Sacha Barbour Gatt

a listener production.

Hi, it's Sasha Barbagat.

Welcome to The Briefing.

A major overhaul to Australia's tax system to try to shift the country's wealth from boomers and investors to millennials, Gen Z and the next generations has formed the centrepiece of Labor's fifth budget.

Last night, Treasurer Jim Chalmers confirmed the government is breaking its election promise, although you won't hear him use those words exactly, to scrap existing tax breaks for property investors.

There's also going to be an extra tax cut for workers, more money for defence and a plan to bolster national fuel security.

Now, the Iran war is also proving a key factor in a lot of the predicted outcomes.

While there are key revenue opportunities in skyrocketing commodity prices and inflation, there's also the risk of a doubling of oil prices, which would drive inflation above 7%, unemployment over 5%, and send the economy backwards.

Let's get into it.

It is the Briefings Budget Breakdown on Wednesday the 13th of May.

Yeah.

Okay.

So as to the changes to the capital gains tax, this is the other part of that centrepiece tax reform policy.

Capital gains taxes currently see people only pay tax on half of their capital gains from investment assets.

So that is going to now shift to the previous pre-Howard era model, which will tax real inflation adjusted boost to asset prices when investors sell and at a

The CGT changes won't exactly be grandfathered, like we're seeing those to negative gearing, but from July 1 next year, gains made on assets will be taxed under the new rules, but those made up until that date will not be.

Yeah, that's right.

And just quickly, these major tax reforms will also include changes to trusts.

So a new tax of 30% will be introduced on discretionary trusts, which are mostly used by pretty wealthy Australians.

And that change is coming into effect from July 2028.