KATINA CURTIS: Jim Chalmers and Ted O’Brien in roundtable boilover ahead of toughest topic of tax reform

It began with an argument with his shadow counterpart over government spending and finished with a list of 10 reform priorities for the Australian economy.

Treasurer Jim Chalmers fronted the Australian public on the results of Canberra’s economic roundtable following 29 hours of discussion, taking in 327 contributions from the productivity summit’s participants.

And despite a flare-up with Coalition rival Ted O’Brien on the final day, Dr Chalmers attested to the collegiate nature of the three-day event.

“I finished those three days more optimistic about the progress that we can make together than I was at the start,” he said during a press conference on Thursday evening.

“People came with their ideas. They came with a lot of goodwill, a lot of expertise, a lot of experience. And they provided their views to us in very generous ways.”

Chief among the ideas presented that the Government will pursue after they garnered broad consensus were faster Environmental Protection and Biodiversity Conservation changes, road user charges which may include a tax on EVs, making AI a national priority, and tax reform.

Dr Chalmers said Environment Minister Murray Watt would be charged with accelerating the EPBC legislation he is currently working on. The Nightly reported last week Senator Watt was expected to put legislation up before Christmas.

State Treasurers will meet on September 5 to consider options for road user charges.

Most surprising was a commitment to broad tax reform to address intergenerational inequity, better incentivise business investment and make the system simpler and more sustainable.

During the Thursday evening press conference, the Treasurer announced 10 “quick wins” out of the economic roundtable, which counted union heavyweights, business heavyweights and economic experts among its participants.

The wins included the abolition of more nuisance tariffs, reducing red tape in the National Construction Code, clearing a backlog of environmental approvals for new homes, improving regulation, road user charging and a focus on AI that included a plan for the Australian Public Service and a national capability plan.

He also nominated a handful of longer-term priorities alongside tax reform, including simplifying the trading system, working on a single national market, building more houses, better recognition of skills and education with a priority on building an adaptable workforce, and modernising Government services.

To the surprise of many, the whole exercise over the past three days has proven largely collegiate and full of goodwill, despite the earlier argument between Dr Chalmers and his shadow counterpart over government spending on the final day when the toughest topics were dealt with, to little agreement.

The boilover wasn’t exactly unexpected

Being locked in a room for the best part of 30 hours with no phones and no natural light will do that.

Being locked in a room for the best part of 30 hours with no phones and no natural light will do that.

Thursday’s heated exchange between the two politicians could have been described as made for cameras, except there weren’t any in the room.

It was foreshadowed by an op-ed Mr O’Brien wrote in the AFR that morning.

The Liberal laid out the same arguments in the room, sources said, claiming the deficit was $100 billion worse and spending $160 billion higher than if fiscal guardrails had been heeded.

Dr Chalmers replied that Mr O’Brien had his numbers wrong, the shadow treasurer hit back and voices were raised before the Treasurer moved the discussion on.

Outside the room, Mr O’Brien said that he had “set a test for the Treasurer today to stop the spending spree, which starts with the introduction of quantifiable fiscal rules”.

“There is a spending spree which is not sustainable. The Government has thrown away the rulebook. The Government needs to reintroduce rules to control spending, and I’m hopeful that the Treasurer might take that advice ,” he said at the end of the day.

The boilover wasn’t exactly unexpected.

ACTU secretary Sally McManus called it “a political exchange … that felt a bit like question time” and said the rest of those in the room thought it wasn’t the time or place.

“It was like, ‘Okay guys, like, you can do that in question time, the rest of us don’t get to do that’,’” she said.

“It was a bit of a backwards and forwards on that and two very different views about … whether or not you need to have (spending) rules.”

Nationals frontbencher Bridget McKenzie said it was understandable Mr O’Brien was expressing his frustration.

“We want the Government to use the great mandate that they’ve been given by the Australian public at the last election to do the tough reform,” she told Sky News.

But ultimately, it was two minutes out of 1720.

Over and over, on the record and off it, those walking out of the Cabinet room over the past three days have described the conversations as broadly collaborative and collegiate, even where consensus wasn’t reached.

“Goodwill” is the word repeatedly used.

“We are all doing our best to make this process a valuable one,” Ms Goldie said.

Even Mr O’Brien said he appreciated “the goodwill, good faith and good ideas that people came forward with”.

The ACTU and Tech Council have come to a semi-agreement to talk further about how creatives, journalists and academics can be compensated when AI uses their work.

“We are hopeful we can find a path forward on copyright that allows AI training to take place in Australia while also including appropriate protections for creators that make a living from their work,” Tech Council chief executive Damian Kassabgi said.

Despite Mr O’Brien’s fiery approach on Thursday morning, multiple people left the discussions the day before with the impression he had made the “right noises” about the Coalition’s willingness to back a much-needed overhaul of environmental approvals.

Ms McManus noted that people had been willing to be persuaded by evidence and give ground.

“I think the first couple of days, maybe some people were approaching it like they had to … guard against some secret plan,” she said.

“There is no secret plan, it’s people actually talking and listening to each other. And as the days have gone on, I think everyone’s understood that.

“We’ve had to also think about that, too – okay, maybe we don’t have to be opposing everything the employers say, or maybe we don’t need to speak every time they do this, because part of it too isn’t about the immediate outcome.”

Another person noted the conversations had been more free-flowing on Thursday, and continued in smaller groups during break times, after people got a feel for each other during the first two days, and drinks at the Lodge.

The toughest topic – tax reform – was saved until the final day when Dr Chalmers and the core group of 23 were raging against the fatigue.

Dr Chalmers launched the third day by urging attendees to continue the spirit of openness and willingness to try and understand different points of view that wound through the first two days.

But many ideas were thrown around, and little agreement reached.

“I think you can safely say that all the taxes have probably been mentioned by now … we’re looking at consumption taxes, income taxes, wealth taxes, property taxes,” ACOSS chief executive Cassandra Goldie said during the lunch break.

Grattan Institute chief executive Aruna Sathanapally told the roundtable that Australia could do much better at having a tax system that worked efficiently, fairly and was simple for people and businesses to comply with.

“The longer we wait, the more ill-fitting our tax system is going to be, and the harder this task gets,” she warned.

Another person said the group would probably never reach consensus on a single direction for tax reform.

However, Dr Chalmers certainly has no shortage of ideas to choose from.

“It’s a launchpad for collaborative work going forward,” was the verdict from Matthew Addison, the head of the Council of Small Business Organisations of Australia.

The Government showed its own willingness to give ground on spending midway through the process.

Health Minister Mark Butler’s surprise move to massively rein in the NDIS eligibility and further cut the growth rate of the ballooning scheme and Tanya Plibersek’s quiet announcement to end a five-year freeze on pension deeming rates both help the bottom line.

Dr Chalmers said that of the seven big pressures on the budget, five were related to the care economy, including the NDIS, and described the spending side of the budget as key.

“If you think about spending and you think about revenue, it’s really us recognising that when it comes to budget repair over the medium term, we know that it’s not just about pulling one lever and ignoring the others,” he said.

Productivity Commissioner Danielle Wood warned in her pre-roundtable speech at the National Press Club on Monday that there were no more big silver-bullet, dollar-floating fixes to boost productivity and growth.

What would be needed now was a less exciting, “everything everywhere all at once” approach.

And so it seems with the directions likely to emerge from the three days of talks.

A pause on updates to the thousands of pages of construction rules, better data sharing between governments and agencies, easier recognition of migrants’ qualifications – important stuff, but hardly headline-grabbing.