James Thomson

Does it do all that?

I guess that remains to be seen.

Are there wrinkles with it?

Yes.

I think the application of the CGT changes and the negative gearing changes to property is good.

Perhaps the application of those changes to invest other asset classes like equities and certainly early stage capital is a worry.

And there's this general question of how much intergenerational fairness is created when you grandfather all these rules.

Because in one way, as several critics have pointed out in the last couple of weeks, and particularly in response to the budget, you could see this as an older generation pulling the ladder up behind them.

They've grandfathered and locked in all the very advantageous tax treatment of their investments, and now younger investors going forward won't be able to access that same very advantageous tax treatment.

So...

I think there's a few wrinkles, but Alan, it's remarkable the number of people who said to me in the budget lockup, I wonder what Alan Cole will think of the changes around housing.

Because there is a sense here that housing as an investment, the government is saying we don't want housing to be as profitable as an investment as it has been.

And you dig into the budget papers, the government's also bravely saying, we're happy to see house prices go backwards, which is something I don't think we've seen a government say in a very long time.

Does the change in psychology, is it going to make a meaningful difference, do you think?

That's the hard bit, isn't it?

Yeah, that's a good way of thinking about it and it's probably only –

Using that lens, it's probably only in 10 years that we'll see how some of these changes around CGT, negative gearing, and particularly the taxation of trusts, how big their impact is.

Those will take a while to ramp up.

Right.

Which says the budget is gently stimulatory, which is probably something that Michelle Bullock at the Reserve Bank isn't thrilled about, but I guess she might say it could have been worse too.