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.
