A manufacturing workers union is advocating for the reduction and eventual elimination of the capital gains tax discount and an end to negative gearing, arguing these policies worsen inequality and housing affordability. The union suggests redirecting recouped revenue to modular housing development.
Manufacturing workers union wants capital gains tax discount to be reduced and then phased out and an effective end to negative gearing A trade union has called for sweeping changes to housing tax breaks that it warns have “commodified” property and worsened inequality.
The Labor-aligned union is among several stakeholders calling for sweeping changes to the housing tax breaks in submissions to a Greens-led Senate inquiry into the John Howard-era 50% capital gains tax discount.The Australian Nursing and Midwifery Federation also recommended winding up the discount, which it feared was “exacerbating inequality, worsening housing affordability and undermining Australia’s long-term social and economic wellbeing”.to resurrect a version of the plans, arguing that policies to increase supply were the best way to tackle the housing crisis.to the concessions in 2024, but the government chose not to pursue them ahead of last year’s federal election.”The commodification of houses into a vehicle for accumulating and hoarding wealth has exacerbated inequality and allowed property developers, real estate agents and investors to profit from denying working people the dignity of home ownership,” the submission read. The AMWU recommended the capital gains discount on investment properties be immediately reduced and phased out entirely over a two-year period. The discount – which applies when a property is sold after at least 12 months of ownership – is expected to cost the federal budgetThe union wants to stop investors from using losses to lower their income tax bill, effectively ending the negative gearing of properties. The revenue recouped by winding up the concessions should be redirected to developing Australia’s modular housing industry, it argued. “The economic and social opportunity of home ownership is slipping out of reach for most workers. In fact, without substantial and real changes to our mindset and to policy, a whole generation is going to miss out,” the submission read.proposal to last year’s productivity roundtable, which called for negative gearing and the capital gains tax breaks to be restricted to a single investment property and grandfathered for five years.with a policy of limiting negative gearing and the 50% capital gains tax discount to one investment property, which would also be grandfathered in. The pressure from inside the Labor movement to overhaul the tax breaks is expected to continue as the party prepares to thrash out its platform at its three-yearly national conference in Adelaide in July. In its submission to the Senate inquiry, the Grattan Institute thinktank said the 50% discount was too generous and had “overcompensated” property investors for inflation over the past 25 years. It recommended a 25% concession – which Shorten proposed – should be phased-in over five years, raising roughly $6.5bn a year that could be used to shore up the federal budget, lower the tax burden on young Australians or boost commonwealth rent assistance. The Centre for Independent Studies, a conservative thinktank, said the 50% discount was “simple and well understood and there was no strong reason for changing it”.
Capital Gains Tax Negative Gearing Housing Affordability Tax Reform Housing Market
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