Putting aside the complexity of the proposed CGT changes, there is a simple illustration of why the minimum 30% tax rate just seems unfair in our system. Someone on $190,000 of earned income a year has an effective tax rate of less than 30%. Anyone under that (most Australians) will have a lower effective rate. Yet, if they make a capital gain as part of their income, it has a minimum rate higher than their marginal tax rate. High income earners aren't affected because their rate is already higher. So the proposed system only penalises lower income earners. There are many flaws in this legislation, but the minimum tax rate seems to be the worst one in my view.

Under Labor's new capital gains tax, if you're on the top tax rate, have a 6% mortgage and 2.5% inflation, you need to earn 9.1% investing - no small feat - just to break even with putting your money in a mortgage offset account. That's before you are compensated one cent for the risk you took, the double taxation, the time and effort. Say you want to make at least 3% after tax above putting money in your offset account. A modest benefit. You would need to make 14.76% in the market. Do that consistently and you would be ranked amongst the greatest investors of all time. That's right - Labor's hurdle for investing as an Australian is you need to be amongst the greatest investors of all time. So if you're John Templeton or Walter Schloss, no worries.

This nails the whole point about how badly conceived the proposed changes are and worth a read

If Andrew was being honest, he wouldn’t refer to “returning” to the pre-99 system, which: - had an averaging rule to limit bracket creep effects of multi-year gains - had no 30% minimum tax - applied indexing to companies - excluded pre-85 assets Why would he omit that?

Australia’s new minimum wage is $26.44 an hour. A full-time worker earning the legal minimum now falls into the middle income tax bracket. Bracket creep has reached the point where minimum wage workers are being taxed as “middle income”. It isn’t easy under Albanese. #auspol

Labour productivity had NEVER fallen over a 4 year period UNTIL the election of this Labor government. If you want to understand why things are costing more, why interest rates are going up and why your living standards are going backwards, this is the answer.

Let's check in on Australian productivity growth.... Oh.....That's not gone well...

In Q1, the Australian economy grew by 0.27%. The working age population grew by 0.64%. Working increasingly hard to go nowhere or flat out backwards.

Jim Chalmers wants Australians celebrating a tax cut. What he doesn't want them asking is: 📈 Is the total tax burden falling? 📈 Is government spending falling? 📈 Are workers keeping more of their income over time? The answer to all three is no. This is classic Chalmers statsplaining. A small tax cut is being advertised loudly while much larger tax increases on investment, housing, savings and wealth creation are pushed through quietly. Labor's broader tax package raises tens of billions through changes to capital gains tax, negative gearing and trusts. Meanwhile, workers continue to be hit by bracket creep and inflation. A tax cut that doesn't keep pace with rising costs is not a path to prosperity. The real measure isn't whether taxes fall by a few dollars next month. The real measure is whether Australians are keeping a larger share of what they earn and whether government is consuming a larger or smaller share of the economy. Labor's answer is: ❌ higher taxes on investment ❌ higher government spending ❌ bigger government ❌ more redistribution A genuinely pro-worker government would reward both work and investment, because tomorrow's jobs, wages and opportunities depend on today's savings, capital and entrepreneurship. A worker who buys shares is a worker. A worker who invests in an ETF is a worker. A worker who starts a business is a worker. A worker trying to buy an investment property is a worker. Prosperity comes from encouraging all of them — not setting workers and investors against each other. The problem with this Budget is that it celebrates consumption today while taxing the investment that creates prosperity tomorrow.

The govt tells us these are the biggest changes in decades to the tax system yet they want to rush them through. So much for running on a platform of better governance and thorough consultation - our future generations deserve better

Great article in the AFR today from @profholden. The proposed changes to CGT are an act of self-harm which will incentivise businesses to stay small and grow slowly--the opposite of what we should be doing in a productivity crisis.

> Comes to office claiming it’s a supply only problem > Imports a million people during a housing shortage > Fails to deliver new supply to meet growing demand > Housing becomes even less available and affordable > Blames tax settings in place for over 2 decades > Raises capital gains tax on all types of investment > Claims this is all about fairness for young people

This is a genius summary...

Why can't the Minister for Small Business provide an actual example? If there was a clear benefit, you'd think this would be any easy question to answer.

An analysis by former Treasury tax official Geoff Francis shows that under the government’s CGT changes, investors with a typical diversified portfolio where one-third of shares underperform inflation will face real effective capital gains tax rates of between 42 per cent and 65 per cent... In addition to indexing capital gains for inflation, Labor will impose a minimum tax rate of 30 per cent on real gains. However, real profits and losses from shares won’t be treated evenly. Only nominal losses, where the share price declines below the share purchase price, will continue to be permitted to be offset against real gains. Chile, one of the few countries in the world to use an inflation indexation model for capital gains, allows real losses to be offset against real gains. Labor’s model will penalise investors who spread their investments and record large gains on some stocks and big losses on other stocks, such as volatile biotech, technology and mining exploration companies. In the budget papers, Treasury cited e61 Institute senior economist Matt Nolan’s analysis of the existing 50 per cent capital gains discount as evidence for why it was better to move to an indexation model to compensate investors for inflation. Nolan said on Tuesday that although he supported indexing for inflation across the tax system, Labor’s CGT proposal had serious flaws. “If they’re not going to allow the real component of losses, that very much betrays the principle and can lead to strange distortions. It would penalise risk, so it does become quite a problem. You need to treat the upside and downside on gains and losses symmetrically.” afr.com/policy/tax-and-super…

Owning stocks has been a backbone of building wealth, but an issue with Labor’s capital gains tax changes cloud its future. Budget 2026: bit.ly/4nPPE5x

Just the craziest policy you could ever see from a government

The last thing we need in the middle of a productivity crisis is a productivity tax. "The new tax system will now punish businesses more likely to create jobs and economic growth and reward businesses more likely to shed jobs...This is the worst possible plan for a country in need of more jobs and more economic growth."

This is so incredibly good: Economist Joseph Schumpeter warned that capitalism weakens when prosperous societies become so comfortable they forget where prosperity came from – and begin resenting the entrepreneurial class that created it. A country might survive high taxes for periods of time. What becomes dangerous is something deeper: the moral suspicion of ambition itself. The creeping belief that commercial success is inherently exploitative, that profit is morally dubious, or that founders should quietly accept punishment for surviving years of uncertainty. Prime Minister Anthony Albanese and Treasurer Jim Chalmers should think carefully about the signals embedded in this budget. Tax policy communicates values. This budget signals that founders are not viewed as partners in national prosperity, but simply reservoirs of revenue whose success is viewed with suspicion... Civilisation advances because some people are willing to bet on tomorrow before tomorrow exists. Australia should be doing everything possible to encourage those people to build businesses here. Because once a society begins treating ambition as something suspect rather than admirable, it eventually discovers that no nation can remain prosperous after teaching its most ambitious people that they are unwelcome. afr.com/politics/federal/bud…

Charlton looking smart with these remarks today, which are the first sensible comments I have seen thus far: "Assistant Science Minister Andrew Charlton has conceded the new capital gains tax regime “doesn’t interact well” with small businesses that have a low capital base, validating the sector’s concerns about the reform. Mr Charlton, the Labor cabinet secretary, told ABC Radio National on Friday morning the decision to scrap the 50 per cent CGT discount for an inflation indexed model would not work for startups and small businesses that have “nothing to inflate off”. The decision to impose the inflation model and minimum 30 per cent tax rate across all asset classes has sparked fierce backlash from the business sector. Asked if the outcry was “unwarranted,” Mr Charlton replied: “No, I think there are real concerns”. “Start-ups and some small businesses are a real concern because what I just explained is that we’ve got this new type of capital gains discount which is based on inflation, and the point that many start-up founders, the point that many small businesses have been making is valid. “It’s a valid point because that new regime doesn’t interact well if you have a really low capital base because you’ve got nothing to inflate off. So, there are real concerns out there. “The government recognised those concerns, the Treasurer recognised them. Before the budget, there was a statement in the budget recognising them and we are consulting on them. So, we definitely hear those concerns.”" @ALeighMP @Charlton_AB theaustralian.com.au/nation/…