Former prime minister Paul Keating has called on the Albanese government to resist exemptions to its planned capital gains tax (CGT) changes, warning that carving out commercial assets would further distort the economy. In an exclusive interview, Keating described the proposed shift from a 50% discount to an inflation-based model as 'so marginal that no entrepreneurial initiative is likely to be thwarted.'
The changes, announced in this month's federal budget, aim to redirect investment away from housing and into productive assets. Keating, who served as prime minister from 1991 to 1996, said the current CGT settings, in place since 1999, had 'had a major and deleterious impact on investment and with it productivity.' He argued that correcting the balance between capital and labour taxation should remain 'the overriding objective of policy.'
Treasurer Jim Chalmers has echoed these concerns, warning that the Howard-era changes overcompensated investment in established housing. However, the reforms have faced fierce opposition from investors and entrepreneurs. Lachlan Harris, a former adviser to Kevin Rudd and co-founder of Budgy Smuggler, has led the charge, urging startups to 'pick up the phone, speak to the media, and get your voice heard.'
The Coalition has pushed back on the timeline, insisting the changes do not need to be rushed before the winter break. Shadow treasurer Tim Wilson said the opposition would use 'maximum leverage' to scrutinise the plans, while a possible deal between the Greens and the Coalition could lead to Senate inquiries. The legislation also includes changes to negative gearing, a $1,000 standard tax deduction, and a new $250-a-year tax offset for workers.
