Albanese government axes capital gains tax discount in budget shake-up
The Albanese government is set to overhaul capital gains tax rules in Tuesday’s budget. Treasurer Jim Chalmers will scrap the 50 per cent discount for assets held over 12 months. The move marks a shift from Labor’s earlier election promises.
Meanwhile, Finance Minister Katy Gallagher has admitted that past levels of climate spending are no longer viable. The budget will also include a $500 million fund to streamline environmental approvals.
Labor had previously campaigned to halve the capital gains tax (CGT) discount to 25 per cent in both the 2016 and 2019 elections. Both attempts failed, and the party later dropped the policy. Now, Chalmers has confirmed the discount will be removed entirely, acknowledging the change as a clear departure from past commitments.
Gallagher defended the government’s spending record, dismissing claims that its budget measures were driving inflation. She also admitted that the high levels of climate funding from Labor’s first term—amounting to tens of billions—would not continue. The new $500 million allocation for environmental approvals signals a more targeted approach. The budget announcement comes as housing affordability remains a major concern. Recent data shows Australians now need an annual income of around $200,000 to comfortably buy a typical house in most capital cities without facing mortgage stress.
The removal of the CGT discount will take effect from Tuesday’s budget. Climate spending will also be scaled back, with future investments focused on efficiency rather than previous funding levels. The changes reflect a broader shift in the government’s financial priorities.
