Jim Chalmers has declined to detail exactly how the government intends to resolve its so-called “widow tax”, despite being pressed several times for clarity during a live television interview.
The Treasurer faced repeated questioning from ABC Insiders host David Speers on Sunday, following a week of criticism directed at the Albanese government over proposed changes to capital gains tax and negative gearing.
The legislation would abolish the 50 per cent capital gains tax (CGT) discount and restrict negative gearing concessions to newly built homes.
Current investment properties would be grandfathered, meaning existing owners would be shielded from the new rules and allowed to keep using the previous tax benefits.
Independent senator David Pocock warned that those grandfathered protections could disappear when an owner dies, because the property may be treated as a fresh acquisition once passed to a surviving spouse, forcing them onto the revised tax arrangements.
The Albanese government has promised to amend the bill to address the “widow tax” issue, which could also have caught divorcees, prompting Speers to ask Chalmers how the government would guarantee the fix.
“We’ll make that clear in the legislation that follows,” Chalmers responded.
Speers then pressed him again, asking whether a person who loses their partner in the coming weeks would still be able to claim negative gearing.
The Treasurer was grilled about the the ‘widow tax’ by ABC Insiders host David Speers on Sunday
‘We’ve made it really clear that we’re going to address that concern,’ Chalmers replied.
‘I don’t want to pre-empt the outcome.’
He confirmed the current system treats such cases as a new acquisition but insisted the government would intervene.
‘The current tax system has arrangements which say that that is an acquisition,’ he said.
‘But we’ve said we’re going to change that.’
Despite those assurances, Chalmers stopped short of clarifying what applies in the meantime.
‘Nobody has to stop negatively gearing until July 1, 2027,’ he said.
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‘I’m not going to provide advice to individuals.’
Chalmers (pictured) said the government would change the ‘widow tax’ in further legislation
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Speers noted the lack of clarity for Australians making immediate financial decisions.
‘They hear you say you’ll address it, but they don’t hear you say how,’ he said.
‘We will address it, if you prefer, we will fix it, and we’ll make clear how in subsequent legislation,’ Chalmers said.
Speers questioned why the government rushed the legislation through Parliament in just six weeks, despite the measures not taking effect until July 2027.
Chalmers defended the approach as necessary to provide certainty.
‘We’re very grateful for the support of the Parliament, David, because it means that we’re cutting taxes for workers, making it easier for first home buyers, and making the tax system fairer,’ he said.
‘It’s not unusual for the core elements of big tax reform to be legislated first.’
‘Our objective here was to provide certainty for investors and others about the core elements of this tax package,’ he added.
‘We’ve legislated the core elements quickly because we want to provide that level of certainty.’
