With the May 12 Budget looming, a ‘leaked’ plan from Treasurer Chalmers has all the hallmarks of a Blackadder episode — a bold, supposedly brilliant scheme that just might work, if politicians can keep their hands off it!
It’s leak time for the Budget! And like Rowan Atkinson’s famous Blackadder sidekick, Baldrick, Treasurer Jim Chalmers has a “cunning plan” to lower the capital gains tax discount and believe it or not, make it look like a virtuous and good policy decision that will also help fill “the biscuit barrel”.
The leak comes from the Daily Mail’s Peter van Onselen (PVO) who says he has the inside info on what will be in this upcoming Budget for property investors, who’ve enjoyed a 50% discount on their investment properties if they were held for over a year, along with the tax benefits of negative gearing.
PVO says Chalmers (let’s call him Baldrick) has won the approval of Anthony Albanese (aka Blackadder) for his cunning plan.
This is it in a nutshell, with bad news first:
- The capital gains tax on older homes will be slashed, possibly to 35%.
- Investment into new houses will keep the 50% CGT discount.
- New apartments and townhouses will get a 70% CGT discount!
- Negative gearing won’t be changed to avoid the election curse of Bill Shorten!
- And existing investors would have their current properties’ CGT discount grandfathered.
PVO says the Treasurer has been influenced by a 2025 McKell Institute Report by UNSW Professor Richard Holden and the institute’s CEO Edward Cavanough. However, some of these main points from this sensible Report could be changed after other ministers and Treasury mull over the budget bottom line implications of these changes.
Obviously, while Chalmers will keep the good news for a big housing headline that will say Labor is helping fix our shocking supply of homes problem, there still could be some tinkering, such as the grandfathering clause might only apply to one or two properties held by investors.
While such a change would deliver less financial benefit to the budget, it wouldn’t offend Labor voters with an investment property or two. Meanwhile those with more than one or two rented out properties are probably committed Labor party haters, which means the political impact is hardly negative for the Government.
On the other hand, economists will praise the impact on the supply of housing from a CGT discount of 75% on new apartments and townhouses, while property developers and builders will be popping champagne because these changes will create a new supply of buyers for newly built apartments and other detached homes.
Driven by the McKell Institute, this plan is a cunning one, but only interfering politicians could ruin it.
And for those who were never Blackadder fans, here’s a look at one of Atkinson’s insulting conversations with Baldrick, played by Sir Tony Robinson:
Blackadder: “Pass the biscuit barrel” (that’s almost empty).
Baldrick: “Don’t worry Mr B, I have a cunning plan to solve the problem”.
Blackadder: “Yes Baldrick, let us not forget that you tried to solve the problem of your mother’s low ceiling by cutting off her head”.
Classic stuff! And oh so appropriate for the Treasurer hatching a Budget plan with his PM.
Just what we need…..
Lots of cheaply made, ugly, shoebox apartment blocks popping up here there and everywhere so investors can look for a 70% discount.
This country used to be so good