Andrew Charlton faces fierce grilling over Labor’s controversial budget

Added: 2026-05-25

[00:00:00]Well, joining me live now, cabinet secretary and assistant science, technology, and digital economy minister Andrew Charlton.

[00:00:06]Thanks for your time. Good to be with you. What do you make of this latest suggestion we might have a ceasefire in Iran?

[00:00:14]Well, the Australian government has long been calling for a de-escalation in Iran. We've been calling for outstanding issues to be negotiated. And that's because we know that the longer this crisis goes on, the bigger the impact it will have on the global economy. And Australia is not immune from those global economic impacts. In fact, Australians have been feeling those effects at the petrol pump since the crisis began. What could that do for the economy if the war were to end now? Like, how much of a sigh of relief would there be or would there still be a a long tail?

[00:00:49]Well, look, there are still a range of issues to work through. Getting some of these production facilities up and running takes a lot of time. And that's why the sooner this crisis is over, the quicker we can get around the resolution of some of those long-standing issues, and the quicker we can get the economy back to working in a way that delivers fuel for Australians, and people will feel that at the petrol pump.

[00:01:11]All right, I'm going to play you now what you said on the Nine Network on Friday on the Today show about the capital gains tax changes in the budget.

[00:01:18]The point that many small businesses have been making is valid. It's a valid point because that new regime doesn't interact well if you have a really low capital base cuz you've got nothing to inflate off. So, there are real concerns out there. The government recognized those concerns. The Treasurer recognized them before the budget. There was a statement in the budget recognizing them, and we are consulting on them.

[00:01:38]We love honesty from politicians.

[00:01:40]Now, how could Jim Chalmers and the government release a budget which said, "Oh, here's what we're doing, but don't worry, we'll consult the startups about the final detail later." Did someone just remember startups in the last week?

[00:01:53]Well, I'll get to that question, but let me just take a step back and look at the bigger picture of this budget. You know, this budget addresses a big problem in the Australian economy.

[00:02:02]And that problem is that we have a huge amount of investment going in to real estate, existing property. And that investment is pushing up prices, it's pushing out new home buyers, and it's starving other productive parts of the economy of investment. And our tax system was making that problem worse.

[00:02:22]Okay, what about this question? So, this budget tackles that problem. We limit negative gearing to new homes to expand housing supply for new home buyers. And to get to your question on CGT, it deals with the long-standing challenge we've had in CGT, which is that the old CGT regime of a 50% discount provided a very blunt instrument, which massively overcompensated some assets, and and taxed way too harshly other assets. But shouldn't you consult before the budget, before you announce such measures? Not put Oh, here are the measures, but we're going to go out and consult now.

[00:03:00]Look, it's a very normal process in any budget that after you implement a budget, particularly a budget that has big reforms like this, that you go and consult with industry on the implementation of those reforms. And the government has said that we will be doing that, particularly in relation to startups, because of the issue that Jim Chalmers identified in the budget and has been consulting on since. When did he identify you reckon? Like in the week before the budget? Last couple of weeks?

[00:03:26]Oh, no, what about startups?

[00:03:28]Well, look, this is a long process putting together a budget. It is extremely normal for a budget to come out and for the government to be consulting with different industries on the implementation of that budget. And that is exactly >> know. I've covered a lot of budgets. I can't remember a line like this in the budget before. Oh, by the way, we got to consult on this as well. Here's our policy, but we've got to go and consult on it.

[00:03:49]I strongly disagree with that. Almost every big reform has issues and I've seen a few big reforms in my time, Andrew.

[00:03:56]>> in a budget. Anyway, look, let's let's agree to disagree. Wouldn't it have been easier to go with the Bill Shorten policy of reducing the capital gains tax discount when some businesses start with zero value and can't claim indexation.

[00:04:08]So, go for the 25% you know, discount, not 50%. Why wouldn't the government go with that model? Because that wouldn't have addressed the fundamental problem in the capital gains tax system. And that problem is that if you are, for example, holding an asset for a long time, you are suffering a lot of inflation. And the model that you're describing does nothing about that. It doesn't encourage people to invest in long-term productive assets. Why? Because they're going to experience a huge amount of inflation that they won't be compensated for. In fact, under your model, they'll be compensated even less. Under the government's new model >> stuffs people one way or the other, aren't Incorrect. There are a lot of people who will be better off under the new model.

[00:04:48]>> More people than under that change?

[00:04:50]Well, it will depend on the on the circumstances, but I reckon there'll be a lot of people who'll be better off, particularly people who we want to encourage to invest in long-term productive assets.

[00:04:59]>> Do you accept >> That is a good thing for the economy and it is a good thing for Australia.

[00:05:03]>> Do you accept many people will leave the country and set up businesses offshore, particularly in the startup space, and that will take jobs and investment offshore because it's not a competitive tax rate compared to other countries?

[00:05:14]Look, I have seen these comparisons between Australia's capital gains tax and foreign capital gains tax regimes, and those comparisons are not valid. And here's the reason, because Australia is moving to a model of capital gains tax that is based on taxing the real gain.

[00:05:30]So, you can't compare the tax rate on a real gain in Australia with the tax rate on a nominal gain in another country.

[00:05:36]That is not apples for apples. They are fundamentally different. In many cases, our regime will be more generous to assets who have experienced a lot of inflation over a long period of time and that is not compensated for in the regimes of other countries.

[00:05:51]>> is about addressing the price of property, why does this change have to occur on business and shares as well as property? Because because the root problem that you and I have been discussing for the last 2 minutes is a problem across every single asset class. It is not just in property.

[00:06:07]If you are in shares, if you if you have purchased a business, you have the same problem that the old scheme was a very blunt instrument which harsh >> it as about property. I mean that's his sell as he gets emotional there the PM the whole time.

[00:06:20]It's about it's about property. I mean to me I don't think it's you know, I think it's a little bit about property.

[00:06:25]I think it's mostly about Jim Chalmers wants more tax frankly. He wants better revenue for his budget. That's what it looks like. That's what people out in the suburbs are saying. I can tell you.

[00:06:34]No, this is about addressing the biggest challenges in our economy right now. You are right that one of those challenges is housing and this budget addresses housing by limiting negative gearing to new builds so we can have more housing for young Australians, by fixing the capital gains tax system so we're not too generous on detached houses as we have been in the past but punitive on on other assets and in doing so you lift the productivity of the whole economy by encouraging more investment into productive assets.

[00:07:01]>> taxing Australians by more than a hundred billion dollars over 10 years more.

[00:07:06]Because that's what the changes do.

[00:07:09]No, what these >> So that's a tax grab, isn't it? No, what these changes do is make the capital gains tax system fairer across all asset classes. By taxing Australians more. Do you concede that?

[00:07:20]>> Some people will pay less, some people will pay more. But >> tax take is more. But overall every single asset class will be better off because you are taxed across the board evenly on the real gains you make and we're not encouraging short-term speculation or any other of the things that was previously very generously dealt with under the old capital gains tax regime.

[00:07:44]>> Generously including to you, Andrew Charlton. So, you've had a startup.

[00:07:48]People reckon you made as much as 50 million bucks out of selling that startup.

[00:07:53]Makes me wonder what you're sitting here at this desk for, really. But presumably you paid about 25% tax on that. How would you have felt if you'd paid 50%?

[00:08:03]Well, you are right, Andrew. I have had a range of different assets in in my life. I have started a business. I've that business. I've sold that business.

[00:08:11]I've owned property. I have had dealings and owned many of the assets that we're talking about. And that is why I can tell you with some authority that I think these tax changes are good. I have owned assets that would be more generously treated under the new regime, and I have owned assets that would be less generously >> the big asset that you made all the money out of, right champ?

[00:08:33]And across the board Across the board, I can tell you that across the assets that I have owned this is a fairer system. I would have lost out of some, gained out of others, but overall it is a fairer system, and I say that with some experience. Wouldn't you have considered moving offshore? If If you had that startup, which you built from nothing, you started with zero. You know, so I don't think you had the indexation sort of relief there available.

[00:08:58]And a government came in and said, "We're taking that 50% disk discount clean off. You're going to You know, the joke in the memes is Anthony Albanese owns 47% of the business." Would you considered moving on moving offshore if if you'd been in that situation as a startup founder?

[00:09:13]No, because those comparisons are not relevant for the reason that we just discussed. We are taxing the real gains, not the nominal gains. So, any comparison with a foreign country that has a nominal tax rate on CGT doesn't isn't valid. It's apples and oranges. It's a completely different situation. What this model does is we move to taxing the real gains, equalizing it across every asset, giving people protection against inflation if they are holding that asset for a long time. It is a better and fairer system.

[00:09:43]So, the government is consulting startups. And I've reported there may even be movement when it comes to the CGT on small business.

[00:09:50]Can you tell me what changes might be considered?

[00:09:54]Well, the government, as you say, is consulting after the budget in the normal way that a government would consult after any budget, particularly a budget where there is a lot of reforms.

[00:10:04]I think we should let that consultation process, which is being led by the treasurer and the treasury go through the normal process. The treasurer has explained why that consultation is important because he values startups. He thinks that startups have a important role in our economy.

[00:10:20]And as he has said, he wants those startups to play a bigger role. So, that's the focus of that of that consultation.

[00:10:26]>> what you could give them though. I mean, could you make them exempt from the axing the discount? I don't know what else you could what your options are.

[00:10:34]Well, let's wait and see. That's the exact That's the exact purpose of this consultation process.

[00:10:39]>> Well, who is the government consulting exactly? Well, the treasury is leading this consultation process. They're working through it as you would expect.

[00:10:46]It's being led by the treasurer. I'm sure they're consulting a wide range of people in the normal way. Founders or just peak bodies? Look, I'm sure they're consulting a range of people. The treasury always does a comprehensive consultation process after a budget. And this process will be no different to that. Can you see why some small business people are upset with these changes? Again, that situation where you start with nothing. So, you don't have that indexation you can claim off the business unless, as you say, you've had the business a long time.

[00:11:17]Well, look, I want to say how important small business is in our economy. Small businesses really are the backbone of the Australian economy. And I don't say that glibly. I say that because Australian small businesses employ more than half of all Australians. I say that because I was a small business person myself and I understand the challenges that those small businesses have.

[00:11:38]But what I would say to you, Andrew, is that there is a lot in this budget for small businesses. Think about making the instant asset write-off permanent. Think about the tax cuts for sole traders.

[00:11:47]Think about the advantages in the reforms to R&D. Think about the expansion of venture capital. All of these things will make real big differences to small business and that's the message that we're getting out there as we talk to small businesses and consult with them. On trust, are you confident people won't be caught up with their inheritance here and how can you assure Australians of that? And what changes are being considered there, if any? Well, there has been no intent to increase taxes on inheritance and there is no need for any taxes to be increased on inheritance. Uh we have excluded uh any existing trust that has been grandfathered uh and there are a range of alternatives going forward that people can use uh in that situation. So, the end result is people will stop setting up trusts in Australia or as many people won't, surely.

[00:12:37]Out of this out of these changes. I don't think that's true at all. Trusts have a lot of legitimate purposes and people will continue to use those trusts for those purposes. That includes asset protection, uh it includes inheritance, it includes support for minors in a range of different different situations. Uh trusts play that important role in our economy and I think people value that role the government supports those roles going forward. Do you have a trust? I do, yeah.

[00:13:04]I As I said, I've had a range of >> to minimize your tax?

[00:13:08]I Let me Let me answer your question. I have had a range of these assets in my life. I have had I have had trusts, I have had property, I have had a business and the point of all of those things has been to make sure that in my business world we operate in the most efficient way possible. And to minimize your tax, right?

[00:13:29]No, I I completely reject >> saying that no part of you setting up trusts was about you paying less tax?

[00:13:36]What I'm saying is that trusts are used for a range of different purposes. The primary purpose is asset protection.

[00:13:43]That is the reason why people have trusts.

[00:13:45]>> tax >> Yeah. Listen to me. I set up a business.

[00:13:48]Like many Australians who set up a business, this is what they do. They walk into their accountant, they tell them that they're setting up a business, and their accountant says, "Great.

[00:13:56]Here's your PTY LTD company, and here is the trust that goes with that."

[00:14:00]Extremely standard process for many Australians setting up a business. The purpose of that is not for uh tax reduction. The purpose of that is for asset protection. That was the reason that I set up the trust, and that was the reason that many small business people set up a trust. But that's the tax reduction comes with it. Do you concede that? You pay less tax because of it.

[00:14:21]No, not necessarily. The primary purpose is for asset protection. To the extent that there has been situations where people have paid less tax, that's precisely why these reforms are are important. That's what these reforms are doing. That's why the government has put in a 30% minimum tax.

[00:14:37]Do you think it was a crook system, the previous system around trusts and the ability for people to avoid tax that way?

[00:14:44]Look, I think trusts have a really legitimate role, and people are getting them for precisely the reason I just described. That is for asset protection.

[00:14:51]It is It is to support them in the way that they structure their affairs. That is legitimate. I do not criticize any Australian for setting up a trust within the rules, and doing whatever they did within those rules. They are completely entitled to do that. But what the government has said on trusts is that we are moving to a system that we believe is fairer, and that system is one that provides a minimum 30% tax on trusts. We think that makes the whole system fairer, and continues to allow those positive aspects of trusts to be used by Australians.

[00:15:22]>> Will it affect you at all or not really because it's grandfathered?

[00:15:26]Look, in terms of my own affairs, everything you can everything you want to know about my own affairs are available for you to read on the register of politicians' interests.

[00:15:36]>> but >> That's available for everybody.

[00:15:38]>> does it affect you? Will it affect you the changes? Look, all of these all of these changes will have have impacts.

[00:15:45]The important thing for me is not whether it affects me, it's whether this is the right thing for Australia. And I'm telling you that this is the right thing for Australia. It addresses some of the big challenges in our economy.

[00:15:55]And I say with some experience that I think these are the right changes for Australia having dealt with many of these assets over the course of my life.

[00:16:03]Because your old friend Malcolm Harris used to work with him in the Kevin Rudd's office, he doesn't support them.

[00:16:07]What did you make of his comments?

[00:16:09]Well, a range of people will have different views out there. My job is to explain to people why I think these changes address real challenges in the Australian economy. And I think they are going to make make our economy stronger and fairer and ultimately improve our rate of productivity and economic growth. That's what I believe these changes will do and that's what I'm out there explaining to the people that I know. Let's talk about this RedBridge Accent Research poll now. Could you see One Nation winning more than 50 seats in this country?

[00:16:39]Look, it's clear that One Nation's vote has been rising in the polls. There's no denying that and that's a phenomenon that we've seen all around the world.

[00:16:48]For me, the challenge with One Nation is they are very good at pointing out grievances. They are much less good at providing solutions. And particularly, they're not good at providing solutions that help Australian families and Australian workers. Every opportunity they get, Andrew, they vote against things that will benefit Australian families and workers. They voted against same job, same pay. They voted against wage rises. They didn't support cost of living increases. You know, One Nation every single time they face a choice between battlers and billionaires, they choose the billionaires.

[00:17:22]I don't think this is a party which is on the side of everyday Australians, and I think ultimately people will see through the grievance and notice that they don't have the real solutions to their problems.

[00:17:32]>> it just feels to me when one of the difficulties you have politically is when you put them down like that, and it does sound like you're putting them down.

[00:17:39]The voters who are who are viewing this sort of think you're putting them down. Is isn't that a difficulty politically with you dealing with the One Nation phenomenon?

[00:17:48]On the contrary, what I'm what I'm saying is One Nation is expressing the grievances that people have, but they're not providing the solutions that those people need to those grievances. Do you fear Labor losing seats to One Nation?

[00:18:01]Look, we'll have to see what happens between now and the next election, but clearly the best strategy for Labor is to present real solutions to people.

[00:18:10]It's to show them that we are actually tackling the problems that they face in their day-to-day lives. And this budget is part of that. This budget is addressing the real problem that we have in housing affordability, the real problem of young Australians not being able to get into the housing market, the real problem of the disincentives we have to long-term productive investment.

[00:18:30]This is precisely the kind of thing that Labor does in order to address our real problems with real solutions rather than just talk up grievance in the community.