The Albanese government reforms to the capital gains tax discount expected to be revealed in next Tuesday’s budget have been labelled a broken promise and “a war on aspiration”.
Speaking in Albury ahead of the crucial Farrer by-election, Opposition Leader Angus Taylor said Treasurer Jim Chalmers’ reforms would break an election promise made by the Prime Minister.
Ahead of last year’s election, Anthony Albanese promised to not introduce the changes, saying they would cause economic harm.
“(Labor are) starting an intergenerational war. They want a war at the kitchen table, they want a war at the Christmas dinner,” Mr Taylor said on Saturday.
“If (Mr Chalmers) pushes through with these tax increases he’s talking about, this war on aspiration … it will just prove that he is a fraud and a liar because (at) the last election, he and the Prime Minister told us there weren’t going to be increases in these taxes.
“I want to see an Australia that is focused on our values and what we believe in, where Australians understand that if they work hard and start a business and employ people.”
Mr Chalmers told news.com that the CGT changes would level up the playing field, not punish baby boomer investors.
“We’re not trying to punish anybody who has made decisions about how they’ve used the tax system or the housing market in the past,’’ the Treasurer said.
“It’s about trying to expand opportunity in the housing market for more people.
“Our motivation in considering some of these changes is recognising that helping people get a toehold in the housing market is a really important way of helping people get a toehold in the economy more broadly.”
The changes to CGT discount arrangements will make it less profitable for investors to pump their money into existing housing stock.
The crackdown would not apply to the family home however, because owner occupiers are already exempt from capital gains tax.
Mr Chalmers on Friday outlined five core elements of the budget.
“It will have five major priorities. First of all, fuel security. Secondly, cost of living and housing,” he said.
“There will be a productivity package, there will be a tax reform package, and there will be a very substantial savings package.
“This is all about making our budget more sustainable over time. It’s about making room for priorities and pressures and making sure that we are saving more than we spend in the budget that we hand out on Tuesday night.”
The government has already revealed several key measures in the budget, including
$64bn in net savings.
Finance Minister Katy Gallagher said on Friday Labor had scraped together the savings by reprioritising funds and trimming spending in key areas, including the National Disability Insurance Scheme.
Trimming the NDIS was the biggest source of savings at $35bn alone, she said.
Other areas included restructuring the private health insurance rebate for over 65s and cutting costs in the public service, which combined was worth $5.7bn.
Defence reprioritisations also yielded $5bn.
Senator Gallagher said the “savings will be used to offset investments in those essential services, national security, economic resilience and some of the unavoidable pressures that we’ve had to deal with in this budget”.
On Saturday, Energy Minister Chris Bowen said Tuesday’s budget would be a “reforming budget … with productivity at its core”.
“We want to grow the Australian economy … and that requires productivity growth, and government can set the scene for productivity growth with reform,” he said.
