The AFR View

We have tax politics, not reform of taxation

Ruling out scrapping the $48 billion a year capital gains tax break on the sale of family homes limits the genuine conversation we need to have about overhauling the tax system.

Mar 3, 2023 – 5.23pm

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Treasurer Jim Chalmers was quite right this week. On breakfast television he repeatedly refused to rule out scrapping the $48 billion a year capital gains tax break on the sale of family homes, as speculation mounted on what other changes might follow his move on superannuation tax concessions.

When Prime Minister Anthony Albanese hurriedly stomped on the family home idea, he could not explain why it would be wrong, only that it was “a bad idea”. The Prime Minister means the politics would be bad. But he couldn’t offer why it would be bad tax policy. The refusal to even ask the question goes to what’s wrong with the tax system – and why ad hoc tweaks such as the Treasurer’s reasonable curbs on tax breaks on earnings of $3 million-plus super accounts still ultimately distract from the full-on reform that’s needed.

The Australian Financial Review’s succinct take on the principles at stake in major domestic and global stories – and what policy makers should do about them.