“We’re looking for, not opportunities to go back on the things that we have got a mandate for, we’re looking for new ideas,” he said.

“We don’t see that as an opportunity to walk back on some of the things that we’re already committed to, in this case, some years ago. We see it as an opportunity to work out what the next steps might be.”

He said the decisions the government makes in the 2020s will determine the “living standards and intergenerational justice” in the following decades.

“I think there is a broad recognition of that. That doesn’t always exist, but I think right now I feel encouraged and confident that there is an element of that in the broader community.”

With tax reform comes “trade-offs” that can be difficult but which the government has to consider, otherwise the country might “spin its wheels”.

“If you think about tax, about broadening the base and lowering the rate and some of these sorts of areas, which is an important element of tax reform theory, there are always difficult trade‑offs associated with that,” Chalmers said.

“So, what we’re trying to do with this roundtable, but more broadly as well, even absent the roundtable, is to be upfront with all of you and the country beyond, about the trade‑offs. To recognise that the easiest thing in the world is for people to come to us and say, we want you to dramatically cut the taxes in our part of the economy and spend dramatically more on our industry without recognising that there are necessary trade‑offs associated with that.”

He added that it would be unusual if the conversation on national reform did not include discussions about tax.

“That would be strange, and it wouldn’t be especially helpful to us. I anticipate, I welcome, the fact that people will come to the roundtable, outside the roundtable, people will pitch up ideas about tax.”

Productivity will suffer with current thinking

James Paterson, shadow finance minister, said the Treasurer’s comments that the tax on unrealised capital gains is off the table is not welcome news for innovation in Australia, despite the government’s rhetoric on improving productivity.

“Whether this was the policy intent or not when superannuation was created, superannuation - particularly from self-managed super funds - has become one of the ways in which people invest in early stage companies and effectively provide venture capital finance in this country,” Paterson said on Sky News yesterday.

“Now if you start to tax unrealised gains then no one in their right mind would use this vehicle to invest in early stage companies. Because their valuations can wildly fluctuate and you could have an up round which significantly increases the value on paper of those shares without actually realising any of the benefit of that gain and you'd be up for a massive tax bill under the Treasurer's tax on unrealised capital gains.

“That's a huge mistake. We have decade-low business investment. The last thing we need to do is to make it any harder than it already is to invest in early-stage companies and start-up companies. We need a dynamic, entrepreneurial economy and the Treasurer's plans are going to put a wet blanket on that.”

Chris Freeland, chief executive of CPA Australia, cautioned that the government’s requirement that any reforms be budget neutral or budget positive risks acting as a handbrake on genuine discussions.

“For tax reform discussions to be effective and to ensure they serve the national interest, the condition of revenue neutrality must be removed,” Freeland said.

“Requiring every tax reform to be budget neutral from day one will stifle ambition. Some of the most effective reforms – such as rebalancing the tax mix or improving system design – may cost money upfront but deliver stronger growth, higher productivity and more sustainable revenue over time.

“Australians deserve a mature and honest conversation about the trade-offs required to fund the services and resources they expect.”

Tax reform design currently flawed

Meanwhile, The Tax Institute said there is substantial support from its members and the wider tax community for changes that make the Australian tax system more equitable, including superannuation reform.

Julie Abdalla, head of tax and legal for the institute, said by design, good tax policy ensures that each person pays an appropriate share, based on their circumstances, to fuel the society in which we wish to live.

“But this outcome cannot and should not be achieved at the expense of sound law design principles,” Abdalla said.

“Legislative change should be underpinned by some key objectives, including that it should be readily able to be interpreted and understood, in order to make compliance with tax obligations simple, have a low level of administrative complexity and not create a disproportionate administrative burden; and be fair and equitable for all Australians, and sustainable into the future.”

She said the proposed Div 296 tax fails on all counts and there are several better, fairer policy options to tax higher superannuation balances, and to create a more equitable tax environment.

“It’s unconscionable that Treasury is pushing this policy through with blatant disregard for the legal and equitable concerns raised by stakeholders. And it is particularly dishonest and disappointing to hear the Treasurer publicly state that no better solutions have been proffered, when many highly intelligent people and superannuation experts have presented various reasonable and workable alternatives.”

She continued that if a person is forced to sell assets to pay a Div 296 tax bill, substantial costs such as CGT and transfer duty are likely to be incurred.

“Not only would they be paying tax on unrealised gains, but on actual capital gains as well. While this stands to raise considerable revenue for Treasury, it is also likely to have an outsized impact on Australians’ investment and savings plans.

This is the opposite of good tax policy design,” she said.

“Although the fundamental policy design of Div 296 is flawed and should not be implemented in its current form, the need for genuine tax reform that makes our tax system more equitable remains.

“The Tax Institute is not opposed to a reduction in the concessional treatment of superannuation. However, the mechanism of taxing unrealised gains sets a dangerous precedent and alternatives should be given due consideration.”