Jim Chalmers

Yeah.

And so the focus in negative gearing is on

property, the focus in capital gains is across the system.

And again, that's deliberate.

We're trying to deal with the main challenges here around the fact that labour income and other income is out of whack, the housing challenges that I mentioned and the innovation challenge I mentioned.

Well, there's $3.5 billion worth of tax cuts, which are all about investment and innovation.

So if you look at the tax package, it's broadly neutral over the four years of the budget.

And that's because what it raises, it provides back in terms of a working Australian tax offset, which has effectively increased the tax-free threshold for people who work for a living.

And it's got $3.5 billion worth of tax cuts for venture capital, for startups, for the more innovative and more dynamic parts of our economy because we want to encourage more of that.

So across the board, it's very pro-investment and innovation because we want to get that dynamism and productivity in our economy.

Yeah.

So we're talking about a capital gains discount.

It used to be that when you sold something and you made money on it, you pay tax on half of it.

Now you'll pay tax on the real gain, so the bit that isn't inflation.

And so a different calculation, but still taxed at marginal rates, all of those sorts of features of the tax system, just calculating the discount differently.

And the really important thing to understand there is if you think about a couple of decades in between the Howard change in 99 and now, the average over a couple of decades, what it showed was, if you calculated the discount by indexation rather than the 50% flat,

then what you see over that period is people who invested in existing homes got quite substantially overcompensated for their investments.

Why?

People piled in, prices come up, people crowded out of the market.

But units were not overcompensated and shares were not overcompensated on average over that 20 year period.