Updated: Prime Minister Anthony Albanese has put the kibosh on any suggestions that his government will be removing concessions associated with capital gains tax (CGT).
Mr Albanese was responding to claims made by shadow treasurer Angus Taylor that the government’s proposed change to tax concessions for those with more than $3 million in super would be “the start of a slippery slope”, which could include a winding back of CGT tax concessions.
The PM, speaking on ABC Radio National’s Breakfast program, was emphatic in his denial, invoking a phrase reminiscent of former Liberal PM Tony Abbot’s comment on any future leadership plans in 2016. At the time Mr Abbott described his ambitions as: “Dead, buried, cremated.”
Mr Albanese dismissed possible CGT changes with similar veracity: “We are not going to impact the family home, full stop exclamation mark.
“It’s a bad idea … we will not be making any changes there.”
Of course, politicians have a reputation for failing to keep promises, so is there a possibility that Labor could wiggle its way around Mr Albanese’s seemingly categoric assurance?
Treasury data shows that, of the almost $72 billion that Australia’s various CGT exemptions cost annually, $48 billion is on exemptions for the family home. In theory that leaves $24 million that could be saved by removing exemptions that do not target the main family residence.
And there are members of parliament who believe that housing concessions should remain untouchable. Independent senator David Pocock has proposed capping the number of investment properties eligible for negative gearing tax concessions at one or two.
Last November, Greens MP Max Chandler-Mather was scathing of the number of concessions last year’s federal government offered to the wealthy.
“In the middle of one of the worst housing crises in our country’s history, the Federal Budget includes $157 billion worth of tax concessions to property investors, 56 per cent of which will go entirely to the top 10 per cent of income earners,” he said.
“When it comes to capital gains tax discounts, I have no idea how Labor justifies a tax concession that will see 85 per cent of the benefit flowing to the top 10 per cent of income earners.”
While Mr Pocock’s proposed cap would leave the family home out of the equation, it’s unlikely it would ever get majority support in parliament.
Chris Richardson, an independent media commentor on economic trends, says that even though housing tax breaks cost the government more in forgone revenue, the political cost of scaling back negative gearing and CGT discounts for the wealthy would likely be greater.
It’s much safer to target superannuation concessions. “It’s reasonable policy but it’s also populist policy,” he said.
So, on balance, there is little chance the Albanese government will be making any alterations to CGT concessions in the foreseeable future, and the likelihood of any such changes targeting the family home appears low.
Do you take advantage of capital gains tax concessions? Do you think CGT reform is needed? Why not share your thoughts in the comments section below?
Also read: Treasurer caps super tax breaks for accounts with more than $3 million
I am 76 years old and enjoy some of the tax concessions We have several investment properties, but not negatively geared, and somewhat under the new cap in Super, but certainly enough to carry us through to the end.
The concessions clearly favour old people like me, and one cannot justify existing concessions on super that in one case has $400 million in assets
In the 2019 election, if Shorten had been elected I would have ” lost ” around $30000 pa in refunded franking credits. I still voted Labor, ( Greens actually) although I still picture smirking Bowen saying on the Fr Cr issue ” if you dont like it dont vote for us” I believe the terrible inequity in our world would have to to be redressed if we were to have a properly functioning society, but of course it will not happen
One can but hope it is the start of a slope to remove the many unjust tax concessions we have that mostly benefit the already well off. I mean good on them for being well off, some of them would actually have worked for it, but the wealthy should not expect concessional support which actually comes from hitting up those less well off.
Do we learn any lesson from the last time, in 1985, Bob Hawke removed the negative gearing and the Sydney and Perth rental went skyrocketed? Due to political pressure, the Hawke Government had to reinstall the negative gearing. I know the time has changed but has politic changed?
There won’t be any changes to capital gains on the family home.
However, there may be some with regard to investment properties. Certainly having a cap (2?) on the number of investment properties that can be owned and have negative gearing and CGT concessions is a great idea.
BTW, the superannuation tax change proposed is not a broken promise. It will not kick in until after the next election.
Take no notice of anything Angus Taylor or Peter Dutton say on this matter. They are just playing politics – and it will be to their detriment.
Shame on you for saying Labor has broken an electoral promise on superannuation. They have explained the proposed changes that they will take to the next election. Why shouldn’t investment properties be subject to a capital gains tax? Investment properties are not a family home.
Report the truth please, and no scare mongering in your articles.