, and don't forget that they are also going to ask her questions. And she has been kicking the ABC out of her events, and I'm sure there are going to be ABC journalists there lining up to ask her questions. So you're right, it's pretty pivotal, I think, for Pauline.
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Chapter 5: What are the arguments for and against the capital gains tax changes?
I think if she wants to be taken seriously more broadly... we know that the supporter base is there and that people are turning to One Nation. But there still seems to be this sense that the political elite, you know, the legacy media even to an extent, aren't really treating her as a real threat.
And if she can come up on this stage and present some good policy points and be measured and coherent, I mean, it might sway some more people in her favour.
Virgin Australia is facing increasing pressure to scrap its COVID travel credits policy as it prepares to pocket over $90 million worth on July 1. National Senator Bridget McKenzie has written to the airline criticising its decision to put an expiry date on the credits, which customers accepted instead of refunds during the pandemic to help keep the aviation industry afloat.
Now that date is just two weeks away with Virgin set to absorb all unused credits if they have not been used by June 30. In the letter, McKenzie labelled the move unconscionable, saying those credits aren't loyalty points but rather customers' actual money.
And it's not only that people have to book their trip by June 30. They also have to travel by then in order to use the credit. Despite the rising pressure, Virgin has issued a statement sticking by the deadline saying 90% of customers have accessed and used their travel credits and multiple reminders have been sent to those impacted. Let's say the math is mathing, right?
Let's say 90% of people have claimed and 10% haven't. That's still $90 million that you as an airline are pocketing that people have paid for.
And the whole reason that people accepted travel credits was because we were being threatened at the time that Australia's aviation industry was going to collapse. And fair, like it was pretty dire during COVID, I remember. And people were going, okay, well, yeah, we'll do the right thing. We want to keep our aviation industry afloat. We'll take the travel credits.
We'll travel further down the line. Interestingly, Qantas and Jetstar have already had to back down on similar policies over this because of there was such outcry. This isn't a new exposure. Like this was revealed by Virgin in its own company policies not that long ago, but still long enough that for them to not have caved yet is crazy. I don't understand how this is getting through
consumer watchdog laws and things like that. I actually don't understand how they're allowed to do this.
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Chapter 6: How does Pauline Hanson plan to address the National Press Club?
Anthony Albanese and Jim Chalmers are. And of course, back in those days, communicating with a large proportion of the Australian population was much easier because there were fewer media outlets. People used to watch the news, listen to the radio or read the newspapers. Whereas today,
and especially younger people get their news, if they're interested in it at all, from a much more fragmented range of media, in particular social media, and that just simply makes it harder to communicate a message than it was 25 and 40 years ago.
Look, Saul, as a final thought from you, let's say these reforms go to Parliament and pass without any changes. I know you've suggested three reforms to the package that would make it better, but let's just say they go as they are.
Chapter 7: What is the significance of Pauline Hanson's speech for her party?
What is your final assessment of these reforms? Do they represent a better way forward for Australia?
I believe that they do. In particular, I think that they will contribute to solving a problem that has been getting more critical in Australia every year almost for the last 35 years, which is... deteriorating housing affordability and declining home ownership. These changes are not going to solve the problem on their own.
They're not as important as increasing the supply of housing is to solving the housing affordability problem. But by reducing the demand for properties that we've already got from investors, they will make it easier for people aspiring to own their first home to achieve that goal.
Saul Eslake, thank you so much for joining us on The Briefing today.
Thank you for having me, Sasha. It's been a pleasure.
That was economist Saul Eslake speaking with me there. And that is all for this episode of The Briefing. Thanks so much for joining me and Chris. Before you go, we would love it if you could share this ep with someone you think might enjoy it or get something out of it. It's a really easy way you can support us here at The Briefing and everything we do. I'm Sasha Barbagat.
I'll catch you tomorrow morning.
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