Updated: Prime Minister Anthony Albanese has put the kibosh on any suggestions that his government will be removing concessions associated with capital gains tax (CGT).
Mr Albanese was responding to claims made by shadow treasurer Angus Taylor that the government’s proposed change to tax concessions for those with more than $3 million in super would be “the start of a slippery slope”, which could include a winding back of CGT tax concessions.
The PM, speaking on ABC Radio National’s Breakfast program, was emphatic in his denial, invoking a phrase reminiscent of former Liberal PM Tony Abbot’s comment on any future leadership plans in 2016. At the time Mr Abbott described his ambitions as: “Dead, buried, cremated.”
Mr Albanese dismissed possible CGT changes with similar veracity: “We are not going to impact the family home, full stop exclamation mark.
“It’s a bad idea … we will not be making any changes there.”
Of course, politicians have a reputation for failing to keep promises, so is there a possibility that Labor could wiggle its way around Mr Albanese’s seemingly categoric assurance?
Treasury data shows that, of the almost $72 billion that Australia’s various CGT exemptions cost annually, $48 billion is on exemptions for the family home. In theory that leaves $24 million that could be saved by removing exemptions that do not target the main family residence.
And there are members of parliament who believe that housing concessions should remain untouchable. Independent senator David Pocock has proposed capping the number of investment properties eligible for negative gearing tax concessions at one or two.
Last November, Greens MP Max Chandler-Mather was scathing of the number of concessions last year’s federal government offered to the wealthy.
“In the middle of one of the worst housing crises in our country’s history, the Federal Budget includes $157 billion worth of tax concessions to property investors, 56 per cent of which will go entirely to the top 10 per cent of income earners,” he said.
“When it comes to capital gains tax discounts, I have no idea how Labor justifies a tax concession that will see 85 per cent of the benefit flowing to the top 10 per cent of income earners.”
While Mr Pocock’s proposed cap would leave the family home out of the equation, it’s unlikely it would ever get majority support in parliament.
Chris Richardson, an independent media commentor on economic trends, says that even though housing tax breaks cost the government more in forgone revenue, the political cost of scaling back negative gearing and CGT discounts for the wealthy would likely be greater.
It’s much safer to target superannuation concessions. “It’s reasonable policy but it’s also populist policy,” he said.
So, on balance, there is little chance the Albanese government will be making any alterations to CGT concessions in the foreseeable future, and the likelihood of any such changes targeting the family home appears low.
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Also read: Treasurer caps super tax breaks for accounts with more than $3 million