Paul Keating has stepped forward to defend the federal government’s tax reform, issuing a sharp critique that the opposition has quickly dismissed as “nonsense.”
Keating remarked, “When Jim Chalmers proposes a policy to equalize the taxation of capital gains with income taxes, the cries for maintaining preferential treatment become loud.”
He emphasized that “the reality is income is overtaxed while capital enjoys lighter taxation.”
Opposition Leader Angus Taylor dismissed Keating’s comments as “more nonsense from Paul Keating.”
“Naturally, Paul Keating supports this, but I won’t take advice from someone who labels integrating Australian values into our immigration policy as racist,” Taylor told reporters earlier today.
Nationals Senator Bridget McKenzie commented on Today, “It’s telling when Paul Keating is rolled out to defend your budget.”
Keating’s support comes as the government faces an onslaught more than a week after handing down the federal budget.
Chalmers told reporters yesterday there has been “misinformation” about the budget.
“The four existing concessions and carve-outs for small business in the CGT system will remain, and people like our political opponents who want to make up things about our changes don’t acknowledge that, but they should,” he said. 
The treasurer has also been reiterating that there is a one-year grace period before the CGT changes come into effect, consultation with the start-up sector and support for businesses who want to restructure their discretionary trust to a fixed trust.
The last time the capital gains tax was altered was when the Howard government introduced the 50 per cent discount.
Keating, in his statement, said Howard and his treasurer, Peter Costello, made a significant mistake by introducing the discount.
“Housing prices took off dramatically from the moment Howard and Costello introduced the 50 per cent discount in 1999,” he said.
“Yet wealthy people are out there now arguing against the government’s change notwithstanding the stark evidence of the price shock Howard and Costello induced.”
Keating concluded his statement by saying the current government is seeking to arrest the distortion that has made housing unaffordable for an entire generation. 
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