Paul Keating urges Labor to stick with capital gains tax overhaul and avoid exemptions that would hurt economy
Summary
Paul Keating has urged the Labor government to continue with its planned changes to capital gains tax (CGT) without making exemptions for commercial assets. The government wants to shift the CGT discount to an inflation-based model to reduce housing investment distortions and encourage more balanced economic growth.Key Facts
- Labor plans to change the 50% discount on capital gains tax to a system that only taxes profits above inflation.
- Small businesses with revenue under $2 million will be exempt from these CGT changes.
- Paul Keating supports these changes and warns against exempting commercial assets, which could cause more economic problems.
- Treasurer Jim Chalmers says past tax policies favored established housing too much, harming other investment types.
- Investors and entrepreneurs oppose the changes, saying they will reduce investment and risk-taking.
- The legislation also includes changes to negative gearing, a $1,000 standard tax deduction, and a $250 tax offset for workers.
- Labor aims to pass this legislation by July before parliament’s winter break, but the opposition Coalition wants to delay it until July 2027.
- There may be Senate inquiries and negotiations involving the Greens and the Coalition about the tax changes and disability funding.
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