Name: The federal government weighs up its options for tax reform ahead of the federal budget | 7.30
Uploaded: 2026-03-18T23:02:04.000Z
Duration: 5 min 50 s
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The Government's budget preparations are in full swing, with ministers meeting on a near daily basis to nut out the details.

While the push for tax reform is high on the Treasurer's agenda, we've made it clear in recent weeks that we are considering our options when it comes to tax reform.

But the first order of business is managing fallout from the war in Iran, which shows no signs of abating.

The Treasurer will tomorrow deliver a major speech detailing bleak treasury modelling on the war's economic ramifications.

It shows there is now a very real chance that surging oil prices would send the inflation rate above 5%, hurt the global economy and wipe about $18 billion off Australia's GDP.

We want to make sure that we do everything we can to shield the Australian economy, households and businesses from the worst of global uncertainty.

That will also be a focus of our budget coming up in May.

But we won't be waiting until the budget.

There's an unmistakable sense of crisis on multiple fronts.

The Prime Minister revealed today an Iranian attack landed near a United Arab Emirates air base where Australians are stationed.

The Iranian regime is continuing to engage in, frankly random attacks right across the Gulf region.

And fears are growing that fuel rationing will be needed if the war continues.

The Prime Minister hosting a virtual national cabinet tomorrow.

We've been working each and every day as well with industry, but

we want to make sure that states and territories that we have that coordination.

Beneath those pressing challenges lie the lingering long term budget headaches.

Government debt and spending are high by historical standards and economic growth is weak.

Real wages are falling and the tax system is increasingly seen as skewed against younger Australians.

7:30 understands the Treasurer will argue in his speech tomorrow that this is not the time to drop the ball on reform.

A rallying cry to his colleagues and voters that will include a dire warning that productivity growth, a key driver of living standards, will will take more than twice as long to recover from a long slump.

This is a once in a generation opportunity for a tax reform package of genuine ambition that is genuinely progressive.

And we are urging labor to show the ambition and the courage necessary.

The Greens are among a growing list of think tanks, unions, crossbench MPs and Labor supporters pressing the government to roll back the 50% capital gains tax discount on property investment now blamed for making it harder for young people to get into the market.

We want to make certain that the existing capital gains tax is not acting as a disincentive to investment.

In the 1990s, the median home cost about six times annual after tax income since the capital gains tax discount was introduced by the Howard government, that ratio has more than doubled.

The original intention of the CGT discount wasn't necessarily to turbocharge the housing market, but.

It effectively made it much more sensible for capital to be parked in pretty much the safest and highest capital growth asset, which is established dwellings.

Ed Kavanagh heads the progressive McKell Institute think tank and says the government should reduce the CGT discount for investments in existing dwellings, but

retain the full reduction for new investments.

There's a huge appetite out there in the community for very ambitious, meaningful tax reform in pursuit of fairness in the housing market, but

also to be done in a way that doesn't hamper the aspirations of everyday people to purchase a home and potentially purchase an investment property, too.

So there needs to be a sensible way forward here.

The coalition says it will fight any move to wind back the concessions.

If you increase taxes on housing, you won't get more housing being built in Australia to lower the cost, which means the government would need the support of the Greens.

In the Senate, we prefer to see either no grandfathering or a rapid phase out of existing arrangements.

Young people are being priced out of the housing market.

Renters are trying to compete against property speculators who in their back pockets have this massive tax break.

Jim Chalmers and Katy Gallagher have confirmed in recent days that they're working on tax reform options to put before Cabinet.

Labor senators backed an inquiry that found this week that the capital gains tax discount has worsened housing affordability.

I'll go through the report and obviously I'll take it seriously, but

at the end of the day, the decisions, any decisions taken in this area will be made by the Cabinet.

The inquiry was very clear in finding and labor signed onto these fines.

The capital gains tax discount has played a significant role in the housing crisis in Australia.

It generates wealth inequality, it generates income inequality and it generates intergenerational unfairness.

If we're not going to change CGT discounts, if we're not going to reform housing taxation now in this budget, when are we ever going to do.