Coalition pledges $70bn repeal of Labor’s tax reforms ahead of 2028 election

The Coalition has formally pledged to repeal Labor’s proposed reforms to negative gearing and capital gains tax (CGT) should it win the next federal election, framing the measures as economically damaging to investors and young Australians. Opposition leader Angus Taylor and shadow treasurer Tim Wilson have described the budget changes as “toxic,” vowing to reinstate more generous tax rules for property investors and those utilising trusts to minimise liabilities.

The reforms, introduced in the 2026 federal budget by Treasurer Jim Chalmers, mark a significant departure from Labor’s previous election commitments. The package ends negative gearing for new investment properties and reduces the CGT discount from 50% to 25% by 1 July 2027. These changes are scheduled to coincide with the full implementation of the tax suite ahead of the next election, which is due by mid-2028.

Wilson argued that the government’s approach was built on “broken trust” and would “kneecap young Australians,” while Taylor stated the Coalition would fight the proposals through parliament. The opposition leader indicated that a future Coalition government would seek to roll back these taxes, although he initially left open the possibility of supporting the measures if the government conducted a review of its small business taxation and CGT policies in response to investor criticism.

The financial implications of the Coalition’s stance are substantial. The opposition estimates that its repeal plan would leave the federal budget approximately $70 billion worse off, necessitating additional savings or revenue measures to offset the shortfall. This fiscal gap underscores the scale of the policy divergence between the major parties as they prepare for the upcoming electoral contest.

On the crossbench, Greens leader Larissa Waters demanded greater detail before committing to pass the legislation. Waters characterised the property investment changes as “tinkering around the edges,” noting that up to 95% of the benefits of existing negative gearing rules would remain. She called for the government to extend the new $250 tax offset to approximately four million low-income earners and welfare recipients below the tax-free threshold.

Prime Minister Anthony Albanese has ruled out such an extension, stating the offset is designed to benefit those who are actively working and paying tax. He argued that providing tax cuts to individuals below the tax-free threshold was logically inconsistent, as they are not currently liable for income tax. The government’s position remains firm on the core tax reforms, despite the opposition’s pledge to dismantle them and the Greens’ demands for broader social concessions.