The ACTU has renewed calls for capital gains tax reform, arguing the current system is deepening housing inequality.
Australian Council of Trade Unions secretary Sally McManus said the government understood the “deep unfairness” driving Australia’s housing divide.
Speaking to ABC News Breakfast, McManus said capital gains tax discounts overwhelmingly benefit the wealthiest Australians.
She said when capital gains tax was introduced 26 years ago, average wages were about six times the cost of a home, compared with around 11 times today.
McManus said roughly 1% of Australians benefit most from the current settings, while younger and lower-income Australians are locked out of housing.
She said support for reform was growing across the community, including from independent MP Allegra Spender.
McManus said the ACTU would continue pushing the government to act, arguing reform was necessary to restore fairness in the housing market.
What is the capital gains tax discount?
The capital gains tax discount reduces the tax paid on profits from selling assets such as property and shares.
Capital gains tax, or CGT, is the tax paid on the profit made when an asset increases in value and is sold.
In Australia, CGT applies to assets such as investment properties and shares.
The tax was introduced by the Labor government in 1985.
In 1999, the Howard government introduced a 50% discount on capital gains for individuals who hold an asset for more than 12 months.
The change significantly boosted investment in existing housing rather than new construction.
Critics argue the discount has contributed to higher house prices and housing inequality, while supporters say it encourages investment.
