I bought my first home because I got lucky in the stock market. After holding an ASX investment for a year, the returns \u2013 half tax\u2011free \u2013 helped me scrape together a deposit for a one-bedroom apartment in Canberra. But it was a workaround for a deeper problem: a steady salary was not enough to secure a basic need like housing. For a long time, I believed home ownership was out of reach.<\/p>\n
Peter Costello<\/a> would recognise that story. He says the government is slugging investors with a new tax that will \u201cpunish young people trying to build wealth\u201d<\/a> and leave them with \u201ca lifetime of these higher taxes\u201d. And he has a point. The federal budget proposes to wind back the old rule that taxed only half your profits<\/a> from selling investments, which means more of those gains will now be taxed. For people like me, who leaned on shares to get ahead, this matters.<\/p>\n But it is a stretch to say this budget \u201cwill not help the young in the slightest\u201d. To see why, you have to look at how we got here.<\/p>\n For years, Australia\u2019s tax system leaned hard on wages<\/a> while giving a lighter touch to income from assets. The capital gains tax discount and negative gearing made it easier for those who already owned assets to grow them faster<\/a>, often paying less tax along the way. Over time, that tilt helped push house prices far ahead of incomes<\/a>, locking more people out. This budget tries to unwind some of that by taxing more of those gains and limiting how losses are claimed, nudging the system back towards balance between work and wealth.<\/p>\n That, in essence, is what sits behind the government\u2019s push to address \u201cintergenerational equity<\/a>\u201d. Strip away the jargon, and it means a fairer sharing of the load between those who have assets and those who do not. The generational reality is blunt. You can work full-time, do everything right, and still not be able to buy a home. And when the ladder disappears, people improvise.<\/p>\n Which is why some younger Australians have turned to shares, exchange-traded funds and small businesses<\/a>. To me, these are practical workarounds to build financial security. No wonder those saving through shares are uneasy<\/a>.<\/p>\n The backlash to the budget<\/a> reflects this tension. Startup founders warn it will be harder to attract talent with equity<\/a>. Small business owners, including many women who built flexible work around caring, see a hit to risk-taking<\/a>. Younger investors, many of whom entered the market during the pandemic, are recalibrating. These concerns are real and they deserve more than dismissal.<\/p>\n Still, parts of this debate have tipped into caricature. They focus on the immediate hit to investors while skimming over the structural problem that produced this generation of reluctant investors in the first place. If anything, the risk is less that the reforms go too far, and more that they do too little.<\/p>\n Costello is right about one thing: these changes will not deliver an \u201ceasy entry to home ownership\u201d. Even optimistic forecasts suggest only marginal impacts on house prices<\/a>. The simple reason is that housing is as much a supply problem as it is a tax one. Until more homes are built, changing tax settings will only go so far. And here the ambition remains constrained<\/a>.<\/p>\n Intergenerational inequity is not just about housing and tax concessions. It is also about what younger Australins inherit<\/a>: slower wage growth, heavier income tax burdens and a public balance sheet carrying large deficits and rising debt. I\u2019d say that younger workers are being squeezed twice; paying more tax on their labour while missing out on the tax advantages tied to wealth, then inheriting the bill.<\/p>\n Which is why some of the most interesting ideas sit outside this package. If you want to help younger Australians save for a deposit, you could ease the tax burden on wages directly<\/a>. The veteran unionist Bill Kelty has suggested<\/a> that any extra revenue from these changes should be returned as income tax cuts for workers. Others point to deeper structural reform<\/a>, replacing stamp duty, rethinking consumption taxes or taxing windfall profits more effectively, including in sectors such as gas exports, where Australia still taxes lightly by international standards.<\/p>\n But at the same time, doing nothing is not a neutral option. The previous settings did not simply reflect the market. They helped shape it in ways that rewarded wealth more than work and made property the centre of economic security. Rebalancing that system will always involve trade-offs.<\/p>\n