If pre-budget rumours and press speculation are to be taken with less than the usual grain of salt, the budget which the treasurer, Jim Chalmers, will present on the evening of 12 May will contain some genuine, meaningful tax reform. Not nearly as much, to be sure, as Allegra Spender or Mike Baird and Anna Bligh have called for before – but nonetheless, a welcome change from the masterly inactivity which has characterised Australia’s tax system for most of this century thus far.

Specifically, reports indicate that the Albanese government will finally make changes to the excessively generous capital gains tax (CGT) regime introduced by the Howard government in 1999 – as Labor promised it would do if it won the 2016 or 2019 elections, but at which it has since baulked.

The 50% discount (relative to what would otherwise be paid) on capital gains was recommended by the Review of Business Taxation conducted by then prominent business leader John Ralph in 1998. He said that this would turn Australia into “a nation of shareholders and entrepreneurs”. It didn’t. The proportion of the adult population who own shares (according to the ASX Australian Investor Study) has dropped from 41% in 1998 to 38% as of 2023 (having fallen to as low as 33% in 2014):........

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