Australia’s Prime Minister Anthony Albanese has taken an unusually personal approach in defending the current government’s overhaul of negative gearing and capital gains tax discounts.
Using references to his upbringing as a child living in public housing as he seeks to make a case for a new budget policy that has incurred harsh criticisms for breaching the terms of the election campaign promise.
The proposed reduction in capital gains tax discounts to 50% and linking this to inflation, beginning from July 2027, with a 30% minimum tax rate.
The political problem for Labor is stark.
Albanese repeatedly and emphatically ruled out any change to either policy before the 2025 election.
Last April, under pressure from a journalist to be absolutely clear, he answered yes, for the fiftieth time, he said.
In August he told a productivity roundtable that his government would introduce only the tax policy it took to voters.
Now, he finds himself defending his change of heart, having turned to his own life story to do so.
Raised by a single mother who spent her entire 65 years living in the same public housing unit, he has drawn on his own biography in his many years in politics.
It’s been part of his argument that he understands what it’s like to face hardships, including difficulty getting stable housing and why it’s exactly these difficulties that motivate the government’s actions.
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He has couched the decision as one that deals with intergenerational equity issues.
Albanese claims that it will allow 75,000 young Australians to purchase their first home in the next ten years, framing the decision as an attempt to equalize the playing field between those who have been successful in their investments.
He has further defended himself against accusations that he will destroy the dreams of the next generation of investors by stating that they can still negatively gear new properties.
Albanese and Chalmers have been answering questions for days about the broader implications of the budget, including the effect of the capital gains changes on small business, start ups and family trusts.
Privately, a number of Labor figures have asked why ministers settled on an option so complex they were still explaining it a week later.
Albanese has admitted the new trust arrangements will take longer to finalise and will be legislated later this year.
The Coalition has accused Labor of misleading voters and Mr Albanese has acknowledged he expects a big and well funded campaign against the changes.
The decision is a tough one but the right one, he says.
