New figures show the Capital Gains Tax discount will blow a quarter-trillion dollar hole in the budget over the next decade.
Parliamentary Budget Office analysis, commissioned by the Greens-led Select Committee into the Operation of the CGT Discount, shows it will cost the budget $247 billion over the next ten years.
This is considerably more than the $205 billion it has cost over its entire 25 year history.
The analysis shows that the richest 1% of income earners will get a staggering 59% of the benefit from the CGT discount this financial year, rising from previous analysis 54%.
Comments attributable to Greens Economic Justice spokesperson Senator Nick McKim:
“The evidence keeps piling up against the most unfair tax rort in the country. Every time you crunch the numbers it just gets worse.”
“The capital gains tax discount has blown out into a quarter-trillion-dollar joke that overwhelmingly favours the super-wealthy, who have had it far too good for far too long.”
“This tax break cuts straight across any claim of fairness. Nearly 60 per cent of the benefit goes to the richest one per cent, while just 4% of the benefit goes to people under 35.”
“It means that Australians who go to work each day pay double the tax than someone who earns the same amount flipping investment properties.”
“Instead of supporting productive investment, the CGT discount is now overwhelmingly used to subsidise speculation on existing properties, driving up prices and making home ownership even more difficult for renters.”
“Labor cannot keep talking about a fair go for workers and fixing intergenerational inequality while defending the most unfair tax break on the books.”
Greens Housing spokesperson Senator Barbara Pocock:
“It’s clear that Labor cares more about property hoarders than it does about renters, first home buyers and people experiencing homelessness.
“Labor’s response to the housing crisis is making things worse. It is more concerned about rewarding property investors with tax breaks than about investing in social housing, homelessness services, and rent assistance altogether.
‘Labor needs to stop treating housing like a game of monopoly. It needs to scrap the tax breaks for wealthy property investors and directly build social and affordable homes.”
“Massive tax breaks for wealthy property investors are cooking our housing system. Negative gearing and the capital gains tax discount let cashed-up investors outbid everyday Australians — and young people are the ones paying the price.
“Australia’s housing system is rigged for the wealthy; it’s a system designed to drive up the cost of housing, generating enormous wealth for the few while increasing rents for the many who haven’t won the generational lottery.
“Reigning in investor lending growth would be celebrated by renters and aspiring home owners who otherwise feel nothing but despair as they watch a repeat bout of runaway housing price inflation.