The Most Explosive Tax Debate in Australia Is Back
2/19/202630 min
Australia does something a bit weird: if you make money selling a house or shares, you get taxed at half the rate you’d pay on your actual job. Nice if you’re the one pocketing the profit… not so great if you’re trying to buy your first place and keep getting outbid by investors.
People have argued about this discount for years; it’s political TNT. Bill Shorten tried to change it twice and got burned both times. Now Labor’s back in government, the issue’s landed in a Senate inquiry, and it’s shaping up to be the first real showdown between Treasurer Jim Chalmers and newly appointed Opposition Leader Angus Taylor.
Is this tax break helping the country or just helping those already ahead? And if we tweaked it… would anything actually get better?
Guests:
Brendan Coates – Program Director, Housing and Economic Security, Grattan Institute.
Cathal Leslie – Generation Z economist who has worked at the Productivity Commission, the Australian Treasury, and the OECD in Paris, now working in the AI sector.
Clips
Transcript preview
First 90 secondsSpeaker 00:00
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Peter Martin· Host0:33
What's so bad about the way we tax capital gains that Labor leader Bill Shorten lost two elections trying to change it, and now that it's back in office, Labor is weighing up trying again. Capital gains, profits made from buying and selling things such as houses, are taxed at only half the rate of other income, at only half the rate of wages. Supporters say the special treatment helps landlords. Opponents say it rewards high earners and helps push house prices and home ownership out of reach. The arguments will be tested in a Senate inquiry next week, and then quite possibly in the first public stash between Treasurer Jim Chalmers and Angus Taylor as opposition leader. So it's important to get up to speed. Does it really matter that we tax capital gains at only half the rate of other income, and what does it do?