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.

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


(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.   

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


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

Quote:


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.

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


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.

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



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?

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


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?

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


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.