Recent analysis by the Parliamentary Budget Office, requested for a Senate inquiry, reveals that the 50 percent capital gains tax (CGT) discount is projected to cost the federal budget a staggering $247 billion over the next decade. This amount marks a significant increase from the current financial year’s cost of $21 billion.
Since its inception in 1999 during the Howard government’s tenure under then-Treasurer Peter Costello, the CGT discount has already amounted to $205 billion. The upcoming expense surpasses this historical figure.
The Australian Financial Review reports that the federal government is contemplating major tax reforms as the May federal budget approaches. Although details remain unconfirmed, senior Labor officials have not dismissed the possibility of such changes this week.
Treasurer Jim Chalmers has emphasized the government’s commitment to addressing intergenerational inequality as part of its economic strategy.
Previously, the Albanese administration avoided altering tax concessions for property investors, especially after Labor’s 2019 election defeat, which followed their campaign to reduce both the CGT discount and negative gearing.
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