Prime Minister Anthony Albanese will introduce controversial changes to negative gearing and capital gains tax (CGT) to parliament on Thursday, seeking swift passage while signalling possible exemptions for businesses beyond the startup sector. The draft laws include a $1,000 standard tax deduction and a $250 'working Australians tax offset', both pre-election promises, as part of the budget package.
Albanese aims to have the core elements enacted by early July, challenging the Coalition and One Nation to vote against the tax cuts if they oppose the measures. However, internal Labor dissent is expected, with some MPs angry that the budget message has shifted away from intergenerational fairness in housing. One MP suggested that granting carve-outs to early-stage businesses could 'take some heat off'.
The government faces a backlash from investors and startup founders over the CGT changes, which replace the 50% discount with an inflation-based model. Treasurer Jim Chalmers is consulting with the tech sector and business groups. Albanese said rule changes for trust taxation would follow later in the year.
Opposition Leader Angus Taylor pledged to repeal the changes if the Coalition wins the next election, prompting Albanese to challenge him to support the plan. The Greens, who may decide the legislation's fate, labelled the changes as 'tinkering' and called for the $250 offset to be extended to low-income earners below the tax-free threshold.
Housing Minister Clare O'Neil argued that the budget's primary focus is on housing affordability. Independent MP Allegra Spender warned of 'very significant unintended consequences' for businesses if legislation is rushed. The Australian Chamber of Commerce and Industry chief executive Andrew McKellar said carve-outs were insufficient and demanded a full overhaul, stating that taxing investment is counterproductive for productivity.
