Labor is trying to start an “intergenerational war” rather than help younger Australians get ahead, shadow treasurer Tim Wilson says in his latest attack on the upcoming federal budget.
Anthony Albanese has promised a budget that targets intergenerational inequity, hinting that capital gains tax (CGT) and negative gearing reforms are on the table.
Both are broadly seen as blockers for younger generations trying to buy a home.
But Mr Wilson on Wednesday accused Labor of “lifting the ladder of opportunity up from behind them and denying young Australians a pathway to get ahead”.
“What they’re trying to do is start intergenerational war between the young and the old,” he told Sky News.
“They’re stoking conflict because they think it’s the best way to make their political case.
“What we actually need to be doing is making sure that young Australians have the best chance they have to get ahead by encouraging incentivising hard work, savings and sacrifice and working towards a better future for themselves and their families.
“Instead, we’re getting the complete opposite.”
Asked what his policy response would be, Mr Wilson did not give one, saying instead that young Australians need “hope”.
The Albanese government has been careful not to pre-empt budgetary tweaks to clamp down on inequity between generations but has not ruled out changes to CGT or negative gearing.
CGT is paid on the profit made when an asset sold has increased in value.
But there are two key concessions.
The first is an exemption for family homes in which property owners selling their main residence are typically exempt from the tax.
The second, and more controversial concession, is a 50 per cent discount for property owners who hold an investment for more than 12 months.
Critics argue the discount makes property too attractive to investors and stacks Australia’s supply-starved housing market against first-home buyers, especially when combined with negative gearing, which lets investors deduct rental losses from their salary.
The Prime Minister would not be drawn on any tweaks to CGT or negative gearing when he fronted a press conference on Tuesday but said the “issue of intergenerational equity in general is important”.
“Something that defines a Labor government is that sense of fairness,” he told reporters.
“And in Australian society, what we know is that for many young people, they feel like they haven’t got a fair crack compared with my generation and the generations beforehand.”
Mr Albanese also said “resilience” would be a key theme of the budget.
“Resilience in how we make more things here in Australia, how we become less vulnerable to global shocks, whether that be Covid or whether that be international conflict, whether it be cyber attacks – all of these issues,” he said.
“But also resilience is about social cohesion and giving people that sense of ownership over the economy, making sure that the economy works for them, not people working for an economy.
“And that’s why equity is very important.”
