Labor has given another indication it may revisit housing tax concessions in the May budget, as pressure builds around negative gearing and the capital gains tax discount. The article argues that these concessions have increasingly been seen as favouring wealthy investors over younger Australians trying to enter the housing market, with new political and economic data strengthening the case for change.
A key development was the endorsement by two government senators, including Western Australia’s Ellie Whiteaker, of a Senate committee finding that existing tax concessions have distorted the housing market in favour of investors. This is politically significant because it suggests support for reform is not limited to the Greens or crossbenchers, but is gaining traction within Labor-aligned ranks as well. The piece frames this as another sign that Treasurer Jim Chalmers may be preparing the ground for policy changes in the upcoming federal budget.
Kate Chaney is positioned in the article as an important crossbench voice in the reform debate. Treasury has reportedly asked Chaney’s office for the results of a survey, with the implication that this material could be used to support Chalmers’ case if reforms are introduced. That detail suggests Chaney’s views, and the data gathered by her office, are being taken seriously at the highest levels of government and may help shape the public and policy argument for reform.
The broader economic context adds urgency. The article notes that the cost of building a new home in Perth has doubled in six years, underscoring the worsening affordability pressures in Western Australia as well as nationally. At the same time, Parliamentary Budget Office analysis found that negative gearing and the capital gains discount will cost taxpayers $13.6 billion this financial year alone, with 55 per cent of the benefits flowing to the richest 10 per cent of households. Over the next decade, the capital gains tax concession alone is projected to cost the budget almost $250 billion if it remains unchanged. These figures are used to build the case that the current system is both inequitable and fiscally expensive.
The Greens’ Nick McKim is quoted making a forceful argument that the capital gains tax discount is worsening inequality and fuelling the housing crisis, especially by privileging wealth derived from property over earned income. But Chaney’s contribution is more measured and focused on long-term structural reform. Rather than treating property tax changes in isolation, she argues they should be part of a wider overhaul of Australia’s tax system.
Chaney said any changes would need to sit within a broader reform agenda because the current system is ‘not suitable for the next few decades.’ She said: “We’ve got an ageing population, we rely too much on personal income tax, and we are going to need to shift that balance so that we can support older generations and that involves taxing capital more than taxing income.”
She continued: “There’s a whole lot of things we could do there in order to reduce those personal income rates and part of that is property taxes, also taxing gas better and also looking at GST and how we can structure that.”
Overall, the article presents Chaney as a pragmatic reform advocate whose ideas sit within a bigger conversation about tax fairness, housing affordability and how Australia funds government in the future.