Opinion: Budget tax reforms insufficient without supply-side action

In an opinion piece published in The Guardian on 29 May 2026, Intifar Chowdhury argues that the federal budget’s proposed changes to capital gains tax and negative gearing represent a necessary, albeit limited, rebalancing of a tax system that has historically favoured asset wealth over labour. Chowdhury, who secured a deposit for a Canberra apartment using tax-free returns from an ASX investment, describes home ownership as a structural supply issue rather than a purely fiscal one.

The author contends that while the reforms will impact young Australians, the prevailing criticism that they are too harsh risks overshadowing the deeper reality that housing affordability is constrained by a lack of supply. Chowdhury asserts that until more homes are built, adjusting tax settings will have only marginal effects on house prices, meaning the measures alone cannot deliver an easy entry to home ownership.

Former Treasurer Peter Costello has criticised the reforms, claiming they will punish young people trying to build wealth and impose a lifetime of higher taxes. Chowdhury acknowledges the validity of concerns from startup founders and small business owners who rely on equity and risk-taking, noting that these are practical workarounds to a system where steady salaries are insufficient for basic needs.

However, the piece argues that the debate has tipped into caricature by focusing on immediate investor hits while ignoring the structural inequities that created reluctant investors in the first place. The current tax tilt, facilitated by the capital gains discount and negative gearing, has allowed asset holders to grow wealth faster than wage earners, contributing to intergenerational inequity where younger workers pay heavier income tax burdens while missing out on wealth advantages.

Chowdhury suggests that meaningful reform requires addressing structural issues beyond the current budget package, such as replacing stamp duty, rethinking consumption taxes, and taxing windfall profits in sectors like gas exports. Unionist Bill Kelty has suggested that revenue from these tax changes should be returned as income tax cuts for workers, a move intended to ease the burden on those who have been squeezed by the disparity between labour and wealth taxation.

The article highlights that older asset holders are largely protected from these changes due to grandfathering provisions, meaning younger Australians will feel the shift more acutely. The author concludes that doing nothing is not a neutral option, as the previous settings helped shape an economy that rewarded wealth over work, making the rebalancing of the tax system an unavoidable trade-off.