2026-01-22

How one tax break keeps Australia unequal   :(
By Senator Nick McKim
greens.org.au

Australia’s most unfair tax break is finally getting the scrutiny it deserves.

Across the country, people are working harder than ever and still falling behind. Rents keep rising, first-home buyers are locked out, and the cost of living eats away at any chance to get ahead. Meanwhile, big corporations and wealthy investors continue to do extraordinarily well, protected by tax settings that reward wealth over work.

Over the next month, a Greens-led Senate inquiry will hear evidence on the capital gains tax discount. For a Government that says it wants a fair go for working people and to tackle intergenerational inequality, this inquiry offers something rare in politics: a clear, responsible pathway to act.

The question is no longer whether the CGT discount is a problem, it’s whether the government chooses to do anything about it.

The discount is a textbook example of a system tilted toward the ultra-wealthy. It rewards speculation over work, and entrenches advantage for those who already own assets.

A worker earning their income through wages can pay roughly twice the tax of someone making the same amount through capital gains. Younger Australians face higher housing costs and heavier tax burdens, while wealth continues to accumulate at the top.
That outcome runs directly counter to Labor’s stated values.

The government’s own data shows how the benefits overwhelmingly favour older and wealthier Australians. An eye-watering 54% of the benefit flows to the top one per cent of income earners, and 75% of the benefit goes to people over 50. In the last year alone, $12.7 billion was handed to those already at the top. This is not a tax break that supports everyday Australians. It overwhelmingly favours the wealthiest and the oldest, while younger and poorer Australians receive next to nothing.

Labor cannot credibly say there is no money to help renters, ease cost-of-living pressures or invest in essential services, while continuing to hand out billions each year in tax breaks to wealthy property investors. Those two positions cannot sit together.

Housing is where the damage is most visible. The capital gains tax discount pushes investor demand into existing homes, driving up prices and crowding out first home buyers. Around 92% of investor lending goes to existing housing rather than new supply. Winding back this concession would ease speculative pressure and give renters and first home buyers a fairer chance, without removing a single home from the market.

This issue goes to the heart of who the economy is designed to serve.

Right now, the system makes it easier to buy a fifth property than a first. Renters are expected to absorb unlimited rent increases while property speculators receive generous tax concessions. That imbalance is not inevitable. It is the result of political choices.

Importantly, this is not uncharted territory.

Reforming the capital gains tax discount is not untested or extreme.

Economists from across the spectrum, former treasurers, banks and unions have all argued the current settings are too generous. Some support a return to inflation-adjusted capital gains. Others back a reduced discount. The common ground is clear. It’s time for change.

That is why this inquiry matters. We will use it to build the pressure needed to move Labor’s position. As the hearings unfold, the path forward will become increasingly obvious.

If Labor is serious about fairness, intergenerational equity and fixing the housing crisis, reforming the capital gains tax discount is not a radical shift.

This inquiry exists to put the evidence on the record and force an honest reckoning with the most unfair tax break in the country.

whiteknight wrote on Jan 23^rd, 2026 at 10:37am:

Right now, the system makes it easier to buy a fifth property than a first.

So explain to us mere mortals how a capital gains discount rate helps an owner buy a fifth property. ::)

lee wrote on Jan 23^rd, 2026 at 12:01pm:

whiteknight wrote on Jan 23rd, 2026 at 10:37am: Right now, the system makes it easier to buy a fifth property than a first. So explain to us mere mortals how a capital gains discount rate helps an owner buy a fifth property. ::)

(Google, in a discussion about negative gearing):

Long-Term Strategy: The primary, long-term goal is to hold the asset until its value appreciates enough that the capital gain upon selling covers the accumulated losses, often combined with a 50% discount on capital gains tax (if held for over 12 months).

ie CGT and NG together incentivize increasing investment (by an individual)  in housing, over the long term.

McKim should be looking at both tax rorts which will soon cost more than the age pension.   

Speaking of unaffordable housing for first home buyers:

(Daily Mail)

Why the Liberals are furious over Pauline Hanson's lunch with Gina Rinehart

Three high-profile fund managers who once backed the Liberal Party have donated a combined $300,000 to Pauline Hanson's One Nation after being enticed by an offer from Gina Rinehart to attend a private dinner with US President Donald Trump.

Mr Aitken said One Nation's stronger conservative identity is drawing in disillusioned Liberal voters.

'The Liberals are too focused on chasing back inner-city teal seats with middle-of-the-road policies, rather than appealing to hardworking suburban Australians who are being smashed by the government on everything from housing to energy costs,' Aitken told The Australian.

'That's why One Nation is winning over so many former lifelong Liberal voters as the party of common sense. I won't be donating another dollar to the federal Liberal Party,' he said.

Of course he and Rinehart are one on net-zero and immigration, ie, the despised "middle-of-the-road policies" still in favour with half of Liberal party voters.

But as for billionaires like Aitken and Rinehart - and populist RW parties like Pauline's ON, don't hold your breath waiting for them to fix "everything from housing to energy costs", given their only policy is lower taxes, and tax discounts for the wealthy...  and reduced government spending.

The sad part is Labor and the Greens - as well as the Libs - are losing votes to the populist Right, because mainstream Neoclassical economics is dysfunctional.

thegreatdivide wrote on Jan 23^rd, 2026 at 4:05pm:

(Google, in a discussion about negative gearing): Long-Term Strategy: The primary, long-term goal is to hold the asset until its value appreciates enough that the capital gain upon selling covers the accumulated losses, often combined with a 50% discount on capital gains tax (if held for over 12 months). ie CGT and NG together incentivize increasing investment (by an individual)  in housing, over the long term.

And nothing about it helping fund fifth houses or even second, third, fourth. ::)

lee wrote on Jan 23^rd, 2026 at 4:46pm:

thegreatdivide wrote on Jan 23rd, 2026 at 4:05pm: (Google, in a discussion about negative gearing): Long-Term Strategy: The primary, long-term goal is to hold the asset until its value appreciates enough that the capital gain upon selling covers the accumulated losses, often combined with a 50% discount on capital gains tax (if held for over 12 months). ie CGT and NG together incentivize increasing investment (by an individual)  in housing, over the long term. And nothing about it helping fund fifth houses or even second, third, fourth. ::)

 

You don't understand incentive?

Meanwhile, what policies can you suggest to Pauline (who is soaring the polls) to help her fix the housing and cost of living mess?   

Quote:

Labor cannot credibly say there is no money to help renters, ease cost-of-living pressures or invest in essential services, while continuing to hand out billions each year in tax breaks to wealthy property investors. Those two positions cannot sit together.

What a smacking joke, who wrote this piece of crap.

Handing out billions in tax breaks each year, the government do no such thing. The government take in billions from CGT and 95% of it comes from older people. Of course older people have an advantage over young people, they have been working for 20+ years more than them and have saved and gained experience to enable them to accumulate more.

Earning your money from capital gains is completely different to earning your money from wages. Take away capitol gains on property and rents would drop, yes drop, investors would be attracted to investing in property if there wasn't a massive CGT bill waiting at the end. Taxes don't bring down prices, they push prices up and guess who wears the responsibility of those prices.

thegreatdivide wrote on Jan 23^rd, 2026 at 5:11pm:

You don't understand incentive?

Yes. What is the incentive that the CGT discount offers for multiple tenancies?

You must have an explanation. ::)

lee wrote on Jan 23^rd, 2026 at 5:34pm:

thegreatdivide wrote on Jan 23rd, 2026 at 5:11pm: You don't understand incentive? Yes. What is the incentive that the CGT discount offers for multiple tenancies? You must have an explanation. ::)

Its not even a discount, that is political talk. When people pay CGT its taking a part of what they own not what anyone else owns.

lee wrote on Jan 23^rd, 2026 at 5:34pm:

thegreatdivide wrote on Jan 23rd, 2026 at 5:11pm: You don't understand incentive? Yes. What is the incentive that the CGT discount offers for multiple tenancies? You must have an explanation. ::)

I will explain it, when you explain what policies you will offer Pauline, to fix the housing and cost of living crisis which Reinhart and her billionaire mates  say they will fix, by supporting One Nation. 

thegreatdivide wrote on Jan 23^rd, 2026 at 5:57pm:

I will explain it, when you explain what policies you will offer Pauline, to fix the housing and cost of living crisis which Reinhart and her billionaire mates  say they will fix, by supporting One Nation.

Who said anything about me supporting Pauline dumbo. I don't offer policies to politicians especially, but also people in general. They only hear the bit they want to hear, ignore the rest. And if anything happens they say "your fault".

So your explanation is? ::)

thegreatdivide wrote on Jan 23^rd, 2026 at 5:57pm:

lee wrote on Jan 23rd, 2026 at 5:34pm: thegreatdivide wrote on Jan 23rd, 2026 at 5:11pm: You don't understand incentive? Yes. What is the incentive that the CGT discount offers for multiple tenancies? You must have an explanation. ::) I will explain it, when you explain what policies you will offer Pauline, to fix the housing and cost of living crisis which Reinhart and her billionaire mates  say they will fix, by supporting One Nation.

What have you got to lose, lib & lab put you in this position, they got us to this point. You explain how you have a better policies?.

lee wrote on Jan 23^rd, 2026 at 6:05pm:

thegreatdivide wrote on Jan 23rd, 2026 at 5:57pm: I will explain it, when you explain what policies you will offer Pauline, to fix the housing and cost of living crisis which Reinhart and her billionaire mates  say they will fix, by supporting One Nation. Who said anything about me supporting Pauline dumbo. I don't offer policies to politicians especially, but also people in general. They only hear the bit they want to hear, ignore the rest. And if anything happens they say "your fault". So your explanation is? ::)

McKim correctly implied it's easier for people who already have sufficient equity in housing to buy another house,  than for a first home buyer, in the current overpriced housing market, given NG (which The Greens also rightly condemn) and CGT discount rate which encourages investment in housing.

So you don't support Pauline....who do you support, to ensure all Aussies can access housing as promised by Pauline?

Or - if you don't support ANY party, what is YOUR policy to house everyone in Oz?

Leroy wrote on Jan 23^rd, 2026 at 6:08pm:

thegreatdivide wrote on Jan 23rd, 2026 at 5:57pm: lee wrote on Jan 23rd, 2026 at 5:34pm: thegreatdivide wrote on Jan 23rd, 2026 at 5:11pm: You don't understand incentive? Yes. What is the incentive that the CGT discount offers for multiple tenancies? You must have an explanation. ::) I will explain it, when you explain what policies you will offer Pauline, to fix the housing and cost of living crisis which Reinhart and her billionaire mates  say they will fix, by supporting One Nation.  What have you got to lose, lib & lab put you in this position, they got us to this point. You explain how you have a better policies?.

Simple: rebuild Oz's public housing stock, which was abandoned after the Thatcherite small government/privatization policies adopted after the 80s.

This will also prevent the endless housing and rental price spiral which must end badly if unchecked.

Note: the currency-issuing federal government can actually rebuild public housing at no cost to taxpayers - see the MMT thread - but Neoclassical economists are determined to preserve the 'holy writ' according to the private enterprise market economy.

thegreatdivide wrote on Jan 25^th, 2026 at 10:48am:

McKim correctly implied it's easier for people who already have sufficient equity in housing to buy another house,  than for a first home buyer, in the current overpriced housing market, given NG (which The Greens also rightly condemn) and CGT discount rate which encourages investment in housing.

So the CGT discount, which operates when a property is sold, has nothing to do with having enough equity. That equity must be positive, their income must be positive to pay the loan, and not rely solely on rental income. ::)

lee wrote on Jan 27^th, 2026 at 12:45pm:

thegreatdivide wrote on Jan 25th, 2026 at 10:48am: McKim correctly implied it's easier for people who already have sufficient equity in housing to buy another house,  than for a first home buyer, in the current overpriced housing market, given NG (which The Greens also rightly condemn) and CGT discount rate which encourages investment in housing. So the CGT discount, which operates when a property is sold, has nothing to do with having enough equity. That equity must be positive, their income must be positive to pay the loan, and not rely solely on rental income. ::)

Er....you are ignoring  the fact equity of those already fortunate enough to have owned (or be buying) a house has increased remarkably over the last three
decades, courtesy of rising house prices during that period, outstripping average wages by a wide margin.

Hence the current intergenerational inequity which NG and CGT discount are making worse; indeed its easier for asset-rich rent-seekers to buy a 5th house, than for average wage earners who are not asset rich.

Labor is tackling generational inequality - they are making great strides at a a rapid pace in completing the restoration of neo-Fuedalism and the utter subjugation of the'masses'.

Every Single Policy Thrust is working towards that end....

It is not only the Parties that are the direct cause of this with their mass imigration, tax cuts and concessions every which way for 'investors' - the banks are complicit as well due to their lending policies and the travesty of somehow seeing 'equity' in a property just purchased ... REAL equity does not develop until such time as the market has actually given that property a rise in true value - what the banks are doing for investors - killing off the hope of a home for families and reducing Australia to an overwhelmingly renting group like some poor country - is viewing 'equity' as the FUTURE POSSIBLE RISE in value of that property.

It is frankly insane and a roller coaster runaway train that the banks and the governments have now tied themselves to and cannot let go of the tiger's tail ...... if they do collapse is the only future they have.

THAT is why they are enforcing mass immigration to keep their balls rolling (and they should be rolling on the scaffold) and are retaining the ludicrous policy idea that 'investment provides housing' when it clearly does not ... and still giving concession after concession to investors over home owners, who get nothing but bills.

A home owner doesn't get the cost of maintenance and upkeep and renos and interest etc off his tax - like everything else - Joe and Jo Bloggs pay for it all, and that is so wrong and clearly unbalanced in that it gives to one 'legal entity' one set of rules and to another a completely different set of rules.

Abolish concessions for property investment NOW!

Sir Grappler Truth Teller OAM wrote on Jan 27^th, 2026 at 1:55pm:

Labor is tackling generational inequality - they are making great strides at a a rapid pace in completing the restoration of neo-Fuedalism and the utter subjugation of the'masses'.

Labor isn't tackling intergenerational inequality, but at least Labor has legislated higher wages for low income workers, and made the stage-3 tax cuts more progressive (ie benefitting lower income groups).


Quote:

Every Single Policy Thrust is working towards that end....

But you refuse to acknowledge the Conservatives would increase inequity, with their usual 'don't tax the rich' taxation policies.   


Quote:

It is not only the Parties that are the direct cause of this with their mass imigration, tax cuts and concessions every which way for 'investors'

Wow - a correct statement from you, let's see how far you can go before getting lost in 'sovereign citizen'/personal responsibility ideology...


Quote:

- the banks are complicit as well due to their lending policies and the travesty of somehow seeing 'equity' in a property just purchased ... REAL equity does not develop until such time as the market has actually given that property a rise in true value - what the banks are doing for investors - killing off the hope of a home for families and reducing Australia to an overwhelmingly renting group like some poor country - is viewing 'equity' as the FUTURE POSSIBLE RISE in value of that property.

Cor blimey, you are STILL analyzing the situation correctly...given goverments are committed to ever-rising house prices, to ensure house owners and mortgagees - 60% of the population - are able to maintain positive equity.


Quote:

It is frankly insane and a roller coaster runaway train that the banks and the governments have now tied themselves to and cannot let go of the tiger's tail ...... if they do collapse is the only future they have.

Yep.


Quote:

THAT is why they are enforcing mass immigration to keep their balls rolling (and they should be rolling on the scaffold) and are retaining the ludicrous policy idea that 'investment provides housing' when it clearly does not ... and still giving concession after concession to investors over home owners, who get nothing but bills.

Yep.


Quote:

A home owner doesn't get the cost of maintenance and upkeep and renos and interest etc off his tax - like everything else - Joe and Jo Bloggs pay for it all, and that is so wrong and clearly unbalanced in that it gives to one 'legal entity' one set of rules and to another a completely different set of rules. Abolish concessions for property investment NOW!

Well blow me down, you managed it all the way to the end without error.

Well done.

But given the current overpriced housing market, what is your proposal to ensure housing for everyone in Oz, as Menzies achieved even in the high-immigration post-WW2 era? 

(Hint: he presided over a period of large-scale  public housing...courtesy of Keynesian deficit spending).   

thegreatdivide wrote on Jan 27^th, 2026 at 1:53pm:

Er....you are ignoring  the fact equity of those already fortunate enough to have owned (or be buying) a house has increased remarkably over the last three decades, courtesy of rising house prices during that period, outstripping average wages by a wide margin.

No. You expected prices to go down, long-term? And nothing to do with CGT discount.


thegreatdivide wrote on Jan 27^th, 2026 at 1:53pm:

Hence the current intergenerational inequity which NG and CGT discount are making worse; indeed its easier for asset-rich rent-seekers to buy a 5th house, than for average wage earners who are not asset rich.

You haven't even made a case for the effect of CGT. ::)

lee wrote on Jan 27^th, 2026 at 3:31pm:

thegreatdivide wrote on Jan 27th, 2026 at 1:53pm: Er....you are ignoring  the fact equity of those already fortunate enough to have owned (or be buying) a house has increased remarkably over the last three decades, courtesy of rising house prices during that period, outstripping average wages by a wide margin. No. You expected prices to go down, long-term?

Are you asking me a question?

The answer is no, it's obvious prices will only go down enough to make houses affordable for first-home buyers on average wages, either in a general economic crisis (like the GFC...but then unemployment will decapitate first home buyers), or if government rebuilds public housing, while discouraging high-equity, rent-seeking investors to buy multiple houses by removing NG and CGT discounts.   



Quote:

And nothing to do with CGT discount.

That's not what bank lenders who want to lend as much money as possible think, they see the CGT discount as added insurance on the loan if the borrower has to sell a property. 



Quote:

You haven't even made a case for the effect of CGT. ::)

See above; and meanwhile you are too incompetent to offer ANY polcies to solve the current housing crisis.

Looks like we will have to wait for some suggestions from grappler......

thegreatdivide wrote on Jan 27^th, 2026 at 4:42pm:

lee wrote on Jan 27th, 2026 at 3:31pm: thegreatdivide wrote on Jan 27th, 2026 at 1:53pm: Er....you are ignoring  the fact equity of those already fortunate enough to have owned (or be buying) a house has increased remarkably over the last three decades, courtesy of rising house prices during that period, outstripping average wages by a wide margin. No. You expected prices to go down, long-term? Are you asking me a question? The answer is no, it's obvious prices will only go down enough to make houses affordable for first-home buyers on average wages, either in a general economic crisis (like the GFC...but then unemployment will decapitate first home buyers), or if government rebuilds public housing, while discouraging high-equity, rent-seeking investors to buy multiple houses by removing NG and CGT discounts.    Quote: And nothing to do with CGT discount. That's not what bank lenders who want to lend as much money as possible think, they see the CGT discount as added insurance on the loan if the borrower has to sell a property.  [quote]You haven't even made a case for the effect of CGT. ::)

See above; and meanwhile you are too incompetent to offer ANY polcies to solve the current housing crisis.

Looks like we will have to wait for some suggestions from grappler......


[/quote]

Banks do not, I REPEAT DO NOT take the CGT in to consideration for anything to do with the value of a home or acceptance of a loan. I don't know where you got that from but someone has given you false information.

The other important thing you are overlooking is that the cheapest way to buy a home is to build your own, taking the investor out of the market will not I REPEAT WILL NOT reduce the cost of housing in any way. It will cost the same to build a house if not more by taking out the investors.

Incredible evasion down there about how people cannot get into the market...  maybe this will put a little chili on your posterior:-

https://www.msn.com/en-au/money/markets/great-aussie-home-ownership-dream-aging-as-banks-see-more-first-time-buyers-above-40/ar-AA1UTNmJ?ocid=winp2fptaskbar&cvid=7608cdf042934386dceca9c5515a4660&ei=19

Great Aussie home ownership dream aging as banks see more first-time buyers above 40

Despite saving for the best part of seven years, Maddy has given up on the prospect of buying a home in Australia.

The healthcare worker from Melbourne, who has asked to only share her first name, went to 70 inspections last year, and made three offers, only for the homes to sell for more than $100,000 above asking price.

"Even with a really healthy deposit, because the prices have increased so substantially so quickly, to put myself in that level of debt, I'd have to borrow, I guess the maximum that I'm allowed."

The average age to purchase your first home has risen as salaries struggle to keep up with soaring house prices — statistics compiled by the Australian Institute of Health and Welfare show a lower portion of young people owning homes.

Maddy, who is 30-years-old, told the ABC she isn't comfortable with taking out that amount of debt to service a mortgage, and has made the decision to instead move overseas in the coming years to start a family."

.... more.. read for yourself lazy-bones....

Sir Grappler Truth Teller OAM wrote on Jan 27^th, 2026 at 5:24pm:

Incredible evasion down there about how people cannot get into the market...  maybe this will put a little chili on your posterior:- https://www.msn.com/en-au/money/markets/great-aussie-home-ownership-dream-aging-as-banks-see-more-first-time-buyers-above-40/ar-AA1UTNmJ?ocid=winp2fptaskbar&cvid=7608cdf042934386dceca9c5515a4660&ei=19 Great Aussie home ownership dream aging as banks see more first-time buyers above 40 Despite saving for the best part of seven years, Maddy has given up on the prospect of buying a home in Australia. The healthcare worker from Melbourne, who has asked to only share her first name, went to 70 inspections last year, and made three offers, only for the homes to sell for more than $100,000 above asking price. "Even with a really healthy deposit, because the prices have increased so substantially so quickly, to put myself in that level of debt, I'd have to borrow, I guess the maximum that I'm allowed." The average age to purchase your first home has risen as salaries struggle to keep up with soaring house prices — statistics compiled by the Australian Institute of Health and Welfare show a lower portion of young people owning homes. Maddy, who is 30-years-old, told the ABC she isn't comfortable with taking out that amount of debt to service a mortgage, and has made the decision to instead move overseas in the coming years to start a family." .... more.. read for yourself lazy-bones....

Yeah I don't know how that sits with most Australians, she is thirty and can't buy a home in the most expensive part of the most expensive city so she is going to move overseas.

Don't think that resonates with most young Australians. A bit of a beat up story to make news out of nothing.

thegreatdivide wrote on Jan 27^th, 2026 at 4:42pm:

The answer is no, it's obvious prices will only go down enough to make houses affordable for first-home buyers on average wages, either in a general economic crisis (like the GFC...but then unemployment will decapitate first home buyers), or if government rebuilds public housing, while discouraging high-equity, rent-seeking investors to buy multiple houses by removing NG and CGT discounts.

Tradies are the workers that build the houses. Are you now saying they should not charge their going rate? Doesn't that make them third class citizens?


thegreatdivide wrote on Jan 27^th, 2026 at 4:42pm:

That's not what bank lenders who want to lend as much money as possible think, they see the CGT discount as added insurance on the loan if the borrower has to sell a property.

Nope. you have your hand in your shorts as usual.  Banks look at a person's tax return. There is not CGT in that, unless they have sold something. Banks prudently look at capacity to pay. A future mortgagee sale based on any supposed CGT discount would be disastrous. ::)