What are the main changes in the Albanese government's new Australian tax package?

The federal government is axing negative gearing for future established properties, meaning investors can only claim net rental losses against tax for newly built homes or existing holdings. Additionally, the 50 per cent capital gains tax (CGT) discount is being replaced with an inflation indexation model.

How will the new inflation indexation model for capital gains tax work?

Instead of giving investors an automatic 50 per cent discount on their capital gains tax obligations, the new model calculates tax based on real, inflation-adjusted gains. Treasury argues this delivers a more accurate adjustment across different asset classes and holding periods.

What did Treasury reveal about the tax package's impact on Australian economic growth?

Senior Treasury officials confirmed at a Senate hearing that the tax package will not boost Australia's macro economic growth or productivity forecasts. Despite Treasurer Jim Chalmers' budget statements that the measures would lift living standards, Treasury's medium-term economic parameters remain completely unchanged.

How does Australia's current productivity data context frame these tax changes?

The reforms come at a volatile time, as Australia’s productivity growth has stagnated, edging up by just 0.3 per cent over the year to March 31. This is significantly below the Reserve Bank of Australia's lowered two-year forecast of 0.7 per cent and Treasury's long-term assumption of 1.2 per cent.

What are the main bear points for retail property and crypto investors under these rules?

The removal of negative gearing on future established properties limits a traditional tax-minimisation strategy for everyday property investors. Furthermore, the minimum 30 per cent tax on real capital gains applies broadly across property, equities, and digital assets like crypto, potentially reducing net trading margins.

What are the main bull points and business incentives included in the budget?

To offset broader tax hikes, Treasury highlighted a $3.5 billion support package aimed at business investment and innovation. This includes expanding venture capital incentives, reintroducing loss refundability, and making the $20,000 instant asset write-off permanent for small businesses.

Image for illustrative purposes only. Not a real photo.

Treasury confirms Labor tax changes won't boost growth

Written by Heidi Cuthbert Published Jun. 4 2026Last Updated Jun. 4 2026

Federal Treasury has confirmed the Albanese government's landmark tax overhaul will not boost economic growth or productivity, directly contradicting Treasurer Jim Chalmers' budget promises of a more productive economy.

Senior Treasury officials told a Senate hearing on June 4 that the contentious package — which axes negative gearing for future established properties and replaces the 50% capital gains discount with an inflation indexation model — has left the department's medium-term economic forecasts entirely unchanged.

Treasury Assistant Secretary Angelia Grant admitted there was no shift in medium-term parameters, confirming critics' arguments that the reforms focus on wealth redistribution rather than expanding economic output.

The revelation comes amid economic anxiety, with recent data showing productivity growth has stagnated at just 0.3% over the year to March 31.

While Treasury Secretary Jenny Wilkinson defended the package, arguing a $3.5 billion business support measure and the new indexation model would eventually optimise capital allocation, Coalition and Greens senators sharply questioned the changes.

Nationals treasury spokesman Matt Canavan warned the reforms simply increase revenue and government size, contrasting them unfavourably with the productivity-driven reforms of the Hawke-Keating and Howard eras.

Meanwhile, the Greens raised integrity concerns over structural elements of the legislation, specifically the eight discretionary regulatory powers granted to the Treasurer to alter negative gearing and capital gains rules post-enactment.

Although Wilkinson noted parliament holds disallowance powers over these instruments, minor parties and independent crossbenchers have flagged the lack of modelling and sweeping ministerial powers as key battlelines for the upcoming parliamentary enquiry.