Prime Minister Anthony Albanese has spent the fourth anniversary of his election win defending the budget while New Zealand’s finance minister encourages Australian business owners to cross the ditch to benefit from lower taxation.
Labor’s changes to negative gearing and the capital gains tax discount put Australia’s tax settings in contrast to those in New Zealand, which does not have a standalone capital gains tax and re-introduced negative gearing two years ago.
“We’re throwing absolutely everything at this because I don’t want for the generation … to be the first generation that basically give up on housing. That, essentially, is why we’ve changed our position,” Albanese told Brisbane’s KIIS FM on Thursday morning.
New Zealand’s Labour government under then-prime minister Jacinda Ardern abolished a more limited version of negative gearing, a policy move that was blamed for stagnant housing prices and increased rents. Some experts have said the policy change’s effectiveness is hard to judge as it was clouded by post-pandemic economic factors.
The policy was reinstated in 2024 following the election of a conservative coalition government led by Prime Minister Christopher Luxon, of the National Party.
Albanese brushed off comparisons to the failed New Zealand attempt to alter negative gearing, saying his government had proposed a “comprehensive” housing package that included 5 per cent deposits, Labor’s shared equity program, and the Housing Australia Future Fund.
Speaking to Sky News shortly after Albanese’s radio appearances, New Zealand’s Finance Minister Nicola Willis urged Australians to move across the Tasman Sea, spruiking her nation’s lack of capital gains tax.
“Australians looking to start or grow a business have an epic opportunity, and that opportunity is to do it in New Zealand. No capital gains tax, very simple tax system, broad base, low rate. We keep it simple,” Willis said.
“We allow you accelerated depreciation and deductibility on your capital investments, and you’ve got a government that is very pro-growth, anti-red tape. We’re on a reforming mission to make this one of the best places in the world to do business, so my point would be, where the bloody hell are you?”
Luxon’s coalition government was formed in 2023 alongside the right-wing ACT Party and populists New Zealand First. His government has suffered sustained drops in opinion polling, and is expected to face former prime minister Chris Hipkins in a November election in which Labour will propose a flat 28 per cent capital gains tax.
While New Zealand does not currently have a standalone capital gains tax, proceeds from the sale of assets are taxed under existing income taxes.
Data released by New Zealand last week confirmed Kiwis continue to flock to Australia. In the 12 months to the end of September 2025, a net 29,300 people left New Zealand for Australia. In that September quarter alone, 10,953 New Zealanders moved to Australia, the largest September quarter movement since 2012.
Former Australian prime minister Paul Keating, who as treasurer introduced the capital gains tax in 1985, came out in defence of the Albanese government’s alterations, accusing investors critical of the move of pure greed.
“They want to retain a preference for capital over wage and salary income,” Keating said in a written statement.
“A society that fails to house its children is a society in decline – this is what Jim Chalmers and his prime minister are seeking to arrest.”
Keating’s defence of the government comes a week after Treasurer Jim Chalmers, who wrote his PhD on Keating’s pro-market reforms, restored the capital gains tax discount to a model similar to the one Keating created.
The discount will, from July 1, 2027, be replaced with an inflation indexed tax that applies only to “real” gains. A minimum 30 per cent tax rate will also apply. Newly built homes will be exempt from the change.
Opposition Leader Angus Taylor dismissed Keating’s statement as “more nonsense” from the former leader.
“I mean, seriously, every small business owner in this country is reconciling themselves to the fact that they have a new business partner in Anthony Albanese. He’s decided to become their business partner,” Taylor told an Adelaide press conference.
Labor changes to negative gearing will limit the tax break to new residential builds from July 2017. However, the changes will be grandfathered, meaning everyone who already negatively gears investment properties can continue until they relinquish the asset.
Nick Newling is a federal politics reporter for The Sydney Morning Herald and The Age.Connect via X or email.