{"id":675994,"date":"2026-05-17T03:48:09","date_gmt":"2026-05-17T03:48:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/675994\/"},"modified":"2026-05-17T03:48:09","modified_gmt":"2026-05-17T03:48:09","slug":"jim-chalmers-defends-impact-of-tax-changes-on-young-investors","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/675994\/","title":{"rendered":"Jim Chalmers defends impact of tax changes on young investors"},"content":{"rendered":"

Treasurer Jim Chalmers has defended the impact of the government’s proposed tax changes on young people who use the share market and rentvesting to save for a deposit.<\/p>\n

Why millennials and gen Z feel ripped off by this budget<\/a><\/p>\n

The prime minister says this budget is about fixing intergenerational inequality, but online, gen Z and the millennials are hearing a different narrative.\u00a0<\/p>\n

Tuesday’s federal budget laid out a plan to reduce the Capital Gains Tax (CGT) discount and scrap negative gearing for all but new homes, with a caveat to grandfather existing assets.<\/p>\n

Critics argue targeting CGT, which applies to all investments including new shares and crypto, limits one of the only wealth-growth avenues available for young people.<\/p>\n

But Mr Chalmers said under the existing CGT settings, shares had been “under compensated” for two decades, arguing it was better for people to invest based on economic outcomes rather than tax outcomes.<\/p>\n

“We’re taking one of the big distortions out of the market,” he told Insiders.<\/p>\n

“By taking that distortion out of the system, it is a fairer more neutral treatment of investment.”<\/p>\n

The Coalition had promised to reverse Labor’s tax reforms if elected.<\/a><\/p>\n

Shadow Treasurer Tim Wilson said the changes were “knee-capping” self starters.\u00a0<\/p>\n

“Young Australians are buying shares, ETFs and crypto at record rates,” he said.<\/p>\n

“The idea that the treasurer can dictate to Australians their pathway, their dreams, their success, is not just arrogant, it’s ignorant.”<\/p>\n

Rentvesting still available on new builds<\/p>\n

Mr Chalmers said young people would still have the opportunity to utilise negative gearing to rentvest, if they were to purchase a newly built home.<\/p>\n

Here’s how the budget’s tax changes will affect you <\/a><\/p>\n

Answers to all your questions about the federal budget’s changes to negative gearing and the capital gains tax.<\/p>\n

Rentvesting is a strategy where people rent a home that suits their lifestyle while purchasing a property in a more affordable area to enter the property market.<\/p>\n

“They can continue to do that for the home that they already own, and they continue to do that in the future for new builds, which would be a very positive contribution that they would be making to our communities,” he said.<\/p>\n

Some experts have warned rentvestors could be disadvantaged if they purchase new homes, because the value of the house would depreciate at a faster rate than the value of the land increases.<\/p>\n

Mr Chalmers said rentvestors represented a small proportion of people under 35.<\/p>\n

“In terms of numbers, its much less than 5 per cent of people under 35 have got rental income, but that includes owner-occupiers and includes people who are positively and negatively geared,” he said.<\/p>\n

Housing tax reform is one part of bigger project to fix Australia<\/a><\/p>\n

At the turn of the century, “aspiration” described Australians who wanted to put their kids into private school and university, and to build their wealth by getting an investment property or two. Today, it means something humbler.<\/p>\n

“Well under 5 per cent of people under 35 are doing this.”<\/p>\n

Prime Minister Anthony Albanese said by rentvesting in new builds, young people would play their part in boosting supply.\u00a0<\/p>\n

“The difference is that not only will they be building an asset and wealth for themselves, they will be building an asset and wealth for the nation at the same time, boosting supply,” he said.\u00a0<\/p>\n

“That is a common-sense change.”<\/p>\n

Opposition tax indexation policy labelled ‘irresponsible’<\/p>\n

Opposition Leader Angus Taylor used his budget reply speech to pledge to scrap the tax changes, as well as outline a plan to index income tax brackets to inflation.<\/p>\n

The proposal would save the typical taxpayer $250 in its first year and about $1,000 annually from the fourth year, but the opposition has not laid out how much it would cost or their plan to pay for it.<\/p>\n

Mr Chalmers labelled the scheme “irresponsible” and argued it would add a quarter of a trillion dollars to national debt over the decade, when counted alongside tax changes proposed by the government that the Coalition has said it would support.<\/p>\n

Labor’s federal budget includes an ongoing $250 Working Australians Tax Offset (WATO), which would flow to an estimated 13 million workers every year.<\/p>\n

The tax break, which would kick in from July 2028, will cost $6.4 billion in the first two years of its operation.<\/p>\n

The federal government plans to use the revenue raised from their tax changes to pay for the WATO.<\/p>\n

Mr Taylor said the WATO changes were a smokescreen for increased income tax down the road.<\/p>\n

“This betrays the fact that the government plans to raise income taxes,” he said.<\/p>\n

“The faster inflation goes up, the faster they hike them. Our plan is to contain them.”<\/p>\n

He said the costings for the plan over a six-year period was about $22 billion.<\/p>\n

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