Coalition blames tax reform for social cohesion decline
The coalition claims the controversial tax changes will further weaken social cohesion once the measures are passed by parliament.
The Greens reached a deal with the government on curbs on negative gearing and a capital gains tax cut, which won Senate approval on Thursday.
Capital gains tax settings will change from July 2027; The standard 50 percent deduction will be replaced by cost-based indexation and a minimum tax rate of 30 percent.
The changes will be extended to all entities, including businesses, but the government has announced a regulation to appease the startup sector, which has complained it will be uniquely affected by the new regulations.
Negative gearing and capital gains tax relief will apply to investors who already own property but cannot be used to buy established homes.
However, people who own investment properties with their spouse will lose their grandfather tax deductions if their spouse dies or divorces.
The government confirmed on Thursday it would change the law in future legislation to remove the “widow’s tax” as critics call it.
Shadow treasurer Tim Wilson said: “They are either deliberately targeting grieving widows, or they don’t understand the consequences and financially bully widows in their time of pain.”
Opposition Leader Angus Taylor used his appearance at the State of the Nation conference at Australia’s Economic Development Committee to blame Labor Party policy in part for the decline in social cohesion.
“The economy is stagnating. You see it in living standards and crime,” he said, suggesting that it was the responsibility of overall political leaders to “engage differently” with voters.
“There is deep disappointment,” he said, before reiterating the coalition’s position on Labour’s tax policy.
“If there is a housing supply crisis, you need more homes, and I start with a very simple principle of taxation.
“(If) you tax savings and investments more, you’ll have less savings and investments. If you tax more businesses more, you’ll have fewer small businesses.”
“We need more of all of these if we want to have prosperity and increased income.”
Earlier in the day, One Nation leader Pauline Hanson took her “banish the liar” campaign to Parliament House and accused Labor of breaking its promise not to change the CGT and negative gearing regulations.
As three mobile billboards rolled past the building’s forecourt, Senator Hanson criticized the federal government’s generally unpopular budget. “People’s hearts are full,” he told reporters. Senator Hanson also spoke to students visiting parliament from the NSW mid-north coast town of Lismore and had some advice for an aspiring politician. “This is about the people. They expect you to make the right decisions for their future,” he said.
He and his One Nation colleagues voted against the tax changes, as did some independent senators.
