Did Albo hand Chalmers an 'excrement sandwich'?

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is backing down on what would have been a minor change to tax policies, what does it mean for more ambitious changes?

Welcome to Politics Now.

Hi, I'm Brett Worthington filling in for PK.

And I'm Raph Epstein from ABC Radio Melbourne.

Hey Raph, there's been a bit of chatter happening here in Canberra last week.

It was noticed that the Treasurer had been pretty muted compared to what you'd usually see of Jim Chalmers during a sitting week.

There was some early forecasts forecasts saying if he doesn't do a Monday morning press conference when the Prime Minister is on leave, you'll know something's up.

And sure enough, there it was.

The alert came.

He's heading to do a press conference.

And they're sort of like proof of life things.

Hey, I'm here.

Got any questions?

No one imagined that when they walked into that press conference today, the treasurer would be announcing quite the backdown.

What did you think when you heard that there were changes coming to this policy?

I'm surprised.

I thought they had repeated their lines a lot.

I guess the two big changes that surprised me, one, the unrealized gain.

So if you had a superannuation balance of 3 million above that, if you started to make some money, you were going to be taxed more.

I was surprised they came up with the unrealized thing.

And also indexation.

Like you and I know that we are all, just because we've got a job, we are gradually going to be paying more tax over time because our income, our marginal tax rates, are not indexed.

So the top tax dollar we pay on the top dollar that we earn, that's going going to change because just inflation pushes me up there.

They don't index the tax brackets for income tax.

They are going to index this.

It's going to be linked to inflation.

So I actually, I thought that was surprising.

I thought

they were going to dig in their heels.

Are you surprised they changed?

They backed down?

How big a backdown is it?

Well, I think it's quite a backdown when you look at it in a scheme of this has been long-held government policy.

We've got to go back years since Jim Chalmers first announced this with Anthony Albanese.

They planned to do it and have an election in between, and then it would come in after that.

Now, they weren't able to get it through the last parliament.

And we heard last week from Senate Estimates that the Prime Minister's office was seeking a briefing over this in an environment of there being criticism leveled at it.

I think the scale of the change today has certainly surprised people.

So, let's look at some of the things.

The concessional tax rate that you have on superannuation balances, you'll pay 15 cents in every dollar all the way up to 3 million.

That remains as the policy was previously.

For balances above $3 million, you'll now pay 30%.

That is what was being offered under the previous plan.

But now there's a new threshold, a $10 million.

If you've got $10 million in superannuation, for every dollar above that, you'll be paying 40% on that tax rate.

And like you said, it will be indexed.

So those brackets will continue to increase.

There's also a change at the lower end as well.

The low-income superannuation tax offset will go from $500 to $810.

It will mean that the government brings in less money than what it had been originally hoping.

But the treasurer is saying he talked to the Greens this morning.

It maybe is an indication that they think suddenly they've got a policy they can get through the parliament.

I'm just trying to work through this in my brain.

So I can see that the last two things you mentioned, they're taxing rich people more and poorer people less.

So that's a real, you know, that fits.

That's on brand.

It's not expected.

More people are going to be able to contribute more with the concession at the lower end.

So that'll be really good for them later on in life.

I guess what I'm really trying to square is the unrealised gains and indexing the 3 million thing.

They fought and fought and fought and fought.

And this is in the context post of a big margin of the last election in May, big majority.

They had the big productivity summit that became a tax summit and it was all about, right, we're going to find ways to do more.

We're going to find ways to really shake things up.

I'm trying to work out in my head, it is a big backdown in terms of the regular pen and knife fight that happens in Parliament with all the lobbyists and the business council and the super you know superannuation groups come along and the coalition says unrealized gains it's outrageous it's terrible so it's a backdown tactically

and they lose i think they lose a bit of money because they're delaying the implementations though i think it's a billion dollars a year they lose in the budget i still though think it gives them a platform or a base to say look we were going to tax super balances over 3 million we're still going to tax them now we're going to go after people with 10 million if you are a mum and dad investor and you are thinking about using your superannuation not as something to fund your retirement, but as something to save tax on and pass on to your children, we're indexing this thing.

Like

you're not going to have the sort of growth you might have anticipated.

I think they can paint it as a, no, no.

We're still on the agenda.

We've still got our ideas.

And there's a whole lot of other things we're still thinking about, turnover tax.

Although I think the counter to that argument is the Prime Minister's not here.

So it is the Treasurer that has to handle the excrement sandwich, which I think is language that is.

So the term is being used a lot around here in the early 1990s.

100%.

100%.

Because it's Jim Chalmers that had to announce it.

He's going to have to do all the interviews.

The PM's not doing that breakfast show run around where he does three or four FM stations in a day and throws us in there as well.

Doesn't have to do that.

Why did you back down?

Why did you change your mind?

Why is it still not a good idea when you said it was a good idea for three years and for years before the election?

He doesn't have to answer any of those questions.

So I think in the cut and thrust of politics, it's a loss, back down, backflip, you know, all of those things.

It's a step backwards.

I don't know that it cruels or cripples their ability to try and do something more adventurous in the future.

Although even as I say that, it doesn't look like a brave government, does it?

It doesn't look like a brave, adventurous government sticking to its guns.

And then announced on a day when there's going to be massive news coming out of the Middle East, where a lot of the world's focus is going to be on the release of hostages.

So you could be praised as something.

You've been watching the West Wing too much, taking out the trash while the Middle East is going from flames to calm.

That's the thesis.

You could say, well done, transparency.

Government coming out on a Monday right at the start of the year.

We listen to criticism, Brett.

We engage with our stakeholders and we understand what they're about and where we can, we try to meet our objectives and theirs.

And I think that the element that we often forget is the Senate here, that yes, the government got delivered a wharping majority.

They can do whatever they want in the House of Representatives, but unless they can secure a deal with the coalition or the Greens, nothing is getting through the parliament.

Now, the Coalition has really focused in on the unrealised gains element of this, the farm tax, essentially, that they're...

It's very tricky, right?

Like, if you've got 3 million and it goes up to 3.1 million, but you don't actually have any extra cash, that's an unrealised gain and you can't pay the tax.

Like, so I was, you're right, with the Senate.

The superannuation people, the banking people, everyone else can go to the Greens and say, look at all these examples of all of these these people.

They don't actually look rich.

Three million sounds a lot.

They're not really rich.

Where's the money going to come from?

Yeah, you're right.

I mean, I'm sure the Senate was a real hurdle that they had to work out how to get around.

And notable that the Treasurer flagged that he talked with Larissa Waters today ahead of announcing it.

So we know the sausage-making element here is the Treasurer says he and the Prime Minister spoke on Friday and they decided together that they would then make this recommendation to the Expenditure Review Committee.

So it's basically the razor gang that goes through every line of where the budget is going towards.

The ERC then approved it on Friday, of which Anthony Albanese was there.

Then on Monday today, there's a cabinet meeting happening.

Anthony Albanese is on leave, not there.

Jim Chalmers makes the recommendation to the cabinet and it's adopted there.

But that he would point to the Greens gives you some indication that there is confidence that this can go through.

But I'm curious what this means more broadly for the government going forward, because it's not new to have a tension between a treasurer and a prime minister.

Jim Chalmers since the election result has talked a lot about the need to use its mandate from the election result to have ambition and to push forward for more broad changes.

You've seen people like the independent Allegra Spender very much pushing for broader tax changes.

This was ultimately a very small change to the tax system that would have applied to a very few number of people in the grand schemes of things.

For the government to back down on this when you've had a lot of people running around crying chicken little,

I'm curious what that means means for the government's ability to land much bigger tax reform that the Treasury is quite keen to get into.

Dan Andrews, the Victorian Premier, had a cliche that it's not about the win, it's about the work.

And what he was trying to say there is there's no point occupying the benches.

In fact, Anthony Albanese used to say it in the first term, he's not empowered just to occupy the Treasury benches, which is

the government side of the chamber.

Yeah, of course, it raises the question, how courageous and adventurous are they going to be if they've backed down on this?

I guess it's going to be like a Rorschach test, though.

You know,

those paint splodge pictures where whatever you see actually tells the observer more about you than it tells you about the picture.

So this is one of those classic political events.

It looks a lot to me like a backdown.

It looks a lot to me like in the daily scrap of the parliament, they've lost their nerve and decided, no, it's just a battle not worth fighting.

But are they doing that?

to preserve their gunpowder and actually to really do something big or is this the way it's going to work every time they put up an idea, they're going to sort of weather the storm and adjust it to get it through.

So maybe this is the, well, either way, right, it's going to be the first chapter in the book of Albo's second term, isn't it?

It's either going to be the dismal beginning or the grand heroic switcheroo that fooled us all.

Excrement sandwiches is really lingering with me.

We are obviously recording this just fresh after the treasurer has announced it, and no doubt there will be more updates across the ABC into the afternoon and into tomorrow morning.

But one of the other things that I'm keen to have a chat with you about, RAF, is the domestic fallout to what we are seeing in the Middle East.

We know Donald Trump is headed there.

World leaders are going to be having a chat and talking.

We're expecting the release of hostages.

How are you assessing this moment in an Australian domestic sense?

Last time when we had a chat, we were talking about how the Deputy Prime Minister had told you that it was a moment in Australia unlike any that he could recall in his lifetime.

How are you assessing this current moment now?

So let's look at what both sides of politics are saying so first of all we haven't seen anybody released right there's no no one released from Hamas's captivity yet there are thousands of Palestinians in Israeli prisons they are held there without charge and without ever having a court process we don't know who's going to be released we're assuming that's going to happen in the evening so in the evening perhaps after most people listen to this but in an Australian political context I was just looking at the transcripts of what the PM and the Foreign Minister were saying at the end of last week.

So the PM was making the point, this is on Saturday, so I think this is his last interview before he's gone off on his long-awaited week of leave.

He did get to in either the second or the third question, you then have a recognition by now of 157 countries, I'm reading from the transcript, saying that Palestinians' legitimate aspirations for their own state must be realized.

And you have the U.S.

leadership under President Trump.

So every chance they get, they mention the fact that they are doing something different to the coalition.

That is, along with most countries in the world and they're right there they're recognizing a palestinian state penny wong the foreign minister made the same point in fact she used even stronger language the coalition has been out of step because of course the coalition constantly says oh america australia different the united states hasn't recognized a palestinian state the foreign minister said on friday penny wong the coalition has been out of step with the united kingdom canada australia and the many countries which sought to recognize and to help provide that momentum so their argument is definitely we recognise a Palestinian state.

That's one of the reasons you are seeing Israelis and Palestinians being released today.

That is a big difference.

I think most Australians don't follow whether or not one political party or the other recognises a Palestinian state, but they are speaking to their constituencies.

Labor's got to straddle a fence in the way the coalition doesn't.

The coalition is sort of basically pro-Israel, whereas

the Labor government's sort of, you know, got to speak to a lot of different constituencies.

I mean, it's unusual for foreign affairs to blow back on australian politicians in any significant way but it'll be interesting to see how those arguments hold up if there's substantial progress that involves more than just prisoners being released like if you see some genuine construction some real aid flow into gaza i think then the government's going to have a lot more ground oh look We recognize Palestine had made a big difference.

If it just continues to get ground down and mired and it's just wheels spinning, and yes, you've got prisoners and hostages released, but you don't have construction.

I think then the coalition is going to say, see, we told you you recognised a Palestinian state.

That's why Hamas is still there.

That's why they've still got some guns.

So I think it's really just the

Australian domestic political way of talking about whatever the future holds in the Middle East.

I thought it was notable this morning, the Home Affairs Minister Tony Burke was on RM breakfast and he was talking about that there is hope there, but very much not wanting to get ahead of, you know, great hope has been offered in this region many a times in the past.

This has to be realised before I think they're willing to count their chickens.

But he also wasn't too keen to wade into comments that we saw the Victorian Independent Senator Lydia Thorpe make at a rally in Melbourne yesterday.

She used to turn a phrase around, burn down the Parliament.

Now, Lydia Thorpe was making a point in which she has often made where she links the plight of Indigenous Australians with that of Palestinians.

And her argument was one of, I'm going to Parliament House and I'm going to fight for both these groups and I'm not there to make friends.

Now, she's put out a statement today saying it wasn't a literal threat on burning down Parliament House but it does sit in an environment where the discourse within the community is toxic to put it lightly.

Tony Burke not really wanting to engage with it and I was sort of assessing that as Lydia Thorpe is a well-known brand.

The government will push back on some of the rhetoric that she makes there but very much not wanting to give it oxygen that allows these things to go into day two, day three, day four.

So whether or not the Senate does anything when the Senate comes back is for the Senate.

But it was perhaps an unsurprising contribution from Lydia Thorpe, if not a real threat against Parliament House.

Yeah, look, Lydia Thorpe saying, I am going to burn the house down.

That's just brand management.

It is Lydia Thorpe's brand management.

And I'm not saying that cynically.

I'm saying that realistically.

I think there is, like when you say

the debate is toxic, Like it obviously is, and it's true to say, oh, we all want to bring the temperature down.

But at the same time, there are people in the community who feel those things really passionately.

And part of the job of the parliament is to represent the people who vote for you.

So even though I feel those social strains and those social tensions, and you say it's toxic, I also like, maybe it's really good if Lydia Thorpe and the Greens and the Liberals really strongly represent those things.

Sure, if you're the government, you've got to somehow resolve those really strong social tensions.

But I'm not sure.

if they're the cause of those tensions.

You know, the phone, yet again, that I'm holding in my hand that all the world comes to me on, maybe that's also a big source of, you know, that, those views of the world and what those two sides would call facts.

So

I don't know.

I think there's also a difference in

where disagreement and toxicity intermit in that you've got differences of opinion, but our ability to have a conversation where there is a difference of opinion has been.

Your toxicity is my trust.

Drive.

One man's branch stacking is another person's membership drive.

It's sort of

the inability to meet anywhere in the middle, I think, is where.

Your nepotism is my best person for the job.

I mean, it's just so, I don't know, very uncomfortable working out where to go.

But when it comes to Lydia Thorpe saying she's going to burn the house down, they're not the words I would use.

And I don't know, maybe the Senate sanctions her.

I don't even understand how the Senate sanctions people, to be honest, and they can't sanction people because they got voted into the parliament.

But I'm always slow to judge if rhetoric is entirely to blame and should be contained.

I think more broadly, if people who, you know, One Nation hit a high watermark after the last election, people shouldn't be surprised that if you have a political party that taps into a part of the community, they get elected to the parliament.

That's not everyone's going to agree with you.

And so it might be shocking to some people in some part of the country that there are people who look and sound like a Greens politician or a One Nation politician or an independent.

But if you leave whichever community you live in, you find out these people do live among you.

That's right.

Well, one of the great contributors to all of this tribalism is undoubtedly social media.

And the communications minister, Annika Wells, if she didn't have a full enough dance card as it was with Optus, with gambling,

social media ban coming in in December, she's calling together and meeting with some of the big tech companies today.

The fascinating one, Elon Musk's X next month, given the history of X.

the e-safety commission and social media policy.

I think that's the one you want to be a fly on the wall for.

But there's a lot on the line for the government ahead of these changes.

Annika Wells was not long ago in New York talking it up.

The Europeans are closely watching it.

What are you expecting will come out of these meetings with the tech companies?

These are potentially the most important meetings for the most far-reaching social media policy the world's seen.

So different countries have tried different things.

Britain's tried age verification for porn sites.

They've actually had to scrap it, try it again.

There's a huge drop-off for some of the more popular porn sites and a huge increase in people.

We're using VPNs, Kel Sapries.

But this is bigger.

This is different.

We actually had the ambassador for Denmark on the radio today because the Danish government's gone, oh, that looks interesting.

Because the European countries have only said, if you're a teenager, you're not allowed on social media unless your parents agree.

And then if your parents agree, that's totally fine.

What we're doing in December is really different.

It's, you know, no one under the age of 16.

So those meetings today and tomorrow, they're really important because

we aren't really clear precisely what's going to happen i do think it's the case now that i'm not going to have to show my license to verify my facebook account because they'll either look at my face or look at what i'm saying on facebook and they'll sort of verify that i'm older but there's no doubt that there's going to have to be an intrusion into people's lives and this is exactly what we're looking at eight o'clock on your radio on your local abc radio on tuesday evening also on the 24-hour news channel at eight o'clock on tuesday evening we're going to have someone from the government.

We're going to have someone worried about internet security.

We're going to have Angela Wapier, who's the social media reporter for the ABC.

So really, she's actually someone who understands more of this detail.

But how exactly is your teenager going to be dealt with?

Let's say they're 15 and they've had a social media account for two years.

Let's say they've even made a bit of money with that social media account doing something really good.

Are they going to get chucked off?

Is all of their search history and their entire membership on their Instagram, is that going to get wiped out?

Or is it just going to get frozen until they're 16?

So even really simple, practical questions like that.

That's what the government's talking to Meta and Facebook and

all of the other social media companies, TikTok, that's what they're talking to them about today.

So we're going to tease that out tomorrow evening around the country at eight o'clock.

So come along because I've got a whole lot of questions.

And one thing I know is that there aren't definitive answers to lots of the questions.

So it'll be fun.

Well, especially because the government's not mandating how you go about it.

They just want you to do it.

But I think one thing to watch going forward is Tony Burke today in an interview on RM Breakfast.

So he's the Home Affairs Minister, but he's also the cybersecurity minister.

And one of the questions that he was responding to was to do with the Qantas hack and the release of

very personal information for some people that in some rare cases was their home address, their mobile number.

Where does the government go in terms of the retention of data?

Now, he talked about whether or not companies should have to get rid of data when it's no longer relevant to them.

And I think the social media companies will be a fascinating one to watch because the prospect of handing over a government-issued ID that I know that's not the only mechanism that these companies will use, but it can be part of the broader suite that they look at.

Are people comfortable that these companies will be retaining that data or should they be required to delete some of that information going forward?

And I don't think we've got a clear answer yet from the government about what they will do there, but I just think it's one we need to watch, particularly as we see the fallout from this Qantas leak, which we know went onto the dark web at the weekend.

And there is great concern within the government about the ways in which sophisticated phishing and scams can be carried out because of the types of information that has now been released and whether or not Qantas is going to be fined for that.

I think we're still not exactly sure, but you would imagine a fine will be coming.

Oh, look, it's the number one thing to keep your eye on.

We've all got information out there already on the dark web.

The interesting thing about whether or not it's Qantas, all of Qantas' data getting dumped onto the dark web as well, or let's just say Instagram decides to be super sure.

I've been looking at Instagram a bit more

let's say it puts my face and my name together and somehow that slips out of Instagram and slips onto the dark web and then they add that with my frequent flyer number plus my mobile number and another version of my name all of a sudden the hacking possibilities grow and the AI can personalize the email that I get and it will actually know because it's got all of that information about me it knows that I'm in touch with someone called Brett Worthington because someone's going to maybe post this chat on Instagram.

So the email address will look like Brett Worthington's.

Unless I double check that it's Brett Worthington, that's the phishing email.

So if some of the verification of my social media account contributes to the phishing attack or whatever the scam or the hack becomes, yeah,

that's a huge potential landmine for the federal government, which is why I actually suspect.

the under-16 social media ban may not be as intrusive as first advertised.

Well, Raph, as you know and as my dad knows, it's terrible getting me on the phone even when I know the number in there.

So good luck trying to get me to answer a call when I don't know the number flashing up on it.

You're too young for phone calls, aren't you, Brett?

None of this phone call visual thing.

I held up my thumb and little finger to someone the other day.

That's the universal signal for phones, right?

That surfs up now, isn't it?

Not for someone who's under 30.

They're like, what is that thing?

I've never seen a phone like that.

Phones are flat, right?

Phones are flat.

They don't have the curved handle.

There's no chord here, Raph.

There's none of that.

It's just another version of me being old.

I'm the old man on the show.

Well, Raph Epstein will have the Digital Dilemma Forum live on ABC TV and radio.

It's at 8 o'clock on Tuesday, the 14th of October.

We will put a link to it in the show notes where you can register as an audience member.

Or if you want to submit a comment or question on the social media ban, we'll give you all that information there.

Raph, thank you for spending time with me.

Brett, I can see you're putting the furniture back in the original place.

You're cleaning the tiles.

You're just rearranging the bathroom.

It's good.

As BK left it.

It'll be here perfectly for her as she left.

I'm going to tell her that you've put all her pictures back on the wall, but I will also tell her it's been great fun hanging out once again with Brett Worthington, so I've enjoyed it.

It's a real treat for me to get to do it.

And tomorrow, Shalila Madora from Hack will be here with us, and we're going to look a little bit further into the rise of One Nation and we'll have a bit more on what is going on with these social media companies.

Of course, if you want to send us a question at any point that we can answer for you on the party room, send a short voice note to to the partyroom at abc.net.au and Mel Clark and I will answer it for you on Thursday.

See you, Raph.

See you later, Brett.