Labor may be changing its mind on capital gains tax as budget release draws closer

All right, let's bring in our Sky News political editor, Andrew Clonnell.Andrew, CGT, the changes there that are on the table, clearly the government's no longer trying to dance around them.We know they're on the way.Changes to negative gearing as well.It wasn't that long ago, the 2019 election.This was basically a package of reforms or so -called reforms put on the table by Bill Shorten.

Australians had a look at it.They voted against it.Scott Morrison had his miracle win.And here we are now about to bring them in next Tuesday, despite back in May at the last election, Albanese saying, no, none of this would happen now.When John Howard changed his mind famously on the issue of a GST, he took the GST to an election in 98.He did.

Surely if Labor's changing their mind here, this has all got to go to an election.

Well, you think so.It's only been a year since the last one.They could do that, of course.They did that with the super tax proposal.They could say this comes into effect in the middle of 2028.They could announce that budget night, but I'm not sure they will.

It's courageous.I mean, it might be the most courageous budget since the 2014 budget.We know how that ended up, Peter Credlin.So that was like a Medicare charge and all the rest a co -payment.Of course, people ended up paying for half their doctor bills anyway.But it's that sort of thing, isn't it?

But what you would have to say particularly the way these guys operate, Albanese and National Secretary Paul Ericsson and the rest, they would have focus group the life out of this.So they'd be confident with the biggest group of voters being millennials going forward, they can get away with this.What's happened today, though, is interesting with the Australian getting this leak.And I think it sounds right.I mean, I first got onto this Sunday Agenda.I was interviewing Daniel Molina and I went, well, hang on, is there a tax cut here?

How can you put in all these taxes and not have something for people?And he wouldn't answer it.And then Cam Redden asked Jim Chalmers the same thing and he wouldn't answer it.The Australian Matthew Craig.got on that it's a $200 or $300 tax offset.I see in Trudy's report there it's $26, $27.

So that means you don't get it presumably until July 2027 by the way.It's not like you get it you know in six weeks but then they can say well then it doesn't contribute to inflation.But $200 doesn't even touch the sides these days does it?What can you get for $200 these days?So I think it's very interesting and I know the headlines will pan the budget, you just know that because they have to.Any newspaper editor worth their salt will go, well this is crazy, you know, you could have taken this to the last election and if you had you might have lost 10 less seats but you probably still would have won.

It's cheeky to do this now but it really is whether they can get away with it and when I say get away with it, get away with it again.I mean stage three tax cuts they did exactly the same thing.But because that hit the higher income earners, politically, they got away with it.So that's a test.But this leak to the Oz would have spoilt the story a bit, Peter.They would have been hoping budget night to pull out this big surprise payment.

And that's been revealed.

Well, it's not a big surprise.I mean, two to three hundred dollars, let's call it five hundred because they'll have Let the leak go out at a lower number.They'll announce a higher number on Tuesday.Let's say it's $500.If your mortgage has gone up, and on average you're paying $18 ,000 more, if you are someone, and we know it's usually modest incomes that have got a rental property, and you're going to lose that $3 ,000 or $4 ,000 a year in your negative gearing tax break, if you're paying higher money for your pharmaceuticals or whatever it is in life, your power bill, let's say, getting $300 from Jim Chalmers nowhere near what he is costing you by spending so much that, as the Reserve Bank Governor says today, he is driving inflation.And of course this $300 will go to Gina Reinhardt, it will go to people like you.

it'll go to Andrew Clunell, it'll go to absolutely everybody across the country.This is not targeted money.This is a waste of money when we're already under inflationary pressure.

Negative gearing, the proposal I'm pretty firm is grandfathered.So there'll be a date by which you've got to buy a property and start negative gearing or you don't get it, probably July 1, I guess, I don't know, unless they do do it in 2028, but it'll be grandfathered.But otherwise, I mean, like very good point.I mean, you would typically expect to get at least three and possibly five grand in tax back from a negatively geared property.The average one, I reckon.Certainly, I mean, I'm talking Sydney, somewhere like that.

Right.So Sydney, Melbourne.So yeah, does 200 bucks make up for five grand?Not really.But the thing is what they're doing, and this is a problem for them because they don't get enough revenue out of it.So it's almost like an exercise in politics, really, to say to young people, we care about you.

Doesn't get you any extra supply.Everyone already on the system, still on the same tax break.It's people going forward.But yeah, I mean, potentially for people going forward.Yeah, go on.

Just on the young person, though, if the landlord loses a negative gearing break and if interest rates are going up, The landlord's going to jack up the weekly rent.So the young person who's trying to save is paying more on rent, so less ability to save and get into their own home.I can't see how it helps them.And we know when Keating tried this, it reduced the available stock of rental properties.Again, we've got an issue with supply here at the moment in Australia.They're not they're not bringing down the migration numbers.

And it's certainly a hell of a lot more than we're coming into the Keating era.I just can't see the economic sense in any of this.

Well, yeah, I don't think it's about economics.I think it's about politics, to be blunt.

I don't think $200 buys people off.I just don't think it does.

Well, Angus Taylor was on with me this afternoon on politics now, and it was interesting, because I said, well, hang on, if I'm not going out to invest with a negative gearing break, isn't that giving a first homeowner a place, right?And Angus's response was quick, and it wasn't bad.It was like, yeah, but that kicks a renter out.So he goes, yeah.So that's not a bad line, because he's saying, well, get on to supply.And the other thing, I mean, the housing market right now is frankly depressed.

That's not the time to bring in a property tax in my experience.I saw it here in New South Wales with the Vendor Tax about 2003 -4, around then.So it's not the right time.There might be a time to bring this in.I'm not sure it's the right time.But yeah, it's going to be really interesting to see how this plays out.

Another one quickly before I go.Pauline Hanson, well we got it last night from James Ashby here that she had an open mind, he said, for running in a lower house seat.I know people have talked about Oxley, but I'm thinking about Wright.The seat of Wright, Scotty Buchholz, he's LNP, he holds that seat.He's been there for some time, I suspect.He would be the most nervous.

Do you think she'll do it?

Well, Oxley's Milton Dick, the Speaker, correct me if I'm wrong.I think I'm right, so it's a Labor seat.I think you might have more chance in a coalition seat, so I think you're probably right, but she'd have a decent chance in any seat at the moment.What I found interesting about that was Barnaby Joyce came on Sunday Agenda and I said, look, if you win in Farrer, would that make you more inclined to stay lower house run New England again?He said, yeah, because there'd be a whole bunch of MPs who I would then be mentoring or leading downstairs.Now, not a day after that or a day after that.

James Ashby comes on with you and says, oh, Pauline might run downstairs.And I find that very interesting.I don't think that Pauline would have liked the Barnaby statement, he was going to be the leader downstairs.I don't think that would have been to her liking.So she's jumped in and said she might do it now.But look, it makes sense.

And particularly at her age, Pauline, just to go victory or defeat.at this point.And the way the polls are, most likely victory.

I will watch this one with interest.As I said, I think Scotty Buchholz will be the most nervous member in the House of Reps at the moment.Thank you, Andrew.