Australia news live: Jim Chalmers promises more tax reform in budget as war threatens to send inflation past 5%

Key events19m agoTreasurer to pledge 'ambitious tax reform' in pre-budget speech29m agoWelcomeShow key events onlyPlease turn on JavaScript to use this featureAdeshola OreThe shadow energy minister, Dan Tehan, says national cabinet should consider Covid-style government support for the Australia’s trucking industry amid the fuel crisis.Anthony Albanese will meet state premiers and chief ministers today to discuss fuel supply concerns linked to the Middle East conflict. The government is also expected to name a supply chain coordination tsar.Speaking to the ABC’s 7.30 last night, Tehan said national cabinet should consider financial support for the nation’s trucking sector: double quotation markThat’s one of the things I would hope that the prime minister will be looking at. These are all the questions that need to be answered. If that support is needed to make sure that we can get the fuel to where the shortages are, that’s something that absolutely should be looked at. Tehan said the government also needed to ensure it had identified areas hit by fuel shortages.Patrick ComminsThe treasurer’s fifth budget comes amid a global energy shock that Treasury officials say, if persistent, could drive inflation above 5% and slash $16.5bn from the economy by 2027.As petrol prices soar, the Reserve Bank is on track to deliver a third interest rate hike at its next meeting in early May, economists predict, in a move that would ratchet up the pressure on the Albanese government to deliver an inflation-busting budget amid a global energy shock.Chalmers will say: double quotation markWe’re working on substantial savings options for this budget. This will build on the savings we’ve made to date, addressing some of the fastest growing structural spending pressures and making difficult decisions in other areas. Experts warn that Australia’s lacklustre productivity performance has undermined future prosperity and made it harder to grow the economy without sparking inflationary pressures.Chalmers said the next wave of reforms “will have a sharper focus on unlocking productive investment, better regulation, even faster approvals, more open trade, skills, and ensuring Australia captures the upsides of AI”.Analysts at all four major banks maintained their rate rise calls for the Australia" class="entity-link entity-organization" data-entity-id="3046" data-entity-type="organization">Reserve Bank of Australia’s next monetary policy board meeting on 4-5 May.Independent economist Chris Richardson said the prospect of another rate hike days out from the 12 May budget sent a stern message to the treasurer that the inflation threat “is serious and we really need to do something”.The government had a historical opportunity to pursue serious reforms across tax policies and spending measures to boost the country’s productive capacity, alleviate inflationary pressures, and shore up the fiscal position, he said.“Good policy is needed and it’s more possible than it has been true for multiple decades.”Treasurer to pledge 'ambitious tax reform' in pre-budget speechPatrick ComminsJim Chalmers will today promise to deliver a trio of “ambitious reform packages” in the May budget that will rebuild fiscal buffers, make the tax system fairer, and lift the nation’s lagging productivity performance.In a major speech in Melbourne today, the treasurer will commit to “make hard decisions” in the upcoming budget, amid an ongoing US-Israel war on Iran that “is adding to inflation risks, weighing on growth and increasing already elevated uncertainty”.In extracts from the address to the Australian Business Economists, Chalmers spruiked Labor’s existing tax policies – including upcoming income tax cuts – but flagged no final decisions had been made on future changes. double quotation markWe are working on more tax reform in the budget – how much we can do in May depends on fiscal considerations, international developments and cabinet deliberations. There is a broad expectation the budget will include a plan to scale back the 50% capital gains tax discount but the treasurer cautioned that no final decision had been made.He said tax reform “would be guided by some clear principles”.They included addressing intergenerational equity, incentivising productive business investment – “if we can afford to” – and making the system “simpler and more sustainable”. double quotation markWe recognise an outdated tax system is weighing on the opportunities faced by younger Australians and future generations. WelcomeGood morning and welcome to our live news blog. I’m Martin Farrer with the top overnight stories and then it will be Nick Visser with the main action.Jim Chalmers will today promise to deliver a trio of “ambitious reform packages” in the May budget that will rebuild fiscal buffers, make the tax system fairer and lift the nation’s lagging productivity performance. The treasurer will be speaking at an event in Melbourne at 12.30pm. More coming up.The background to Chalmers’ speech is the global energy crunch brought on by the US-Israeli war on Iran, which Treasury models suggest could push inflation past 5%. Anthony Albanese will today hold a virtual meeting of the national cabinet from Tasmania to discuss how to respond to the crisis, which has seen panic-buying of petrol and fears about shortages. We’ll have more when it happens.Tropical Cyclone Narelle could be one of the biggest storms ever to hit northern Australia when it makes expected landfall tomorrow. We’ll have regular updates on what’s happening.