Latest news with #Yeaman
The Advertiser
02-07-2025
- Business
- The Advertiser
Major tax reform probably 'a bridge too far': CBA
A leading economist has poured cold water on hopes that the federal government could pull off a major tax overhaul at its productivity summit. At the same time Luke Yeaman has urged Treasurer Jim Chalmers to consider increasing means testing to raise more revenue. Mr Yeaman, the former deputy Treasury secretary under Dr Chalmers who now leads the Commonwealth Bank's economics team, said a "grand bargain" between the federal and state governments on tax reform was unlikely, at least in the short term. While the government could find some joy in improving areas like housing and energy infrastructure approvals and capital gains tax, large-scale reform around areas like the GST would likely prove too difficult. "There's no doubt that Australia needs a bolder reform agenda," Mr Yeaman said as he released CBA's economics update for the 2026 financial year on Wednesday. "We've had a successful economy, steady growth that has led to a feeling of complacency in the system." With Labor holding a large majority in parliament and Labor governments in most states, expectations will be high for the government to deliver something substantial a the August roundtable, he said. But given fiscal challenges faced by all levels of government and Dr Chalmers's requirement that reforms be at least budget neutral will likely make large-scale reform around GST "a bridge too far" in the short term, although it could lay the groundwork for reform down the track. Governments have typically needed to "buy" reform by spending extra to compensate people who are made worse off. Increasing means-testing on major spending programs should therefore be revisited to achieve the government's aims of fixing the budget deficit and help fund tax cuts elsewhere to boost work incentives and abolish inefficient taxes such as stamp duty and payroll tax. Large outlays in recent years on energy rebates and Medicare spending have typically benefited everyone, even high-income earners with more capacity to pay. "So I think there's an opportunity to look at some of the key spending programs and whether you can drive more means testing and user contributions through that," Mr Yeaman said. Another potential area for reform was around planning and zoning, where Mr Yeaman said he saw a real appetite for change. Senior government figures, including Housing Minister Clare O'Neil and Assistant Minister for Productivity Andrew Leigh, have called to slash red tape slowing approvals for important projects like residential construction and clean energy generation. "If the government wants to achieve its goals in infrastructure, housing, net zero and future industries - without that, I don't think you'll achieve those objectives," Mr Yeaman said. "I think there's been too much focus on new regulation to protect and manage risk. There's an opportunity to rebalance that towards a more growth-focused agenda on regulation." A leading economist has poured cold water on hopes that the federal government could pull off a major tax overhaul at its productivity summit. At the same time Luke Yeaman has urged Treasurer Jim Chalmers to consider increasing means testing to raise more revenue. Mr Yeaman, the former deputy Treasury secretary under Dr Chalmers who now leads the Commonwealth Bank's economics team, said a "grand bargain" between the federal and state governments on tax reform was unlikely, at least in the short term. While the government could find some joy in improving areas like housing and energy infrastructure approvals and capital gains tax, large-scale reform around areas like the GST would likely prove too difficult. "There's no doubt that Australia needs a bolder reform agenda," Mr Yeaman said as he released CBA's economics update for the 2026 financial year on Wednesday. "We've had a successful economy, steady growth that has led to a feeling of complacency in the system." With Labor holding a large majority in parliament and Labor governments in most states, expectations will be high for the government to deliver something substantial a the August roundtable, he said. But given fiscal challenges faced by all levels of government and Dr Chalmers's requirement that reforms be at least budget neutral will likely make large-scale reform around GST "a bridge too far" in the short term, although it could lay the groundwork for reform down the track. Governments have typically needed to "buy" reform by spending extra to compensate people who are made worse off. Increasing means-testing on major spending programs should therefore be revisited to achieve the government's aims of fixing the budget deficit and help fund tax cuts elsewhere to boost work incentives and abolish inefficient taxes such as stamp duty and payroll tax. Large outlays in recent years on energy rebates and Medicare spending have typically benefited everyone, even high-income earners with more capacity to pay. "So I think there's an opportunity to look at some of the key spending programs and whether you can drive more means testing and user contributions through that," Mr Yeaman said. Another potential area for reform was around planning and zoning, where Mr Yeaman said he saw a real appetite for change. Senior government figures, including Housing Minister Clare O'Neil and Assistant Minister for Productivity Andrew Leigh, have called to slash red tape slowing approvals for important projects like residential construction and clean energy generation. "If the government wants to achieve its goals in infrastructure, housing, net zero and future industries - without that, I don't think you'll achieve those objectives," Mr Yeaman said. "I think there's been too much focus on new regulation to protect and manage risk. There's an opportunity to rebalance that towards a more growth-focused agenda on regulation." A leading economist has poured cold water on hopes that the federal government could pull off a major tax overhaul at its productivity summit. At the same time Luke Yeaman has urged Treasurer Jim Chalmers to consider increasing means testing to raise more revenue. Mr Yeaman, the former deputy Treasury secretary under Dr Chalmers who now leads the Commonwealth Bank's economics team, said a "grand bargain" between the federal and state governments on tax reform was unlikely, at least in the short term. While the government could find some joy in improving areas like housing and energy infrastructure approvals and capital gains tax, large-scale reform around areas like the GST would likely prove too difficult. "There's no doubt that Australia needs a bolder reform agenda," Mr Yeaman said as he released CBA's economics update for the 2026 financial year on Wednesday. "We've had a successful economy, steady growth that has led to a feeling of complacency in the system." With Labor holding a large majority in parliament and Labor governments in most states, expectations will be high for the government to deliver something substantial a the August roundtable, he said. But given fiscal challenges faced by all levels of government and Dr Chalmers's requirement that reforms be at least budget neutral will likely make large-scale reform around GST "a bridge too far" in the short term, although it could lay the groundwork for reform down the track. Governments have typically needed to "buy" reform by spending extra to compensate people who are made worse off. Increasing means-testing on major spending programs should therefore be revisited to achieve the government's aims of fixing the budget deficit and help fund tax cuts elsewhere to boost work incentives and abolish inefficient taxes such as stamp duty and payroll tax. Large outlays in recent years on energy rebates and Medicare spending have typically benefited everyone, even high-income earners with more capacity to pay. "So I think there's an opportunity to look at some of the key spending programs and whether you can drive more means testing and user contributions through that," Mr Yeaman said. Another potential area for reform was around planning and zoning, where Mr Yeaman said he saw a real appetite for change. Senior government figures, including Housing Minister Clare O'Neil and Assistant Minister for Productivity Andrew Leigh, have called to slash red tape slowing approvals for important projects like residential construction and clean energy generation. "If the government wants to achieve its goals in infrastructure, housing, net zero and future industries - without that, I don't think you'll achieve those objectives," Mr Yeaman said. "I think there's been too much focus on new regulation to protect and manage risk. There's an opportunity to rebalance that towards a more growth-focused agenda on regulation." A leading economist has poured cold water on hopes that the federal government could pull off a major tax overhaul at its productivity summit. At the same time Luke Yeaman has urged Treasurer Jim Chalmers to consider increasing means testing to raise more revenue. Mr Yeaman, the former deputy Treasury secretary under Dr Chalmers who now leads the Commonwealth Bank's economics team, said a "grand bargain" between the federal and state governments on tax reform was unlikely, at least in the short term. While the government could find some joy in improving areas like housing and energy infrastructure approvals and capital gains tax, large-scale reform around areas like the GST would likely prove too difficult. "There's no doubt that Australia needs a bolder reform agenda," Mr Yeaman said as he released CBA's economics update for the 2026 financial year on Wednesday. "We've had a successful economy, steady growth that has led to a feeling of complacency in the system." With Labor holding a large majority in parliament and Labor governments in most states, expectations will be high for the government to deliver something substantial a the August roundtable, he said. But given fiscal challenges faced by all levels of government and Dr Chalmers's requirement that reforms be at least budget neutral will likely make large-scale reform around GST "a bridge too far" in the short term, although it could lay the groundwork for reform down the track. Governments have typically needed to "buy" reform by spending extra to compensate people who are made worse off. Increasing means-testing on major spending programs should therefore be revisited to achieve the government's aims of fixing the budget deficit and help fund tax cuts elsewhere to boost work incentives and abolish inefficient taxes such as stamp duty and payroll tax. Large outlays in recent years on energy rebates and Medicare spending have typically benefited everyone, even high-income earners with more capacity to pay. "So I think there's an opportunity to look at some of the key spending programs and whether you can drive more means testing and user contributions through that," Mr Yeaman said. Another potential area for reform was around planning and zoning, where Mr Yeaman said he saw a real appetite for change. Senior government figures, including Housing Minister Clare O'Neil and Assistant Minister for Productivity Andrew Leigh, have called to slash red tape slowing approvals for important projects like residential construction and clean energy generation. "If the government wants to achieve its goals in infrastructure, housing, net zero and future industries - without that, I don't think you'll achieve those objectives," Mr Yeaman said. "I think there's been too much focus on new regulation to protect and manage risk. There's an opportunity to rebalance that towards a more growth-focused agenda on regulation."
Perth Now
02-07-2025
- Business
- Perth Now
Major tax reform probably 'a bridge too far': CBA
A leading economist has poured cold water on hopes that the federal government could pull off a major tax overhaul at its productivity summit. At the same time Luke Yeaman has urged Treasurer Jim Chalmers to consider increasing means testing to raise more revenue. Mr Yeaman, the former deputy Treasury secretary under Dr Chalmers who now leads the Commonwealth Bank's economics team, said a "grand bargain" between the federal and state governments on tax reform was unlikely, at least in the short term. While the government could find some joy in improving areas like housing and energy infrastructure approvals and capital gains tax, large-scale reform around areas like the GST would likely prove too difficult. "There's no doubt that Australia needs a bolder reform agenda," Mr Yeaman said as he released CBA's economics update for the 2026 financial year on Wednesday. "We've had a successful economy, steady growth that has led to a feeling of complacency in the system." With Labor holding a large majority in parliament and Labor governments in most states, expectations will be high for the government to deliver something substantial a the August roundtable, he said. But given fiscal challenges faced by all levels of government and Dr Chalmers's requirement that reforms be at least budget neutral will likely make large-scale reform around GST "a bridge too far" in the short term, although it could lay the groundwork for reform down the track. Governments have typically needed to "buy" reform by spending extra to compensate people who are made worse off. Increasing means-testing on major spending programs should therefore be revisited to achieve the government's aims of fixing the budget deficit and help fund tax cuts elsewhere to boost work incentives and abolish inefficient taxes such as stamp duty and payroll tax. Large outlays in recent years on energy rebates and Medicare spending have typically benefited everyone, even high-income earners with more capacity to pay. "So I think there's an opportunity to look at some of the key spending programs and whether you can drive more means testing and user contributions through that," Mr Yeaman said. Another potential area for reform was around planning and zoning, where Mr Yeaman said he saw a real appetite for change. Senior government figures, including Housing Minister Clare O'Neil and Assistant Minister for Productivity Andrew Leigh, have called to slash red tape slowing approvals for important projects like residential construction and clean energy generation. "If the government wants to achieve its goals in infrastructure, housing, net zero and future industries - without that, I don't think you'll achieve those objectives," Mr Yeaman said. "I think there's been too much focus on new regulation to protect and manage risk. There's an opportunity to rebalance that towards a more growth-focused agenda on regulation."
West Australian
06-06-2025
- Business
- West Australian
Australia in driver's seat but US trade deal some time away, says CBA
The chief economist at the nation's biggest bank has warned an Australian trade deal with the US could be some time away given the complexity involved and America's push for increased market access. Commonwealth Bank's Luke Yeaman also said there was a risk that if Donald Trump does not strike deals with key trading partners before the July 9 deadline — when the pause on the US President's reciprocal tariffs is due to resume — he may 'lose patience and reinstate unilateral tariffs . . . sparking another round of volatility in global markets'. It comes as the Australian sharemarket swung on Friday following turmoil in the US, following an ugly exchange between Mr Trump and Elon Musk that wiped more than $US150 billion ($231b) off the value of Tesla. Prime Minister Anthony Albanese also signalled he was prepared to make concessions allowing American beef into the country as deliberations ramp up. Mr Yeaman said Australia remained in a 'relatively strong negotiating position' as the country's tariffs are equal to Mr Trump's global minimum level of 10 per cent. He said the recent move to double steel and aluminium taxes to 50 per cent would be a concern, but the Federal Government won't feel pressured to conclude an agreement quickly. 'Using the UK deal as a template, an Australian trade deal could still be some time away,' Mr Yeaman said. 'There are obvious areas for co-operation (critical minerals), but addressing key US asks around market access for US beef exports, the Pharmaceutical Benefits Scheme, regulation of US tech companies and defence spending won't be easy.' Last month, the UK became the first country to agree to a trade deal with the US since Mr Trump imposed the sweeping tariffs in April. Prime Minister Keir Starmer this week said Britain was hoping to ink a pact with the US in the next two weeks to avoid the new tariffs on steel. Mr Yeaman said those talks — alongside America's negotiations with China and the European Union — provided important insights into the Trump administration's thinking. He said last month's US-China trade war pause showed both countries have an economic 'pain threshold' they are unwilling to cross — albeit a high one. 'This takes some severe downside scenarios off the table, but tensions will remain high and further bouts of escalation are likely,' Mr Yeaman said. 'Whenever two superpowers 'play chicken' there is always a risk of a head on crash. With US-China tariffs escalating to over 125 per cent, it appeared that could be the outcome (and a severe global recession). 'Both countries have now shown that they do not want to go down that road — the economic costs are simply too high.' But despite the de-escalation, Mr Yeaman remained doubtful a comprehensive US-China trade agreement would be settled by August 14. AMP deputy chief economist Diana Mousina said financial markets appeared to remain confident Mr Trump would pull back from the brink. 'US sharemarkets have had a massive rally in recent weeks, and are up by 19 per cent since the post-Liberation day lows,' she said. 'It is hard to see this positive momentum continuing when Trump's tariffs are still up in the air.' There were plenty of risks weighing on shares including the trade battles, American debt and tensions in Iran, Ms Mousina said. The Aussie dollar could remain weak in the near-term, she said.
Sky News AU
25-05-2025
- Business
- Sky News AU
CBA predicts two more rate cuts in 2025 following RBA's ‘noticeable shift in tone'
CBA chief economist Luke Yeaman believes there was a 'noticeable shift in tone' from the Reserve Bank of Australia following their meeting last week, which resulted in interest rates being cut. 'The shift in tone was clear, and they've decided that they're much more concerned about the downside risks to inflation now than they were previously, and they've become more confident that some of the upside risks to inflation has faded,' he told Sky News Business Editor Ross Greenwood. Mr Yeaman claimed Australia now has inflation back within the RBA's target band, but they 'haven't quite declared victory. 'I think Michele Bullock was quite close to that at her press conference this week, and she's said they've now moved into a new phase where their job is to keep inflation in the target band,' he said. Mr Yeaman predicted that Australians may see two more interest rate cuts over the course of this year. In partnership with Commonwealth Bank.
The Guardian
09-04-2025
- Business
- The Guardian
Australia ‘not immune' to fallout from Trump's tariffs on China, experts say
Australia's economy will not escape unscathed from Donald Trump's trade war, economists have warned, after the US hiked duties on Chinese imports to 104% and enacted world-wide tariffs that have reversed a century of American trade liberalisation. As regional sharemarkets tumbled further on Wednesday and the Australian dollar slid below US60 cents, and to its lowest in more than two decades outside the pandemic, experts warned trade between China and the United States would grind to a halt as Trump followed through on his threat to slap even higher 'reciprocal' import duties on about 60 trading partners. Sign up for the Afternoon Update: Election 2025 email newsletter The CBA's chief economist, Luke Yeaman, said it was a historic moment and that it was difficult to predict how the trade shock would flow through to the global economy. 'The era of trade liberalisation, free market reforms, deregulation and fiscal discipline – the Washington Consensus – is officially dead and buried,' Yeaman said. Treasury officials and leading economists, such as the ANU's Warwick McKibbin, have predicted Australia should be relatively shielded from a global trade war. Financial markets already believe it could lead the Reserve Bank to deliver a rare double rate cut when it next meets on 19-20 May, and that the larger duties on Chinese imports and the escalating rhetoric have ratcheted up the risk of an even greater blow to Australia's growth. A survey of consumer sentiment this week showed a sharp drop in confidence among Australians – a precursor to lower spending should households already hit by the high cost of living feel they have to become more frugal. The ANZ's chief economist, Richard Yetsenga, said it was not a time to be complacent about the risks to Australia's outlook. 'The trajectory is quite worrying. I don't think anyone should be sanguine,' Yetsenga said. 'China is one third of global production, and the US is a quarter of global demand, and 100% tariffs make it hard for much trade to happen between those two countries. How can Australia not be materially affected?' Yetsenga believes that the damage to the American economy and financial markets will eventually force Trump to 'pivot' away from his protectionist policies. For now, however, the US president is doubling down. In response, Chinese officials have promised to 'fight to the end', and Europe is reportedly preparing its own retaliatory measures. China, Japan, South Korea, India and Taiwan are among Australia's biggest export markets and as of Wednesday were hit with import duties of 104%, 25%, 27% and 32%, respectively. Sign up to Afternoon Update: Election 2025 Our Australian afternoon update breaks down the key election campaign stories of the day, telling you what's happening and why it matters after newsletter promotion That was on top of the 10% 'baseline' tariffs on all countries, including Australia, announced on 2 April. Yeaman, a former Treasury deputy secretary, said he believed Australia, with its relatively limited direct trade links with the US, was 'as well placed as anybody' to ride out Trump's trade war. 'Our economic fundamentals are strong,' he said, pointing to the solid support to growth and employment from high government spending, and the buffer offered by a weakening exchange rate. 'We are well placed, but not immune.' The treasurer, Jim Chalmers, echoed that view ahead of meeting with the Council of Financial Regulators on Wednesday afternoon, which includes the Treasury secretary and the Reserve Bank governor. 'There's a lot of uncertainty in the global economy, but Australia is well placed and well prepared to deal with it,' Chalmers said. 'We are working closely with the regulators, and we are confident that we can weather these global conditions, but we're not complacent about that.'
