One year isn’t enough – why the government needs to keep up the pace of economic reform

It has been a year since the federal government convened its economic reform roundtable – the culmination of a process that flung the doors open on the reforms needed to drive a more prosperous Australia.

The roundtable followed a flurry of activity: almost 900 submissions, 75 meetings with chief executives and industry leaders, and 41 ministerial roundtables asking for ideas to improve productivity, build economic resilience, and strengthen the budget.

With a strong election win behind it, the Albanese government was in the rare position of being able to think beyond the three-year election cycle.

It even opened the door to a discussion of tax reform, which had seemed an impossible dream for economists and policy makers since the turn of the century – a “third rail” that neither major party was willing to touch .

When I addressed the roundtable on that topic, my message was that Australians need a tax system that is helping us, not hindering us, to adapt to a changing world.

The longer we put off reform, the more ill-fitting our tax system is going to be for the future we face and the harder the reform task will get.

So, how much has the government achieved in the intervening year? Some progress, despite ample distraction At the roundtable, we grappled with income taxes, company taxes, the GST, and pricing carbon and road use: all difficult policy choices.

And, as this year has shown, there will always be shocks and disruptions that pull our attention away from reform, whether they be geopolitical conflicts , or runaway AI agents.

On the final day of the roundtable, focused on the budget and tax, the clearest area of consensus was the intergenerational burden imposed by our current choices.

There was a shared sense we had to rebalance a tax system that was distorting the housing market and where wealthy, older Australians receive more favourable tax treatment than working-age salary earners .

It’s no surprise then in listing his achievements this week, Treasurer Jim Chalmers put the capital gains and trusts reform package at the top of the list.

These reforms will replace the previous 50% capital gains tax discount with a discount based on inflation, restrict negative gearing to new properties only, and set a minimum 30% tax rate on income from capital gains and trust income.

Some people pushed the panic button , suggesting these changes would tank property prices and punish savings.

The government has cut some red tape in the building code as part of its reforms.