Labor’s capital gains tax and negative gearing reforms are a welcome start. But fixing housing will require broader tax reform, state cooperation and far greater investment in social housing.

The Albanese government, in a rare show of principle, has secured the passage of reforms to capital gains tax and negative gearing. They are to be heartily congratulated for correcting 26 years of poor policy adding to the range of inflationary measures on house prices in Australia. Many remain but a start on long-lasting positive reform has been made.

The announcement in Jim Chalmers’ 2026 budget was met with the predictable complaints from the property industry, the opposition/s and the Murdoch-manipulated media, focused on the unfairness of it, particularly to start-ups (upstarts?), who have now gained concessions that slightly dilute the changes. Former Treasury boss Ken Henry has argued these have now added a further distortion to our tax arrangements by deferring taxes from current income to future capital gains at a lower rate. Others have defended the changes as reasonable for start-up businesses.

Parts of the housing industry have shouted about the ruination of the housing market, a drying-up of supply, increased rents, robbing the young of wealth-creating opportunities and other calamities. They are the expected squeals of pigs whose snouts have been removed from this trough. Other troughs remain.

As two people who argued against the initial measure to introduce the 50 per cent CGT discount in 1999, we welcome the changes, even slightly diluted, and hope it represents the tip of the spear of tax reform rather than Labor now taking a rest in the comfy chair of “job done”. There is so much more to do.

Once the hullabaloo around the CGT and negative gearing changes has settled, hopefully engineering a minor correction of between 5 per cent to 10 per cent to house prices in Australia – supported by a near majority of Australian households in recent polling – it ought to be........

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