What is the Albanese government's proposed Australian tax overhaul?

The Australian government is proposing a sweeping tax reform that increases taxes on capital gains and trusts while scaling back negative gearing concessions. The policy aims to improve intergenerational equity by pairing these tax increases with a $250 tax offset for working Australians.

How does Labor's tax plan impact high-income earners in Australia?

According to Treasury analysis, the top 1 per cent of lifetime income earners will see their lifetime tax breaks cut from $700,000 to $300,000. This means the wealthiest 1 per cent would pay roughly $400,000 more in tax over their working lives under the new rules.

Who will foot the majority of the bill for these tax changes?

The tax increases heavily target the highest earners, with individuals in the top 10 per cent of lifetime earners projected to pay 60 per cent of the total tax raised. In contrast, the typical median income earner has historically only received about $5,700 in these tax benefits over their working life.

How will the proposed tax changes affect younger Australians and Gen Z?

Treasury modeling estimates that 90 per cent of Australians under the age of 30 will be financially better off under the new policy. The combination of the $250 tax offset and changes to negative gearing is intended to improve intergenerational wealth equity and make it easier for young buyers to enter the property market.

Why is the Australian government increasing taxes on capital gains and negative gearing?

The revenue raised from the tax overhaul is intended to fund long-term structural budget pressures, including an ageing population, expanding care services, and higher defence spending. Treasury noted that revenue generation must also be paired with spending restraint, such as capping the growth of the $50 billion National Disability Insurance Scheme.

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Labor tax plan hits wealthy to boost youth

Written by Liezl GambePublished May. 28 2026Last Updated May. 28 2026

The Albanese government’s proposed tax overhaul would hit Australia's wealthiest citizens while boosting the wallets of younger generations, according to new Treasury analysis.

Speaking at an Australian Business Economists lunch in Sydney, Treasury Secretary Jenny Wilkinson revealed that the top 1% of income earners would have paid an extra $400,000 in tax over their lifetimes if Labor’s changes had been active for the past 25 years.

Under the plan, lifetiame tax breaks for the top earners would shrink from $700,000 to $300,000, with the top 10% of lifetime earners footing 60% of the total tax raised. By contrast, a typical median earner has historically benefited by just $5,700 over their working life.

The sweeping changes—which include higher taxes on capital gains and trusts, alongside curbs to negative gearing—aim to fund an ageing population, expanding care services, and rising defence spending amidst geopolitical volatility.

Wilkinson noted that structural spending restraint, such as capping the growth of the $50 billion National Disability Insurance Scheme, is also essential.

To address concerns about housing and fairness, the policy pairs these tax increases with a $250 tax offset for working Australians.

90% of people under the age of 30 are projected to be financially better off, improving intergenerational equity and easing the path to first-home ownership.

Wilkinson also rejected business criticisms that reducing the 50% capital gains discount would deter risk-taking, arguing that the changes more accurately adjust for inflation and will ultimately improve capital allocation efficiency across the economy.