The tax change that could allow thousands of new homes, ease rental pressure
Research for the Labor-aligned McKell Institute argues that an increase in the current 50 per cent discount on CGT for new units but a reduction for investors who purchase an existing detached house would encourage construction of additional 130,000 homes before 2030.
NSW could get an extra 40,000 homes while Victoria stands to gain up to 33,600 additional properties in a move that would be a stark departure from Labor's 2019 election policy to heavily curtail CGT concessions.
Albanese and Treasurer Jim Chalmers are heading a three-day economic roundtable next month, when tax reform will be one of the key discussion points.
Labor went to the 2019 election with a policy to halve the capital gains tax concession, which had been introduced by the Howard government in the late 1990s in a move that economists say contributed to a surge in house prices, as part of a proposal to also restrict negative gearing to new properties.
But the McKell research shows a larger concession on new builds combined with reduced incentives for investors to buy existing detached homes would both lift the number of new properties while putting downward pressure on rents.
Report co-author Richard Holden, a respected independent economist, said the 1.2 million target would not be met under current tax settings.
'A key problem with our existing tax settings on property is they orient too much investment toward established dwellings at the cost of new supply,' he said.
'There is nothing wrong with the commonly held desire of everyday investors to secure their future by investing in the housing market. But this desire should be harnessed to achieve our national objectives on housing supply.'
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The Advertiser
28 minutes ago
- The Advertiser
'Anchor in a volatile world': Australia, UK draw closer
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Defence Secretary John Healey said the UK's commitment to Australia was "absolute". Mr Healey said his government had taken steps to ensure capacity for the planned SSN-AUKUS class submarines. "We have made a commitment ... in making sure that we have the productive capacity, we have the technology and the designs to be able to deliver our commitments to the SSN-AUKUS and we will," he said. The new boats will be built in Adelaide and delivered in the 2040s. Defence Minister Richard Marles said the inking of the deal would underpin the development of AUKUS. The bilateral treaty will facilitate greater economic co-operation between the two nations by improving both countries' industrial capacity. As part of the existing defence agreement, Australia will pay $5 billion to support British industry to design and produce nuclear reactors to power the future AUKUS-class submarines. Australia is set to be sold least three Virginia-class nuclear-powered submarines from the US in the early 2030s under the $368 billion AUKUS submarine program. But the planned sale of US-built boats has been up in the air since the Trump administration launched a review of the deal to examine whether it aligns with his "America first" agenda. Defence analysts believe a likely outcome of the US review will be a request for more money from Australia to support its submarine industrial base. The UK's Carrier Strike Group, led by the Royal Navy flagship HMS Prince of Wales, arrived in Darwin on Wednesday as Australia hosts Exercise Talisman Sabre. It's the first UK carrier strike group to visit Australia since 1997. The international task group includes five core ships, 24 jets and 17 helicopters, centred on the flagship aircraft carrier. Mr Lammy said the deployment of British troops to the region was a signal of its determination to keep the Indo-Pacific free and open. Mr Marles and Senator Wong will join their UK counterparts in Darwin on Sunday to observe the strike group in action. The UK has declared its ties to Australia are "absolute", vowing it will deliver on its defence commitments as doubt grows over the reliability of the US. A 50-year treaty to underpin the AUKUS security pact will be signed in Geelong on Saturday following talks hosted by Foreign Minister Penny Wong and Defence Minister Richard Marles for their UK counterparts in Sydney. The AUKUS security partnership involves the US, UK and Australia, but the fresh treaty is only between London and Canberra. The treaty shows the UK and Australia are strengthening ties in the face of the Pentagon's yet-to-be-completed AUKUS review. UK Foreign Secretary David Lammy described talks with the Albanese government as "focused and constructive". "It's clear that the UK, Australia relationship is an anchor in what is a very volatile world, providing stability in troubled waters and a relationship that holds steady whichever way the geopolitical winds are blowing," he said. Defence Secretary John Healey said the UK's commitment to Australia was "absolute". Mr Healey said his government had taken steps to ensure capacity for the planned SSN-AUKUS class submarines. "We have made a commitment ... in making sure that we have the productive capacity, we have the technology and the designs to be able to deliver our commitments to the SSN-AUKUS and we will," he said. The new boats will be built in Adelaide and delivered in the 2040s. Defence Minister Richard Marles said the inking of the deal would underpin the development of AUKUS. The bilateral treaty will facilitate greater economic co-operation between the two nations by improving both countries' industrial capacity. As part of the existing defence agreement, Australia will pay $5 billion to support British industry to design and produce nuclear reactors to power the future AUKUS-class submarines. Australia is set to be sold least three Virginia-class nuclear-powered submarines from the US in the early 2030s under the $368 billion AUKUS submarine program. But the planned sale of US-built boats has been up in the air since the Trump administration launched a review of the deal to examine whether it aligns with his "America first" agenda. Defence analysts believe a likely outcome of the US review will be a request for more money from Australia to support its submarine industrial base. The UK's Carrier Strike Group, led by the Royal Navy flagship HMS Prince of Wales, arrived in Darwin on Wednesday as Australia hosts Exercise Talisman Sabre. It's the first UK carrier strike group to visit Australia since 1997. The international task group includes five core ships, 24 jets and 17 helicopters, centred on the flagship aircraft carrier. Mr Lammy said the deployment of British troops to the region was a signal of its determination to keep the Indo-Pacific free and open. Mr Marles and Senator Wong will join their UK counterparts in Darwin on Sunday to observe the strike group in action. The UK has declared its ties to Australia are "absolute", vowing it will deliver on its defence commitments as doubt grows over the reliability of the US. A 50-year treaty to underpin the AUKUS security pact will be signed in Geelong on Saturday following talks hosted by Foreign Minister Penny Wong and Defence Minister Richard Marles for their UK counterparts in Sydney. The AUKUS security partnership involves the US, UK and Australia, but the fresh treaty is only between London and Canberra. The treaty shows the UK and Australia are strengthening ties in the face of the Pentagon's yet-to-be-completed AUKUS review. UK Foreign Secretary David Lammy described talks with the Albanese government as "focused and constructive". "It's clear that the UK, Australia relationship is an anchor in what is a very volatile world, providing stability in troubled waters and a relationship that holds steady whichever way the geopolitical winds are blowing," he said. Defence Secretary John Healey said the UK's commitment to Australia was "absolute". Mr Healey said his government had taken steps to ensure capacity for the planned SSN-AUKUS class submarines. "We have made a commitment ... in making sure that we have the productive capacity, we have the technology and the designs to be able to deliver our commitments to the SSN-AUKUS and we will," he said. The new boats will be built in Adelaide and delivered in the 2040s. Defence Minister Richard Marles said the inking of the deal would underpin the development of AUKUS. The bilateral treaty will facilitate greater economic co-operation between the two nations by improving both countries' industrial capacity. As part of the existing defence agreement, Australia will pay $5 billion to support British industry to design and produce nuclear reactors to power the future AUKUS-class submarines. Australia is set to be sold least three Virginia-class nuclear-powered submarines from the US in the early 2030s under the $368 billion AUKUS submarine program. But the planned sale of US-built boats has been up in the air since the Trump administration launched a review of the deal to examine whether it aligns with his "America first" agenda. Defence analysts believe a likely outcome of the US review will be a request for more money from Australia to support its submarine industrial base. The UK's Carrier Strike Group, led by the Royal Navy flagship HMS Prince of Wales, arrived in Darwin on Wednesday as Australia hosts Exercise Talisman Sabre. It's the first UK carrier strike group to visit Australia since 1997. The international task group includes five core ships, 24 jets and 17 helicopters, centred on the flagship aircraft carrier. Mr Lammy said the deployment of British troops to the region was a signal of its determination to keep the Indo-Pacific free and open. Mr Marles and Senator Wong will join their UK counterparts in Darwin on Sunday to observe the strike group in action. The UK has declared its ties to Australia are "absolute", vowing it will deliver on its defence commitments as doubt grows over the reliability of the US. A 50-year treaty to underpin the AUKUS security pact will be signed in Geelong on Saturday following talks hosted by Foreign Minister Penny Wong and Defence Minister Richard Marles for their UK counterparts in Sydney. The AUKUS security partnership involves the US, UK and Australia, but the fresh treaty is only between London and Canberra. The treaty shows the UK and Australia are strengthening ties in the face of the Pentagon's yet-to-be-completed AUKUS review. UK Foreign Secretary David Lammy described talks with the Albanese government as "focused and constructive". "It's clear that the UK, Australia relationship is an anchor in what is a very volatile world, providing stability in troubled waters and a relationship that holds steady whichever way the geopolitical winds are blowing," he said. Defence Secretary John Healey said the UK's commitment to Australia was "absolute". Mr Healey said his government had taken steps to ensure capacity for the planned SSN-AUKUS class submarines. "We have made a commitment ... in making sure that we have the productive capacity, we have the technology and the designs to be able to deliver our commitments to the SSN-AUKUS and we will," he said. The new boats will be built in Adelaide and delivered in the 2040s. Defence Minister Richard Marles said the inking of the deal would underpin the development of AUKUS. The bilateral treaty will facilitate greater economic co-operation between the two nations by improving both countries' industrial capacity. As part of the existing defence agreement, Australia will pay $5 billion to support British industry to design and produce nuclear reactors to power the future AUKUS-class submarines. Australia is set to be sold least three Virginia-class nuclear-powered submarines from the US in the early 2030s under the $368 billion AUKUS submarine program. But the planned sale of US-built boats has been up in the air since the Trump administration launched a review of the deal to examine whether it aligns with his "America first" agenda. Defence analysts believe a likely outcome of the US review will be a request for more money from Australia to support its submarine industrial base. The UK's Carrier Strike Group, led by the Royal Navy flagship HMS Prince of Wales, arrived in Darwin on Wednesday as Australia hosts Exercise Talisman Sabre. It's the first UK carrier strike group to visit Australia since 1997. The international task group includes five core ships, 24 jets and 17 helicopters, centred on the flagship aircraft carrier. Mr Lammy said the deployment of British troops to the region was a signal of its determination to keep the Indo-Pacific free and open. Mr Marles and Senator Wong will join their UK counterparts in Darwin on Sunday to observe the strike group in action.
Sky News AU
5 hours ago
- Sky News AU
Australians should be ‘very afraid' of the Treasurer's economic roundtable
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West Australian
5 hours ago
- West Australian
Australia, UK solidify AUKUS deal as Pentagon review raised at high-level Australia-UK talks in Sydney
Despite fears the Trump administration could abandon AUKUS, Australia and the UK have pressed ahead, preparing to sign a 50-year agreement they hope will cement the submarine pact. Defence Minister Richard Marles, Foreign Minister Penny Wong, and their UK counterparts John Healey and David Lammy unveiled the new treaty during the annual AUSMIN meeting in Sydney. The Pentagon's review of the trilateral submarine plan had been raised during the high-level talks on Friday, Mr Marles said. Both defence ministers sought to ease concerns, welcoming the still-ongoing review, with Mr Marles cushioning it as 'the most natural thing in the world' for a new government to reassess such a major deal. 'We've welcomed the review, which is being undertaken by the Trump administration. We spoke today about how both of us — both countries — can contribute to the review,' he said. 'When we came to Government back in 2022, we undertook the Defence Strategic Review. When the UK Government came to power, they, in turn, undertook a review. This is a very, very natural step.' Australia had spearheaded the AUKUS pact in 2021 under then-Prime Minister Scott Morrison, after recognising the country needed to rapidly upgrade its defence capabilities. Labor then agreed to continue it. But Mr Trump's return to the White House in January has sparked new doubts over the pricey pact, as Washington slaps controversial tariffs on multiple countries, including close allies UK and Australia. Australia has also been pressured to increase defence spending in line with the NATO agreement for governments to raise their expenditure to 5 per cent of their country's GDP by 2034. While Australia currently spends about two per cent of its GDP on defence — on track to rise slightly above 2.3 per cent by the end of the decade — Washington has signalled that may not be enough. The UK's increase to 2.5 per cent of GDP by the end of the decade, equivalent to an extra £75 billion, was announced at last month's NATO summit and welcomed by US officials. The Coalition welcomed the UK-Australia treaty but called for defence spending to be increased, urging the Albanese Government to show greater commitment to the US. 'The Albanese Government must urgently demonstrate the same clarity and commitment with the United States,' a joint statement by shadow ministers Michaelia Cash and Angus Taylor said: 'Particularly in light of the Pentagon review, to reassure our partners that Australia can deliver on its contributions and, in turn, secure continued US backing for the agreement. 'Australia must do what we can to ensure AUKUS' longevity and success.' 'At a time of rising global instability, sustained underfunding risks weakening Australia's deterrence and damaging trust in our alliances,' they said. 'The Government must match its rhetoric with investment, and we stand ready to support a bipartisan pathway to deliver the capabilities our nation needs.' Australian Strategic Policy Institute senior analyst Euan Graham said it could be contributing to current alliance tensions. The pressure comes ahead of summit season, where the Prime Minister Anthony Albanese hopes to land his first meeting with Donald Trump. The Prime Minister has dodged questions on when he'll meet the US President after their planned G7 meeting fell through, with Opposition Leader Sussan Ley attacking the lack of progress during the first sitting of the new Parliament this week. Dr Graham said while the UK could support long-term ambitions, Australia still faced a near-term capability gap it would need the US to fill. He said Australia still had an interim reliance on US-made Virginia-class submarines — set to be acquired in the early 2030s, while waiting for the AUKUS subs to be delivered in the 2040s. 'It doesn't solve the issue of the gap between now and when those submarines start being delivered,' he said. 'That's where the American Virginia class gap-filling really comes into play.' But he reiterated that the AUKUS arrangement was a three-nation pact and can be reinforced by each side, saying if confidence dips in one party, strengthening ties with the others can help balance it out. 'This is a clear commitment from the UK to honour its side of the bargain, and I think hopefully that should steady some of the nervousness around Washington's commitment levels,' he said. Greens Senator David Shoebridge blasted the new treaty, calling it a backward step that enriches foreign arms companies and damages regional ties. 'Australia needs to look to our region, not tie our future to a dying empire a world away. All this will do is line the pockets of foreign arms companies and alienate our neighbours,' Senator Shoebridge said. But Dr Graham said Australia must pay to play, and it was necessary to offshore work because Australia lacks the technology to produce the subs on its own. 'If Australia wants capability, it has to buy it. It can't produce it itself,' he said. 'As part of that, Australia is committed to directly investing in the defence industrial base of both countries. 'That's money that's going to leave Australia and go into other countries, but those other countries are providing a service. It's like anything else.' Mr Marles expressed the importance of Australia's 'oldest relationship' with Britain amid global uncertainty and a 'great power contest' in the region. UK Foreign Secretary David Lammy labelled the AUSMIN talks as ' focused and constructive' and the pact a 'landmark treaty' which was necessary in a 'turbulent world'. 'It's clear that the UK-Australia relationship is an anchor in what is a very volatile world, providing stability in troubled waters and a relationship that holds steady,' he said. 'Whichever way the geopolitical winds are blowing . . . I think we're sending a clear signal, a signal of the UK's commitment to this region of the world.' He said the UK was determined to keep the Indo-Pacific 'free and open'. Senator Wong said the relationship was rooted in shared values and interests, but it was important to 'modernise' the partnership to meet current global challenges. 'We all know we face the most challenging, strategic circumstances since World War II. More conflict, more contest, a multilateral system under strain,' Senator Wong said. 'And against that backdrop, the partnership between our nations matters even more. And we are determined to work together to modernise our partnership, to take the world as it is, but to work together to shape it for the better. 'We've had an excellent set of discussions today.' Both parties will travel to Mr Marles' Geelong electorate tomorrow, where the agreement is expected to be officially signed. Mr Marles and Ms Wong will also join their UK counterparts in Darwin on Sunday for the visit of the UK Carrier Strike Group, the first such deployment to Australia since 1997, taking place during Exercise Talisman Sabre 2025.
