Capital Gains Tax Discount Inquiry Launches with Union Criticism
An Australian parliamentary inquiry into capital gains tax will commence hearings on Monday, with union officials and prominent economists scheduled to present evidence. The focus is on the controversial 50% discount on capital gains tax, introduced in 1999 by the Howard government, which applies to investment properties sold after at least one year of ownership.
Union Submission Calls for Major Reduction
In its formal submission to the inquiry, the Australian Council of Trade Unions has advocated for slashing the discount from 50% to just 25%. The ACTU contends this change would enhance equity in the tax system. The union argues that the discount, originally implemented to boost international competitiveness and improve asset management efficiency, has largely failed to achieve these goals over the past 26 years.
'The CGT discount has been a key mechanism allowing the very rich to pay lower effective rates of tax,' the ACTU's submission states. 'The latest Treasury data from December 2025 shows that most of the benefits of the discount are captured by the richest one per cent of Australians.'
Witnesses and Government Stance
Key figures set to testify on the first day include ACTU President Michele O'Neil, veteran trade unionist Bill Kelty, and economist Alan Kohler. The union acknowledges that reducing the discount alone will not fully resolve housing affordability issues but believes it would significantly contribute to addressing systemic problems.
While speculation suggests the federal government may announce changes to the discount in its upcoming May budget, Prime Minister Anthony Albanese has remained non-committal. When questioned, he emphasized the government's focus on tax cuts and housing supply measures.
'What we are doing is tax cuts this July, another tax cut the following July and when it comes to housing, we're doing our best to deal with the supply question,' Albanese told Sky News.
The inquiry will thoroughly examine whether the capital gains tax discount requires modification to better serve economic fairness and housing market stability.
