Ahead of Tuesday’s highly anticipated federal budget, Australian Prime Minister Anthony Albanese has faced intense backlash and publicly defended his government’s decision to walk back a key pre-election pledge, confirming plans to revise rules around negative gearing and capital gains tax (CGT).
Albanese argued that the shift in policy is rooted in the growing, unaddressed crisis of intergenerational inequality that has only become more entrenched since Labor won the 2022 federal election. In an interview with ABC Radio National, the Prime Minister framed the policy reversal as a necessary response to ongoing housing affordability struggles that have shut a generation of young Australians out of home ownership.
“Last year was a year of delivery on our core election commitments, but that was never the limit of our ambition,” Albanese told reporters. He drew a parallel to the government’s unexpected fuel excise cut introduced in response to market volatility triggered by the Middle East conflict, noting that policy adjustments are sometimes required to match shifting national circumstances.
Since the last election, Albanese said, little progress has been made to fix the systemic barriers facing young aspiring homeowners. “Another year has passed, and too many young people are still missing out at property auctions, still renting and paying off someone else’s mortgage, and many are already close to giving up on ever owning their own home,” he said. The Prime Minister added that housing has been a top priority for his government since taking office in 2022, and the upcoming budget will deploy every available policy lever to expand access to home ownership. While the upcoming changes will roll back existing CGT concessions, Albanese emphasized the budget remains centered on delivering cost-of-living relief for working Australians, and the government will always be transparent about any shifts in policy position, motivated by what delivers the best long-term outcome for the nation.
In the lead-up to the budget, the government has already unveiled a suite of housing-focused measures, including additional funding to boost new housing supply and accelerate construction timelines for new developments. But opposition figures have slammed the policy shift as a broken promise and a cynical cash grab.
Liberal Senator Jane Hume criticized the turnaround, pointing out that just 12 months ago, Labor repeatedly ruled out any changes to negative gearing and CGT in this parliamentary term. Even 18 months ago, she noted, Treasurer Jim Chalmers publicly stated there was no evidence that changing these tax policies would have any positive impact on housing supply.
“Labor said life would be better under an Albanese government: you’d have more money in your pocket, electricity prices would fall, housing would become more affordable. All of that has been a lie,” Hume told the ABC. She argued that if Chalmers cannot demonstrate how the tax changes will actually increase housing supply, the move is nothing more than a government revenue grab at the expense of Australian taxpayers, driven by what she claimed was a collapsing federal budget position.
All eyes now turn to Tuesday, when Chalmers will officially hand down the 2024 federal budget and detail the full scope of the planned tax changes and housing measures.