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Senate Hearings Expose Deep Split Over Capital Gains Tax Discount

Witnesses question the 50% concession’s role in worsening inequality, with the government non‑committal.

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Alan Kohler said the current tax system sent ‘a clear signal that capital income is preferred over labour income’.

Overview

  • Public hearings opened in Melbourne for the Senate inquiry into the capital gains tax discount, with testimony from ACTU president Michele O’Neil, economist Alan Kohler and former ACTU secretary Bill Kelty.
  • The ACTU urged cutting the discount from 50% to 25% and limiting both the concession and negative gearing to a single investment property to improve fairness for workers and first‑home buyers.
  • Kohler argued the current discount overcompensates for inflation and privileges capital over wages, while Kelty pressed for broader tax reform designed to help younger Australians.
  • Industry groups warned that reducing the concession would depress new housing supply and raise rents, with the Housing Industry Association citing project feasibility concerns.
  • Prime Minister Anthony Albanese declined to confirm any policy change as estimates shaped the debate, including a PBO projection of $247 billion in forgone revenue over a decade and Grattan’s $6.5 billion from halving the discount.