The Albanese government has ruled out further tax reform this term as it seeks to bed down a raft of changes to improve the economy.

The Business Council this week called for “comprehensive tax reform”, saying the government would not be able to efficiently raise the money it needs to pay for services or provide the right incentive for investment without it.

However, senior government sources said there would be no tax reform this term beyond that already flagged by the government.

Treasurer Jim Chalmers said in the lead-up to the Intergenerational Report, to be released on Thursday, his priority was overhauling taxes on multinationals, high-balance superannuation accounts and offshore petroleum production.

“We need to make the budget more sustainable and that is obviously one of the main conclusions of the Intergenerational Report,” he told reporters in Sydney.

“What the Intergenerational Report will show is that the tax base will change over time.”

He said two expected changes were less revenue from cigarettes as more people stopped smoking and less fuel excise as more electric vehicles hit the roads.

Already-legislated stage three income tax cuts are expected to come into effect next year but further changes beyond these are not anticipated.

Labor is still reeling from the way the ambitious Henry tax review was received 13 years ago.

But government sources say there is an appetite for changes in bite-sized chunks beyond this term.

Dr Chalmers said while the government had posted a more than $20 billion surplus since coming to office, challenges were still to come.

“The pressures on the budget are intensifying rather than easing into the future: aged care, healthcare, the NDIS, defence and interest costs on our debt,” he said.

The Intergenerational Report will set out the medium- and long-term challenges for the Australian economy.

The biggest shifts are expected to be from globalisation to fragmentation, fossil fuels to renewables, IT to artificial intelligence, a younger to older population and an industrial base to a care-based economy.

The government is rolling out a reform strategy based on making the economy more dynamic and productive and creating more opportunities in more parts of the country, especially where there is disadvantage.

The focus will be on budget repair, targeting inflation, transforming energy markets, the labour and migration systems, broadening the industrial base, driving investment, more efficient markets and renewing institutions such as the Reserve Bank.

A government source said beyond addressing the cost of living, the key economic issue was the energy transformation as the country heads to net-zero emissions and trading partners shift to cleaner technologies.

This will involve the new safeguard mechanism, the development of hydrogen, the Net Zero Authority, working with the United States and helping the Indo-Pacific region decarbonise.

The Employment White Paper and migration review to be released in coming months will provide the foundation for further reform.

The government is also looking at attracting more and better-quality foreign investment through a future overhaul of regulations and smoother access for trusted investors.

Changes to mergers and acquisitions and a Southeast Asia economy strategy are also on the cards.

Laws to change the way the Reserve Bank operates are expected to be in place by mid-2024, following a landmark review of its processes.

Paul Osborne and Andrew Brown
(Australian Associated Press)