Australia’s Albanese government considers capital gains tax reforms, housing exemptions, and NDIS changes
Consensus Summary
Australia’s Labor government under Prime Minister Anthony Albanese is actively considering reforms to the capital gains tax (CGT) discount, which currently offers a 50% reduction for assets held over one year. The changes aim to address rising inequality by reducing incentives for capital income over labor income, as highlighted by financial journalist Alan Kohler and supported by submissions to a Senate inquiry. Key discussions focus on exempting new homes from CGT changes to avoid chilling housing supply, with the Business Council of Australia advocating for this approach. The McKell Institute proposed a tiered system (70% discount for new homes, 35% for old), estimating it could boost housing supply by 130,000 units by 2030. Treasurer Jim Chalmers has framed the 2026-27 budget as a potential 'tax reform budget,' though decisions are delayed due to geopolitical uncertainty. Meanwhile, the government faces pressure from One Nation and crossbench senators, with Greens Senator Nick McKim urging bold reforms to reduce inequality. The Albanese government has also signaled potential adjustments to the NDIS, though details remain unclear and state leaders resist funding shifts for mild autism support.
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Key details reported by multiple sources:
- Anthony Albanese confirmed the government is mulling policy changes beyond housing supply, including potential capital gains tax (CGT) reforms, amid pressure from One Nation and rising inequality concerns.
- The current 50% CGT discount for assets held over one year is widely discussed as a potential target for reform, with financial journalist Alan Kohler stating it is 'more than it needs to be to adjust for inflation' and contributes to inequality by favoring capital income over labor income.
- Treasurer Jim Chalmers described the 2026-27 budget as potentially a 'tax reform budget' and hinted at changes to the CGT system, though the final decision is delayed due to uncertainty from the Middle East war.
- The Business Council of Australia urged the government to exempt new homes from any CGT scaling back to avoid disincentivizing housing investment.
- The McKell Institute proposed a CGT reform model with a 70% discount for new homes and 35% for old homes, estimating it would boost housing supply by 1.2% (130,000 extra homes by 2030) and be grandfathered for existing properties.
- The Albanese government has previously proposed changes to negative gearing (2016 and 2019) but avoided retrospective application or targeting new housing to prevent weakening investment.
- The Senate Select Committee on the Operation of the Capital Gains Tax is currently probing potential changes to housing tax arrangements, with submissions from stakeholders like the Business Council of Australia and Alan Kohler.
Points of Difference
Details reported by only one source:
- Albanese ruled out means-testing for the NDIS, stating eligibility should be based on disability, not income, and criticized the expansion of NDIS support to children with mild autism under the Thriving Kids program, which faces resistance from state leaders.
- The Liberal-chaired Senate inquiry is probing housing tax arrangements, with Alan Kohler arguing the current CGT system increases demand for property by allowing investors to pay more.
- Albanese emphasized economic resilience and social cohesion as key goals, linking housing supply to young Australians' stake in the economy.
- Cabinet is close to finalizing a decision on CGT changes, with a focus on differential treatment for new vs. old homes to avoid undermining housing supply arguments.
- Independent economist Chris Richardson stated that while he prefers broader tax reform, distinguishing new homes from old is 'an improvement on what we have' and would likely avoid a 'tax grab' tag due to grandfathering.
- The McKell Institute’s proposal was described as an 'unofficial kite-flying exercise' to explore options, with Treasury officials estimating CGT changes would have minimal effect on supply depending on design.
Contradictions
Conflicting information between sources:
- Article 1 states Albanese 'flagged the prospect of boosting spending on incentives for state and territory governments to achieve housing targets,' while Article 3 does not mention this specific incentive spending.
- Article 1 claims Albanese 'hinted at a potential overhaul of the NDIS scheme,' but Article 2 does not reference NDIS changes at all.
- Article 1 includes a quote from Albanese saying 'You don’t change that by rhetoric and by dividing people, which is what is some of the populist rhetoric,' while Article 2 uses a nearly identical quote without attribution to a specific source.
Source Articles
Albo flags move on controversial Aussie tax
Anthony Albanese has given the strongest indication yet Labor could seek to scrap a controversial housing tax break at next month’s budget.
Huge push to spare housing from feared tax
One type of homes could be spared from tax reforms currently being considered by the Albanese government.
Labor considering ways to spare new homes from capital gains changes
The possible budget centrepiece is likely to be finalised much closer to the May deadline than usual this year given global uncertainty, but progress has been made in recent weeks.