The Treasury has accidentally released advice it gave to the Albanese government shortly after it was re-elected, where it pushes for higher taxes to fix the federal Budget deficit.
In an extraordinary blunder, bureaucrats mistakenly released parts of a secret briefing document given to the incoming government in response to an ABC Freedom of Information request.
In the briefing notes, officials told Treasurer Jim Chalmers that ‘tax should be raised as part of broader tax reform’ in order for the federal budget to remain ‘sustainable’ as Treasury forecasts years of Budget deficits.
The officials suggested the government ‘build on’ its superannuation tax and raise ‘indirect taxes’, such as those on alcohol and tobacco, with personal income taxes now making up more than half of commonwealth revenue.
The document also shows officials bluntly told Labor that the party’s pledge to build 1.2million homes over five years in response to the housing crisis ‘will not be met’.
Government departments traditionally compile briefs for both major parties on how to enact their key election promises.
Journalists often request a copy of the briefing through an FOI request but will typically receive a heavily redacted form of it. While the document obtained by the ABC featured the typical redactions, the Treasury failed to black-out sensitive headings and subheadings, disclosing the secret information.
Treasury officials pleaded with journalists to destroy the document, but the ABC divulged its contents in a report on Monday.
Secret advice offered by the independent Treasury to Labor Treasurer Jim Chalmers (pictured) has been leaked
Other notes included a call for Chalmers to find ‘additional revenue and spending reductions’ and consider raising ‘indirect taxes’ and superannuation tax.
The advice stated: ‘Improvements to the budget will need to come from economic growth, additional revenue and spending reductions.’
Chalmers appears to have taken the Treasury’s advice to heart with a roundtable scheduled in August set to discuss tax changes to address Australia’s flagging productivity and weak economic growth.
But the Treasurer downplayed the prospect of raising taxes and said those documents were not meant to be made public.
‘What’s happened here is a Treasury official has sent those documents in error,’ he told reporters in Canberra on Monday.
‘That sort of thing happens from time to time – I’m pretty relaxed about it to be honest because of course Treasury provides advice for incoming governments and no government typically goes into the detail.’
Chalmers admitted Labor’s pledge to build 240,000 homes a year until 2029 would be difficult to achieve, after immigration hit record-high levels in 2023.
‘We’ve already made it really clear that we will need to do more to meet out housing targets,’ he said.
Labor is also in negotiations with the Greens about its proposal to double the earnings tax on super balances above $3million, jumping from 15 per cent to 30 per cent.
Retirement savings above this threshold would include a new 15 per cent tax on unrealised gains, or the notional value of assets in a self-managed super fund before they are sold.
Other notes included a call for Chalmers to find ‘additional revenue and spending reductions’ and consider raising ‘indirect taxes’ and superannuation tax (the Treasurer is pictured with his wife Laura)
This would add to the existing 15 per cent tax on earnings during the accumulation phase of super for those who are still working.
In another heading, the Treasury advised Labor to lower taxes on individuals ‘to increase workforce participation and give workers a fair go’.
It suggested the same for company incomes in order to ‘modernise’ the existing taxes to boost investment.
A majority of 51.7 per cent of the federal government’s revenue is expected to come from personal income taxes in 2025-26, putting pressure on Australians of working age as the population ages.
While Labor delivered two consecutive surpluses, as a result of company tax revenue from higher iron ore prices, Treasury is only forecasting deficits in coming years.
Chalmers has previously suggested he would consider calls to raise the GST from the existing 10 per cent level, to raise more money for the states and territories.
But Prime Minister Anthony Albanese has this month ruled out raising the GST or expanding it to cover items like fresh food that have been exempt since it debuted in July 2000.
‘I’m a supporter of progressive taxation, consumption taxes by definition are regressive in their nature, so that’s something that doesn’t fit with the agenda,’ he said.
Treasury traditionally creates a ‘red book’ after the election in the event of a Labor win and a ‘blue book’ should there be a Coalition victory.
