Chalmers called this budget tax reform. Investors call it vandalism. Will you sign this petition about a Budget that quietly reaches into the pockets of aspirational Aussies? Albo and his cronies thought no one would notice. They were wrong!
The backlash over the Budget has given birth to a petition protesting at what’s called the economic vandalism that’s being performed on aspirational Australians at the hands of the Albanese government’s Treasurer Chalmers. And he’s sharing the heat with the Prime Minister, who has underestimated the magnitude of the pushback against the tax changes and, undoubtedly, the negative economic effects of Labor’s proposed changes to the capital gains tax (CGT) and negative gearing.
The driver of the petition and campaign against the Budget’s tax changes is fund manager Geoff Wilson, who spearheaded the fight against Bill Shorten’s changes to negative gearing and franking credits for retirees in 2019.
The Australian reports that “the Wilson Asset Management founder and chairman will on Monday issue a call to arms to his 130,000 shareholders, urging them to sign a petition protesting the capital gains tax changes”.
This sums up why Wilson thinks these changes are not just an assault on the wealthy: “We believe that the government has fundamentally underestimated how many Australians are affected by these changes. This is not a debate about the very wealthy. It is about teachers, nurses, tradies, small business owners, farmers, retirees, professionals and younger Australians who are trying to build financial independence through long-term investment.”
I totally agree with Wilson. I have to say that I don’t always agree with this guy but on this subject he’s on the money.
Recall that the changes mean most investors will pay more capital gains tax going forward and negative gearing will no longer apply to any investor buying existing properties.
Here are the reasons I think this petition is a MUST to sign:
1. The changes will send investors after new properties where negative gearing will remain, but this will pit investors against young home buyers of new homes.
2. Young people trying to build wealth by investing in the stock market will have a greater capital gains tax bill when they sell shares. This will make saving for a deposit harder.
3. The AFR headline today sums up how this Budget is hitting the property sector: “Sydney, Melbourne property markets ‘tank’ as auctions remain flat.”
4. Start-up businesses that offer shares in the business to employees will have to pay higher wages instead or employees can expect a bigger tax bill if the business succeeds.
5. All businesses will have to get a valuation done before July 2027. These can cost between $3,000 and $10,000. And there aren’t enough valuers to cover over two million businesses.
6. At a time when three interest rate rises and elevated petrol prices are slowing the economy and even threatening a recession, this Budget creates disincentives for investing, which is crazy economics.
7. The Treasurer tells us all the time that our low productivity not only hurts our material welfare, it also increases inflation. So the Budget’s assault on investors and businesses i.e. those who promote productivity don’t look sensible.
My opposition to these changes is not vested interest driven, as they increase the demand for financial planning advice and I own a financial planning business. These changes make me more valuable!
I also have a listed fund on the stock market — the Switzer Dividend and Growth Fund, with the ticker code SWTZ — and experts say these changes will encourage investors into more steady income-paying investments like SWTZ, at the expense of high growth investments that will attract the new, tougher capital gains tax.
The country’s only hope for intelligent changes to this Budget will be the Senate’s opposition. Hopefully, this petition will motivate the country’s politicians to look at the profound problems with some of the Treasurer’s so-called tax reforms. History reports that on the cross Jesus Christ said: “Forgive them Lord, for they know not what they do.” But I say: “Don’t forgive them Australia, for they should know what they’re doing!” And it’s not smart.
If there is a petition to stop labours budget on all grounds CGT and Trust Tax etc please count me in they are a train wreck and want all Australians to become subservient
How do I join this petition?
Peter, I looked at an old but beautiful house at the weekend. We need to move for work. I was the only person at the open home. Ideally we could rent out our existing home, converting it to an investment property, it would be our first, and buy the older house about 1.5hrs drive from where we currently live. However I’ve been reading all about this budget at the weekend and what I just proposed will not make any economic sense. In addition. The house I looked at is priced at what it was worth prior to the Iran war & the budget. Some commentators are saying there could be anywhere between a 5%-30% fall in values. This has put the frighteners on us. We’re already taxed to the eyeballs we both work and don’t own any tax deductible investments. It looks like our main asset the family home will be worth a lot less. In the meantime I am watching each week as more & more rorting of expenses by parliamentarian’s is revealed. It now appears Labor lied to get into Government, have their snouts firmly in the trough and are giving people like me & my wife that work & pay taxes the two fingers followed by the one finger. Is it no wonder that many Australians are looking into ways to put any wealth they own beyond the greedy fingers of this government.
capital gains tax in china is 20% added to income.
if they pay much less than us no wonder they come here and buy up the farm.
make a million in china pay 200000 tax ,
make a million in australian pay 47 %
Buy a 2 bed unit in Sydney , off the plane from China .. mortgage nil
Make a million in australia pay 470000 tax
530000 left for me .
Buy a unit to invest 800000 oh i need a mortgage … rush to the bank
Mortgage plus fees costs etc 270000 MORTGAGE
IS THIS FAIR ???????
WE LIVE ON AN ISLAND FULL OF RICHES >
ITS CHEAPER FOR NON AUSTRALIANS TO BUY OUR OWN PROPERTY .
GET RID OF THESE IDIOTS WHO THINK THEY ARE SMART
WE HAVE THE WORST GOVERNMENT IN HISTORY
DAD buys an investment unit for his daughter … now he is penalied by excessive tax to provide her a home when she goes nursing , policing or teaching .
BUT OH the government will support you to get a home by taxing DAD to give it to someone off the boat !!!
Albanese only worked outside being a politician for 9 months. Chalmers as far as I know has only worked being a politician . Neither has any idea what its like to work in the
private enterprise sector.
Totally agree. The other big sting is the ” minimum 30% tax on capital gains”. Any gains should be taxed at the marginal tax rate for each investor. The proposed budget is a blatant money grab and will hurt investments and slow productivity.
Removing negative gearing ang CGT together will just push up rents so the investors can cover their costs. Its obvious to an Investor.
One point people seem to be missing is that if house prices decrease then all those first buyers on the 5% scheme as well as recent buyers, won’t have any equity in their homes and could very likely face a call or have to sell into a weaker market.
How unbelievably self-serving is this comment on the budget.
It is quite wrong that fortunate retirees like myself can avoid tax within the law while hardworking honest wage-earners pay their full fair share.
We need to address the discrepancy between tax on wages and tax on assets.
Taxes are the price we pay for a society and a country that has schools, Medicare, a trusted legal system, NDIS, and other services that other countries can only dream of.
Is the author happy that schools, hospitals, aged care, universities, and CSIRO research are underfunded? We need resources to be the clever country.
Everyone should pay their fare share.
Albo and Chalmers have no idea of how effected people can be. They have double standards.
A budget riven with such fiscal incompetence it could have only been conceived by committed socialists who have no regard for the very people it claims to benefit.
The deceit of this federal government in relation to its election 2022 promises will go down in political history as the greatest con job on the Australian people since Federation.
I am a self funded retiree. We have used property as a vehicle to achieve this so we would not be a burden on the social welfare system in Australia or our families. Labor has now effectively wiped that out for us. The Capital Gains concessions were the only thing that made holding rental properties worthwhile. With all the changes to the law around renters having more and more rights and the people who owe their banks hundreds of thousands of dollars, it makes being a landlord very stressful. There is always money you are putting in out of your hip pocket but the offset was in the future you would have been repaid those out of pockets expenses when you sell. That is gone. The minimum 30% tax on CGT so that people like us, who have been paying taxes all our lives and have planned to dispose of our assets when we retire, plus this has been our form of savings are going to be slugged heavily with this new tax. Where is the inspiration to make Australian’s want to NOT be on our welfare system.
So supposedly all about ‘inter-generational equity’ (make it easier to buy a home, blah blah blah) and instead we have wholesale changes to CG taxes (which has clearly not been discussed or thought through).
Poor old Jim is getting a lesson in retail politics while Albo is tearfully defending this mess.
Hi Peter,
I went to the Wilson site and signed the petition.
Great work!!
The amount of spin this government is feeding the Australian people is unbelievable.
It started well before they were elected with cheaper energy bills, better aged care, better opportunity for younger people to buy a home. It’s more than spin to get elected its blatant dishonesty and contempt for the Australian people. They have divided our Nation into different tribes. Setting groups against each other with now intergenerational distribution of wealth. A majority of young people rely of the Mum and Dad bank just to get by. They have not addressed their own internal issue of government over spending which has caused high inflation, high debt and a lower standard of living for every Australian.
Its a total ripp off!
This Government’s problem is they are terrible at managing money thats it!
Now they are coming to ripped us all off out of desperation! This is a Starlinist Government!
They are a bunch of liars!
Regards
Gilbert
You are on the money Geoff
Income tax should be just that! They wastefully spend all the income tax and then start taxing capital as if it were income! I wonder what will come next ….. a tax on breathing?
If you had an apartment/ house in an Australian city in the 70s and 80s you would have seen the value rise roughly in line with inflation. Then John Howards government turned housing into a place to make a lot of money rather than a place to live and we have all seen how the price of property has outpaced real wages by many multiples. Before 1995 a couple on average wages like a nurse, firey or cop could buy a house in a suburb not too far from the city, now they have to look to buy something regional just to get their toe in the market . In 1975 I was working as a storeman and my girlfriend was a nurse and without sacrificing too much we were able to purchase a house in Annandale an inner city suburb of Sydney. Today working in those jobs we would have no hope of buying a house within 35km of Sydney. I’m sure Mr Switzer can remember those days.
History has shown us that we get the politicians that we deserve!
We need to stop looking for easy hand-outs, which are simply an easy politicians’ distraction from the people looking at what will build a better & more vibrant Australia, both now & into the future.
Great comments here Peter and indeed from your subscribers. Honestly, are you surprised with this government’s performance to date? To see Chalmers, Gallagher and Albanese try and explain anything relating to finance budgets and the Australian Economy at large is just woeful to say the least.
And what is the net / gross debt Katy Gallagher???? I nearly fell off my chair when I saw her try and answer those simple questions during a recent senate estimate hearing.
when there is no alternative to managing your own retirement funds, the government has suddenly halted – CGT a long established way of people looking after themselves. the pollies are fine as they have hugely generous superannuation.
It’s simple. Labor lied to the Australian people to win an election. Time for a new election now so we can throw them out.
At the very least losses on the share market should be offset against the gains.
I am not convinced how the tax reforms address intergenerational equity. If it is about getting first home buyers a leg up in buying their first home, it is not convincing at all. How equitable is the new system when first home buyers of children of the well to do (e.g. the likes of Albo or Gallagher juniors) stand to benefit the most from this compared to the battlers who are struggling to make a living, let alone saving a deposit for a house? As I see it, the latest reform hits the latter group even more as rental is poised to go up. I hold the opinion that the tax reform will cause home prices to drop – significantly. This will certainly affect sentiments and consumption which are never good for the economy and treasury (e.g. less stamp duty, land tax, GST, income tax, more welfare etc). In summary, the justifications for the tax reform are vague at best but the risks and downsides are very real. Looks like Australia may be heading for our very own Brexit moment here.