Tax expert worried Australia on path to neo-feudal society as housing wealth drives inequality | Housing

The boom in housing wealth is putting Australia on the path to a neo-feudal society where your prosperity depends largely on whether your parents own land or property, one of the country’s leading tax experts says.

“That’s the trajectory we’re on,” said Bob Breunig, director of the Tax and Transfer Policy Institute at the Australian National University.

“I don’t think we’re back to pre-French Revolution times, but I’m worried about it,” he said on the second day of hearings in a parliamentary committee on the operation of the capital gains tax.

“We often frame the issue of equality as an intergenerational issue, an old-young issue, which it is not.

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“If you’re young and your parents have a lot of assets, those assets will eventually come to you. So the real inequality is between people in the same generation, between those who have assets and those who don’t.”

Breunig wrote in May 2025 an effective report It shows how the tax and transfer system has become more generous to older Australians in recent generations.

Breunig said the aim of the reform, which aims to increase fairness in the tax system, is not to “punish” the elderly.

“We all want to live in a country where older people are rich; we should encourage people to work hard and save throughout their lives.”

But he said tax and transfer settings do not change over time.

“Being old used to mean you were poor, and so we have a lot of money that we transfer to old people just because they are old. But a lot of old people are not poor anymore, but we still transfer money to them as if they were poor,” Breunig said.

“So we need to move beyond the old idea that poverty is a label and now say let’s target this help to people who really need it.”

The Greens-led committee focused heavily on the role of the generous 50 per cent capital gains tax cut in worsening the housing affordability crisis by funneling speculative investment into residential property.

Union great Bill Kelty on Monday called on the government to pursue a much more ambitious reform agenda that would give hope to increasingly alienated younger generations.

Breunig echoed other expert evidence that reducing tax breaks for investors would not make a big difference to house prices or home ownership, although it would turn the dial in the right direction.

He said the CGT discount was not “too high” in an international context and warned that setting any changes as historical – so they only apply to new investments – would actually “worsen” intergenerational inequality.

“Because now you’re getting something from the younger generation that the older generation had access to.”

He said the “much bigger problem” was the “horribly low taxation” of the family home and pension.

But Bernie Fraser, a former governor of the Reserve Bank, argued in favor of scrapping the capital gains tax cut and said he believed the impact on house prices would be greater than the 1% to 3% drop typically forecast.