Chalmers makes more tax tweaks to temper budget blow

Shadow treasurer Tim Wilson said Chalmers had been “forced by the prime minister into his fourth humiliating backdown over his budget”.

“The backdown is welcome, but it is embarrassing that certainty and confidence has been jeopardised for so many businesses because we have an out-of-his-depth treasurer.”

In the May budget, Labor scrapped negative gearing on existing properties and created new rules to stop tax minimisation by using trusts. It also moved from a flat 50 per cent CGT discount to an inflation adjusted model that could lead to lower taxes for investors in low-growth, high-dividend blue-chip shares but higher taxes on quicker growing firms that create dynamism.

Labor promised before the last election it would not pursue such policies, but said it changed its position due to the urgency of solving the housing crisis. House prices have continued their pre-budget tumble due to a combination of high-interest rates and the tax changes.

Labor has already walked back a tax on trusts that the Coalition weaponised into a “death tax” scare campaign, got rid of a tax that would have penalised people whose spouses died, and backtracked on elements of a new minimum tax on trusts.

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