The Federal Government’s capital gains tax overhaul has drawn immediate fire from the Financial Services Council. CEO Blake Briggs spoke live with The Wire‘s Patrick Dunstan from Parliament House on Budget night, warning the changes risk pushing investors offshore.
Read on for analysis
The Federal Government has framed its capital gains and negative gearing changes as a fairness fix. The reality is more complicated.
Scrapping the fifty percent CGT discount sounds reasonable on paper. Wealthy investors paying a fairer share of tax on their returns. But the knock-on effect is a weakened incentive to park capital in Australian assets over the long term. When the return on domestic investment shrinks relative to offshore alternatives, the risk is that capital follows. That’s not ideology, it’s arithmetic.
Negative gearing is the same story. The politics are easy: landlords using tax losses to outbid first home buyers makes for a clean villain. But rental markets don’t reset cleanly when investors leave. The effect on rental supply is genuinely uncertain, and the Government’s own modelling doesn’t fully resolve it. The people meant to benefit may find the relief doesn’t reach them.
The Government points to its own modelling, with seventy-five thousand new homes unlocked as investors exit and owner-occupiers move in. That number deserves scrutiny. It assumes a clean transfer of stock from buyers to sellers, in the right locations, at the right price. Housing markets don’t work that way.
What’s missing from the Government’s case is an honest account of those trade-offs. A fairer tax system is a legitimate goal, but fairness at the top of the income scale doesn’t automatically translate into relief at the bottom, especially in a housing market already under severe supply pressure.
The Government calls this the most ambitious tax reform in twenty-six years. But look at where the money actually goes. The CGT changes raise serious revenue from 2027 onwards, with no corresponding commitment to use it for structural reform (cutting income tax, funding social housing at scale, or actually addressing housing supply). Treasurer Jim Chalmers himself said these were difficult decisions to ensure a stronger bottom line every year and greater insurance in uncertain times. That’s budget consolidation language, not reform language. The Government has used the political cover of the”intergenerational equity” argument to raise revenue it intends to bank, not use. That gap between the rhetoric and the reality is where the real story of this budget lives.
Image: 2SER Image
Produced By: Patrick Dunstan
First aired on The Wire, Wednesday 13 May 2026