Labor's CGT plan flawed but better than what we have, economists tell inquiry

Leading economists have provided qualified support for the Albanese Government’s proposed reforms to Capital Gains Tax (CGT), telling a Senate inquiry that while the plan is ‘imperfect,’ it represents a significant improvement over the current framework. On the first day of hearings in Canberra, witnesses argued that the existing system disproportionately rewards property speculation and distorts the broader Australian economy.

The committee heard evidence from a range of policy experts who suggested that the status quo has exacerbated housing unaffordability for a generation of Australians. While acknowledging that the government’s specific adjustments contain technical flaws, the consensus among the academic cohort remained that doing nothing would be a far more detrimental outcome for the nation’s long-term fiscal health.

“The current tax trajectory is unsustainable; we are choosing between a flawed step forward and a disastrous commitment to the past.”

Opposition members of the committee questioned the timing of the reforms, raising concerns about the potential impact on mum-and-dad investors during a period of high inflation. However, the day’s testimony concluded with a firm recommendation that the legislative process proceed, provided that minor technical amendments are considered to ensure market stability.