The federal government has handed down what Treasurer Jim
Chalmers called "the most important and ambitious Budget in decades."
The term "intergenerational inequality" is a
social construct dreamed up by Labor to create an "us vs them” to encourage
younger Australians to vote for them.
Yes, young people have challenges, including affordability,
but in my mind, it was a tax grab, aiming to tax wealth rather than income,
trying to attract younger voters.
And if you take a close look at what it actually does, there
are very good reasons to think it won't achieve what it promises - and quite a
few reasons to think it could make things worse.
Even the budget papers forecast house prices will rise by 4%
over the next year. This doesn't make properties more affordable for first-home
buyers, despite the government incentives.
And with building costs rising steadily, new home builds will
only be more expensive.
I've been watching property cycles and government policy for
over 5 decades, and one thing I've learned is that political solutions to
economic problems almost always create new problems of their own.
This budget is no exception.
The promise vs. the reality
The centrepiece of the housing measures is the restriction
of negative gearing on established properties purchased after Budget night, and
the replacement of the 50% capital gains tax discount with a cost-base
indexation model and a 30% minimum tax from 1 July 2027.
The stated goal is to make housing more affordable,
particularly for first-home buyers and younger Australians.
I can see that to some, this is an appealing idea.
Tell people you're cracking down on wealthy property
investors so that young people can get a foothold in the market, and it sounds
like good policy.
The problem is that good-sounding policy and effective
policy are rarely the same thing.
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Jason Gwerder
Saturday, 30 May 2026
