Latest news with #CGT
Perth Now
7 hours ago
- Business
- Perth Now
‘Too long': Plan to crack huge housing hurdle
Thousands of new houses could be built in the next five years with tweaks to tax rules that Labor has resisted 'for too long', experts say. Increasing tax breaks for investors in new properties is needed for Australia to meet its 'ambitious' 1.2 million home target by 2030 according to a new research paper by The McKell Institute. Four tweaks to capital gains tax – including an increase to the 50 per cent discount for new units but a reduction on discounts for detached dwellings – are being put forward as a 'circuit breaker'. The paper will be submitted to the federal productivity roundtable forum, which Treasurer Jim Chalmers is promoting as a way to build consensus on long-term economic reform. 'Labor has resisted change to the CGT discount for too long,' McKell chief executive Edward Cavanough said. 'The CGT tax discount is neither good nor evil, but it should be better calibrated to actually achieve our social aims.' Experts are split on the best way to build more houses. NewsWire / Flavio Brancaleone Credit: News Corp Australia 'Instead of encouraging property investors to bid up the price of existing housing stock we should be encouraging them to contribute to the construction of new dwellings.' Capital gains tax is paid when you buy an asset and then later sell it for a profit; the profit you make is taxed as income. The capital gains tax discount kicks in when, if you own an investment property for 12 months and then sell it, you only pay tax on half the profit you made. The richest 10 per cent of Australians reap the benefits of more than half the capital gains tax discounts, government data shows. Sale of the home you own and live in is exempt from capital gains tax. Federal Treasurer Jim Chalmers will lead the roundtable meetings in Canberra next month. NewsWire / Martin Ollman Credit: News Corp Australia The plan projects up to 130,000 extra new homes could be built by 2030. '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,' Professor Holden 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.' The federal government has set a lofty goal of 1.2 million new houses being built by 2030 that would require 220,000 new dwellings per year. About 160,000 new homes are built each year. The monthly new home target has been met just once since the target was set in early 2023, and even the federal Treasury has suggested the target will not be hit under the current policy settings. In tune with the McKell research, a group of rank-and-file Labor members has also thrown their voice behind a proposal to curb the tax discounts, with Labor for Housing saying a reduction in the discounts would help build more houses. Mr Chalmers has billed the roundtable meetings as a chance to set in motion aspirational reform. In June, Mr Chalmers said changes to capital gains tax was not something the government was 'looking at right now' but acknowledged there was appetite. 'I think it is really important we don't narrow that, limit that, those ideas people put forward. We've had a view about that in the past. I do suspect people will raise it, and we'll listen respectfully when they do,' he said.
Sydney Morning Herald
a day ago
- Business
- Sydney Morning Herald
The tax change that could allow thousands of new homes, ease rental pressure
Prime Minister Anthony Albanese is under pressure to overhaul capital gains tax, delivering bigger tax incentives to investors who build new units amid warnings that without change, the government will fail to hit its 1.2 million new home target. 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.'
The Age
a day ago
- Business
- The Age
The tax change that could allow thousands of new homes, ease rental pressure
Prime Minister Anthony Albanese is under pressure to overhaul capital gains tax, delivering bigger tax incentives to investors who build new units amid warnings that without change, the government will fail to hit its 1.2 million new home target. 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.'
Sydney Morning Herald
a day ago
- Business
- Sydney Morning Herald
PM needs to be wary of becoming too reliant on China
While a fair portion of what Peter Hartcher said in his article was fair enough ('' Adolescent' nation coming of age ', July 19), there was no mention of how Prime Minister Anthony Albanese's Beijing trip is going to make us even more reliant on China for trade given that Albanese has said this was his main aim. In fact, we are reliant on China for just about everything except food. Our free trade agreements over the years, especially those with China, have successfully killed most of our manufacturing. During COVID, when China decided to punish us instead of doing the hard work of diversifying, our bottom lip started wobbling, we put our cap in our hand and we begged for mercy. Since then, we are even more reliant on China. To be so reliant on any country is stupid, but to be almost totally reliant on a country with a human rights record such as theirs, with such obvious military aspirations, and a country that we see as a possible future enemy, is sheer madness. To me, this is evidence of Australia's continued adolescence. In fact, I think an adolescent would be smarter. Andrew Cronin, Robertson Yes, Australia is being forced to grow out of its adolescence due to Trump's disruption of the world order and the decline of America's central global role. No one, except the myopic opposition, can have any criticism of the way Albanese has been navigating the diplomatic US-China tightrope. His attitude is sensible: 'You don't have time to see me and want to put tariffs on our goods and threaten delivery of the submarines? No problem, we have other friends who want us to join their party.' While the US has been a reliable ally over the past eight decades, its star is waning due to tyranny of distance, its unfettered economic model and its choice of leadership. During this time, a cold, calculated focus on our own long-term self-interest is what Albanese is demonstrating, while not being threatened by pressure from either China or the US. Unless the opposition has a solid game plan to counter the Albo-Wong strategy, it should work with the government to achieve what is best for us. Manbir Singh Kohli, Pemulwuy Capital gains pains Sorry, William Lloyd (Letters, July 19), but most economists expected a CGT to do what any tax does – discourage people from investing in that area. That is what happened to housing from 1985 to 1988, when the entire economy took off. This lasted just two years and property prices fell and remained low until 1999, when John Howard introduced his 50 per cent discount on the amount taxed for CGT. While I know that correlation does not prove causation, house prices took off immediately on the introduction of that amendment and have continued that upward trajectory for 26 years since. Why income from property profits should be taxed at a fraction of the rate that income from any other source is taxed remains a mystery to me. Barry Harrod, Fig Tree Pocket (Qld) Valid criticism Richard Flanagan expertly draws on Jewish writers to demonstrate the folly if our PM adopted the Segal report's recommendations (' PM must disavow and abandon Segal report ', July 19). Antisemitism, like all other forms of racism, is not supported by most Australians. We are at heart the proud outcome of our indigenous and ethnic diversity. Australia is also a democracy. Criticism of the Israeli state or Zionism is neither antisemitic nor racist. Robbing us of our right to criticise the egregious actions of nation states is tantamount to destroying our own democracy. Do that at your own peril. Brian Barrett, Padstow In Australia 2025, Jewish students are harassed on campus, and Jewish artists and academics – even ones with a history of speaking up for Palestinians – are excommunicated for disagreeing with the modern progressive dogma that Israel is evil. Jewish-owned businesses are vandalised and synagogues are burnt. But we are told by Richard Flanagan that 'leading Jewish figures' such as Louise Adler (who in reality represent a fringe minority of Australian Jews) are calling reports of antisemitism exaggerated. We are told that the IHRA definition of antisemitism says that criticism of Israel is antisemitic, when it explicitly says this is not the case. Gaslighting at its finest. Tim Peach, South Perth (WA) As a child of Holocaust survivors, I believe it is essential that the Executive Council of Australian Jewry condemn the war of annihilation waged by Israel's Netanyahu government against the Palestinian people in Gaza and the West Bank. It also behoves Jillian Segal, Australia's special envoy to combat antisemitism, to unequivocally condemn the inhumanity of Netanyahu in his ruthless and indiscriminate killing of Palestinian women, children and men according to the false doctrine of 'collective punishment', which is regarded as a war crime by the United Nations and other bodies such as the International Criminal Court, the International Court of Justice and Amnesty International, among others. John-Janusz Ebel, Caulfield North (Vic) Plastic not fantastic Like most Australian consumers, I want to do the right thing when it comes to recycling plastics. So I was horrified, but not altogether surprised, to read Hannah Kennedy's feature (' The plastic that contaminates our recycling stream', July 19). It seems that despite the efforts of people such as me, companies, watchdogs and governments are all dragging the chain when it comes to plastic recycling standards and product symbols. Silly me. Turns out the whole area is a minefield – businesses labelling their products recyclable when they are not, different local councils with different rules, different rules applying to local and overseas markets, products without symbols indicating they can be recycled when they cannot be – and so on. A dog's breakfast, indeed. It's time to fix this problem. Consumers must lobby their elected representatives and boycott companies that make misleading and sometimes dishonest claims about their products. Jane Mundy, Balgowlah According to Hannah Kennedy's article, many of the product symbols commonly used are misleading and incomprehensible. What about simply having 'Recyclable in Australia' shown on all relevant containers and packaging? It would be simple and effective and make it easy for all to do the right thing. Wendy Crew, Lane Cove North Latham can't be avoided Unless a government has an absolute majority, it will need to work with independents and minor party members to get legislation passed, regardless of political persuasion, moral compass or alleged sins of said parliamentarians. Why, then, do we demonise the NSW government for working with Mark Latham on matters of policy and law (' NSW Labor vowed not to work with Latham. The reality is complicated ', July 19)? He is a member of Parliament and as such, his vote counts. The government is not supporting Latham; it is asking him to support them on political matters. I don't see a problem. Gerianne Rudd, Toowong (Qld) We read that Liberal Upper House leader Damien Tudehope worked with Mark Latham to oppose Labor's controversial cuts to the workers' compensation scheme, which seems to have angered Premier Chris Minns. Yet the premier had no qualms about collaborating with the Shooters, Fishers and Farmers Party to try to push through these same cuts. The premier has opened the door to a plan by Shooters to establish a new 'hunting authority'. Apparently, Latham's alleged personal foibles count for more than the risk of allowing shooters to intrude onto public land and blast away at supposedly 'game and feral animals'. The approval of night shooting and guns with silencers is a chilling prospect. It would not only be a tragedy for wildlife but for unwary members of the public. Shooters will even be paid a bounty for the kill. We presume that won't be paid on people who cop a bullet. Jan O'Leary, Springwood Correspondent Jack Robertson decries the 'wowserish curtain-twitching and public hysteria about private and consensual sexual behaviours' concerning Mark Latham (Letters, July 19). Meanwhile, Latham was found to have defamed lower house MP Alex Greenwich to the tune of $140,000 in damages in a tweet targeting Greenwich over his sexuality. Can your correspondent please clarify the difference between his pearl-clutching concern about Latham's 'private and consensual sexual behaviours' and the aforementioned Mr Greenwich's 'private and consensual sexual behaviours'? Nick Andrews, Bellevue Hill Trump's Achilles Be very careful, Mr Trump ('Trump taunts Murdoch as he files $15b lawsuit over Epstein story', July 19). You may have been able to dismiss some of your loyal followers over the Epstein saga, and even rid yourself of your biggest donor, Elon Musk. However, Rupert Murdoch is another matter altogether. If you alienate Murdoch, keep in mind his empire has been, and will be, there for a lot longer than four years. Perhaps Murdoch's critics might forgive him for everything if he rids the world of this serial pest. Mary Lawson, Marrickville I read that Trump is suing Murdoch for $15 billion for defamation. His lawyers claim a newspaper article 'malign[s] President Trump's character and integrity'. Question: how can a convicted criminal have character and/or integrity worth $15 billion? Peter Duffy, Burra Has Trump finally done something useful in suing Murdoch? Or has Murdoch actually given us some truth in his rags, calling out a convicted criminal? Paul Fergus, Croydon Wow, I almost find myself in the very strange position of wishing Murdoch well. Judy Hungerford, Kew (Vic) Houses of God I think correspondent Jacqui Keats is being rather uncharitable on the subject of churches building high-rise unit blocks (Letters, July 19). Now more than ever, churches need income, especially to house and sustain their ministers and priests, and all the help and succour they give to society besides providing spiritual support to the community. Churches are also suffering the high cost of living and if it means building high-rise apartments, then so be it. Lynne Zahra, Epping Correspondent Tony Doyle wrote that high-rise apartments built by churches were closer to heaven, but with all those extra cars, they will also need deeper basements. It gets satanically hotter parking down there. Yours warmly. Russ Couch, Woonona Respect the planet Millie Muroi has written an important article about the need for 'clear goals' concerning environmental management (' Like ChatGPT, we need clear goals and rules. Otherwise, we could make bad decisions ', July19). After all, if we don't know where we want to go, it doesn't matter which bus we get on. Unfortunately, the goals we espouse involve growth, especially in terms of the economy and population size, both of which being achieved at the expense of the environment. Since this environment provides our life-support system, it is increasingly imperative to address these damaging growth factors and find sustainable, ethical alternatives. Alan Jones, Narraweena At US behest Does anyone believe that the delivery of the 49 Abrams tanks promised to Ukraine was delayed because of 'logistics challenges' (' Australian tanks arrive in Ukraine after nine-month wait ', July19)? I believe it's more likely the nine-month wait was caused by the need to gain Washington's approval. Australia is at the mercy of United States decision makers – or maker. We have out-of-service, US-made Abrams and don't need them. Ukraine does. Australian pledged to help Ukraine, and in October 2024 we said we would send them 49 tanks immediately. The ABC and others report that the United States refused to give us permission to send the tanks to Ukraine. How could Australia have gotten in this deplorable position? Why would our sovereign country need any other country's permission? This raises the question of what else we need permission from the United States for. Carol Dance, Wollstonecraft Ages of consent While many politicians favour lowering the voting age in Australia and elsewhere, there doesn't seem to be a similar enthusiasm for lowering the age at which young people should be treated as adults in court (' Could Australia follow UK's 'shock' move to lower voting age to 16? ' July 19). If 16-year-olds are mature enough to have an equal voice in selecting the government, surely they are mature enough to accept the consequences of their illegal actions as an adult. Or is this lowering of the voting age just pandering for votes rather than a well-reasoned view of maturity? Remember, once the voting age is lowered, there will be no going back. Steen Petersen, Nanaimo (Canada) Not appy, Jen Thank you, Jenna Guillaume (' The app-ocalypse: Please, I beg, don't make me download one more app ', July 19). I find the world of apps exhausting. Like Jenna, I try to avoid them by using my trusty computer, yet somehow I end up with that dreaded word 'app'. Am I sounding like a grumpy old woman? Perhaps I could find an app to help me. Philippa Reiss, Port Macquarie Harmony to discord Best meme from that kiss-cam moment (' CEO of $1.5b tech firm appears caught out on Coldplay 'kiss cam'? July 19)? 'Coldplay haven't released any singles for ages – but they created two last night.' George Zivkovic, Northmead Bastardly act Richard Glover's article about Australian English, including our multiple meanings of the word 'bastards' – from insult to compliment to collective noun – jogged my memory about a story from the 'bodyline' Ashes series in the 1930s (' Do Australians have the best possible version of English? ' July 19). After a particularly acrimonious session, English captain Douglas Jardine stormed into the Australian dressing room to demand an apology after he had been sworn at by an Australian player. Vic Richardson, the Australian captain, called the team together and asked 'which one of you bastards called this bastard a bastard?' Ian Morris, Strathfield
Reuters
3 days ago
- Business
- Reuters
How can French PM avert another budget crisis?
PARIS, July 18 (Reuters) - French Prime Minister Francois Bayrou has to convince opposition Socialist lawmakers in the coming months to tolerate his 44 billion euro budget squeeze or he faces the risk of being toppled. Bayrou is bringing his 2026 budget to a fractured parliament where hard-left and far-right parties threaten no-confidence motions against him unless he makes major revisions. If he can convince the Socialists at least to abstain from backing such motions, Bayrou's minority government could get the budget through, however, meaning he must rewrite the legislation enough for them to stomach it. Politicians will be heading off for the summer break, with parliament in recess until Sept. 22, effectively giving Bayrou two months to try to soften the Socialists' resistance to his plans. Bayrou aims to reduce France's budget deficit, the biggest in the euro zone, from 5.4% to the European Union's 3% GDP limit by 2029. His 43.8 billion euro ($51 billion) package freezes most non-defence spending and eliminates two public holidays. Nearly 21 billion euros comes from limiting social and local government spending growth, with no inflation adjustments for public sector wages or welfare benefits. Another 10 billion euros targets high earners through a "solidarity" tax, restricts pensioner tax breaks, and cracks down on fraud. While politicians debate the budget over their summer break, unions are considering strike action - the hard-line CGT is in favour while the moderate CFDT has not ruled it out. The September return from the summer recess promises to be particularly tense as parties stake out positions. Bayrou must finalise his budget bill by Oct. 1 when it is to be sent to lawmakers. Without a majority, he will likely at some point invoke article 49.3 of the constitution to adopt the budget without a vote, triggering inevitable no-confidence motions. His survival would depend on the Socialists' abstention. Socialists demand a total budget revision, arguing that the spending freeze burdens average workers and pensioners while treating the wealthy with a light touch. They have criticised Bayrou's 4 billion euro tax increase on high earners as grossly insufficient. Bayrou has signalled a willingness to adapt, but he faces constraints from allies who think France's tax burden is already excessive. The Socialists are also against plans not to replace some retiring public workers and the scrapping of two public holidays. Should Bayrou fail to placate the Socialists and fall, President Emmanuel Macron would have to find a new prime minister, as happened with Bayrou's conservative predecessor Michel Barnier in December. This would leave budget legislation in limbo during the formation of a new government, which could drag on in the absence of figures palatable to at least some parties. Alternatively, Macron could call snap legislative elections again, plunging France even deeper into political uncertainty. ($1 = 0.8592 euros)
