ACOSS in a Senate hearing today will urge Parliament to pass the Government’s capital gains discount and negative gearing reforms and not limit the CGT changes to property.
“These reforms will make our tax system fairer, improve housing affordability and stability, and are good for the economy,” said ACOSS Acting CEO Edwina MacDonald.
“Under current settings an investor on $200,000 pays 23.5% tax on gains from shares and property, while a care worker on $70,000 pays 30% on their next dollar earned. This is not justifiable and must be fixed.”
ACOSS said claims this bill harms young people’s ability to get ahead are overblown.
“Fewer than 5% of adults under 35 report capital gains or use negative gearing. In fact only half of young people under 25 have enough income to pay income tax. The idea that young people need these investment tax breaks is out of touch with the reality of their lives today,” Ms MacDonald said.
“In fact, two thirds of investment property, shares, business and financial assets are held by the wealthiest 10% of households. When we need more revenue to fund public services and lift woefully inadequate income supports, finally curbing tax loopholes that benefit people who are already well-off is the right move.
“These reforms support productive investment over speculation in the value of property, shares, crypto and other assets,” said Ms MacDonald. “They will improve housing affordability and stability by removing unfair tax breaks that have driven up housing prices and given investors a huge advantage over people who just want a home to live in.”
ACOSS believes the case hasn’t been made for general carve outs for small or other businesses, and that any adjustments should be tightly targeted.
“Over 90% of small businesses will still get their own 50% CGT discount because they turnover less than $2 million a year. Only a small minority – less than 5% – of new businesses introduce genuine innovations such as those which attract existing venture capital and R&D concessions.”
Previous ACOSS research found the Federal Government currently spends more on housing investor tax breaks ($12.3 billion in 2025) than on social housing, homelessness services and rent assistance combined ($9.6 billion).
“We cannot keep subsidising wealth accumulation at the top, and should instead invest revenue in housing, services, a fair NDIS and income support for the people who need it most. There are four million people with low incomes on income support who don’t benefit from investor tax shelters, or indeed from tax cuts. Many more, including people with disability, children and older people need the essential services funded by taxes. They should have priority,” Ms MacDonald said.
Read the ACOSS submission on the tax bills here.
