{"id":640838,"date":"2026-04-30T15:46:08","date_gmt":"2026-04-30T15:46:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/640838\/"},"modified":"2026-04-30T15:46:08","modified_gmt":"2026-04-30T15:46:08","slug":"limiting-capital-gains-tax-changes-to-new-investments-would-severely-delay-budget-reforms-deloitte-says-australia-news","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/640838\/","title":{"rendered":"Limiting capital gains tax changes to new investments would \u2018severely delay\u2019 budget reforms, Deloitte says | Australia news"},"content":{"rendered":"

Only applying changes to the CGT discount and negative gearing rules<\/a> to new investments would \u201cseverely delay\u201d desperately needed reforms required to repair a \u201cstructurally flawed\u201d budget and boost the economy, Deloitte says.<\/p>\n

The consulting firm estimated that a policy which cut the 50% capital gains tax discount to 33% and abolished negative gearing would only generate $500m over the first four years of operation if existing investments were not included \u2013 an approach known as \u201cgrandfathering\u201d.<\/p>\n

Phasing in the new tax settings for all existing investors over three years, in contrast, would boost the budget by a substantially larger $18.8bn over the first four years – money which Stephen Smith, a lead partner at Deloitte Access Economics, said could be used to pay for income tax cuts for Australian workers.<\/p>\n

The additional revenue could, for example, fund a 1 percentage point cut to the lowest marginal tax rate that would give an additional $500 back to a worker earning $45,000 a year.<\/p>\n

Alternatively, the nearly $19bn generated from scaling back investor tax breaks could fund more \u201cwholesale\u201d and productivity-enhancing income tax reform.<\/p>\n

One such reform would be a near doubling in the tax-free threshold to $35,000, then a flat 33% tax rate on income up to $300,000 followed by a higher 40% rate for income over that.<\/p>\n

\u201cA tax-free threshold of $35,000 would greatly improve (though not solve) the incentives for low-income and part-time workers to take on additional work,\u201d the report said.<\/p>\n

Jim Chalmers this week warned that mooted changes to investor tax breaks would not generate \u201ca huge amount of revenue\u201d over the coming few years.<\/p>\n

The treasurer said in any policy change Labor made, he wanted to \u201cmake sure that we recognise the decisions that people have taken in the past\u201d and pointed to \u201ctransitional\u201d arrangements that may mean new tax settings would apply to future gains on assets held at the time of the rule change.<\/p>\n

Smith said there were principled arguments why investors who had made investments in long-term assets should be shielded from tax changes, saying it was a \u201cpolitically palatable approach\u201d.<\/p>\n

\u201cThe transition is really important. I don\u2019t think it would make sense to say, \u2018Things are changing right now, and too bad\u2019 – that would cause unnecessary dislocation.<\/p>\n

\u201cBut we do think you can have a transition period that allows people to make adjustments to their asset holdings so they can organise their affairs. To be blunt, if it doesn\u2019t work for you after you lose the 50% CGT discount, then you can sell your asset before that takes effect.\u201d<\/p>\n

Deloitte\u2019s annual pre-budget analysis predicted smaller than previously estimated deficits as higher commodity prices and inflation boosted company profits over this year and the next.<\/p>\n

Graph showing predicted deficits on the Australian budget<\/a><\/p>\n

Savings from Labor\u2019s NDIS reforms would then deliver a further benefit across following years, Smith said, though he described the budget as \u201cstructurally flawed\u201d.<\/p>\n

\u201cThe big question is what they do with the money. There\u2019s every chance the government chooses to \u2018reprioritise\u2019 that money into something else, like more fuel security.<\/p>\n

\u201cThe changes to the NDIS are material and important and good. But the budget is all about net savings, so what they do with that money will determine what happens to the budget bottom line.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Only applying changes to the CGT discount and negative gearing rules to new investments would \u201cseverely delay\u201d desperately…\n","protected":false},"author":2,"featured_media":640839,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[64,63,44],"class_list":["post-640838","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-au","tag-australia","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/640838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=640838"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/640838\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/640839"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=640838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=640838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=640838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}