Albanese Defends Broken Negative Gearing and CGT Promises as Critics Condemn Limited Scrutiny

Prime Minister Anthony Albanese defended his decision to limit negative gearing to new homes and reduce the capital gains tax discount during an economic summit hosted by Sky News on Friday. ” He added that capping the number of properties eligible for negative gearing instead of abolishing the concession would allow investors with multiple homes to “stack up” their losses on the highest-value property.

The prime minister has been censured by the teals, the Coalition and the Greens for proposing only two days of hearings on the reforms.

Treasury secretary Jenny Wilkinson said last week the measures were aimed at improving first-home buyers’ position relative to investors rather than increasing overall housing supply. Productivity Commission chair Danielle Wood was tasked last week with leading a separate review focused on increasing the number of homes built.

Wood said boosting supply would have a larger effect on prices than the tax changes.

She said the best realistic outcome from higher supply was moderating price growth to align with inflation or wages. 2 million homes by mid-2029. Wood’s review will examine planning controls, density limits, floor space ratios, car parking requirements and approvals processes.

She will deliver recommendations to Treasurer Jim Chalmers and Housing Minister Clare O’Neil early next year after groups are given two weeks to submit comments. Wood said taxes such as land tax and stamp duty were outside the scope of her inquiry. She said the federal government could use national competition policy to reward states for regulatory reform.

Labor has announced funds, including a $2 billion local infrastructure fund, to encourage states to act. Wood said after decades in which home values outstripped wages, productivity likely suffered because people invested in housing rather than assets that create jobs and growth. She said there was a fair question about whether the CGT discount supported innovation.

Chalmers’ budget included measures that gave businesses better cash flow while they were building up, Wood said. Polling has shown the budget rated poorly among all voter groups. It is opposed by all top business groups.

Independent MP Allegra Spender said she wanted tax reform but was concerned Labor’s package was flawed. The Housing Industry Association is urging the Senate to broaden the definition of “new housing” eligible for negative gearing to include knock-down rebuilds, granny flats and major renovations that meet modern building codes.