Is the government preparing to axe negative gearing | Today Show Australia

Added: 2026-05-06

[00:00:00]Inflation just surged to its highest level since September 2023 and already Jim Chalmers is warning the worst is yet to come.

[00:00:08]To discuss the treasurer joins me from Logan.

[00:00:11]Treasurer, good morning. Look, I reckon you've lost the room in your ability to control inflation and it's a big room.

[00:00:21]Morning Carl, look certainly the numbers that we saw yesterday were a pretty uh significant uh sense of the costs and consequences of this war in the Middle East. You know, those inflation numbers which were uh too high yesterday really do reflect the hefty price that Australians are paying at the Bowser and beyond that as well uh for this uh war in the Middle East.

[00:00:43]And so my responsibility in the budget and more broadly uh is, you know, we cut the fuel excise, we're rolling out cost of living relief. The budget will be really responsible in 2 Tuesdays time and that's the best thing that we can do in the context of these uh prices which are too high and being pushed higher uh by a war on the other side of the world.

[00:01:02]>> But if you couldn't control inflation before the war, how are you going to control it during and after? How do we have any faith?

[00:01:12]Well, there's a couple of things going on. We had inflationary pressures before the war in the Middle East, but I think any objective observer of particularly the month of March and that data yesterday understands that overwhelmingly this was a story about fuel prices and fuel prices are all about uh what's happening in the war in the Middle East. I think people understand that. Uh there are broader cost pressures in our economy. They have been the focus uh of the government for some time. It's why we've got this cost of living help. It's why we cut the fuel excise. It's why we've been managing the budget in a responsible way, but some of these developments uh are not decided by Australians. You know, Australians are paying a price for something that they haven't decided. Uh they we are hostage in lots of ways when it comes to petrol prices to what's happening on the other side of the world. The barrel price for oil was up near 120 bucks today.

[00:02:02]So that's flowing through to prices uh at the Bowser. We expect to see a bit more of that and for those price pressures to be a bit broader in the economy as well. But I think your viewers understand Carl that this is overwhelmingly about a war on the other side of the world.

[00:02:16]>> But we did have dramas before um and on the streets and supermarkets, on farms and small businesses.

[00:02:22]This is going to mean a good old-fashioned walloping to their wallets.

[00:02:28]Yeah, certainly Australians are under pressure. Um we've acknowledged before that uh some of these inflationary pressures uh were hanging around before the war in the Middle East, but overwhelmingly what we saw in those numbers yesterday in the month of March was about fuel prices.

[00:02:42]Fuel prices are about the international barrel price. Unfortunately, that is being pushed up very substantially uh by a war in the Middle East. So from an economic point of view and from an Australian family's point of view facing these cost of living pressures, the end of this war in the Middle East can't come soon enough.

[00:02:59]Uh economists reckon changes to negative gearing and the capital gains tax won't fix housing supply and affordability or help with productivity.

[00:03:08]But gee, I'm glad we've got that good old-fashioned social cohesion.

[00:03:14]Well, a couple of things about that. I mean those uh deliberations uh are ongoing. You know, we haven't finalized the budget yet. There's always a bit of speculation about what policies will be in the budget. I think particularly this year there's been a lot of that speculation and that's fine.

[00:03:29]Uh we haven't finished the budget yet.

[00:03:31]Uh but when it comes to housing policy uh we're already doing a lot of things at once. I mean the main game is supply.

[00:03:37]We've got big investments in supply. Uh we're actually tens of thousands uh revised up in terms of house building.

[00:03:44]That will take a bit of a hit because of these uh building costs that we're seeing flow through our economy. The housing minister will say a bit more about that later on. But one of the big concerns >> going to get there anyway, though.

[00:03:54]>> that I think Australians have Well, it's an ambitious target, but I think doable if everyone does their bit.

[00:04:00]We had we'd seen a revision upwards in how many homes we were building. Now that's going to take a bit of a hit because of construction costs. I think people understand where those cost pressures are coming from. But I I guess the the other concern that people have as I move around communities like this one here at home is this idea that it's getting harder and harder for young people to get a toehold in the market uh in the housing market. If you look at the numbers for uh younger people and you look at the numbers for owner-occupiers as a proportion of the housing market, there is a lot of concern and I share it.

[00:04:31]Uh that it's too hard for younger people to compete with uh investors and others in the housing market. And so as we work through the the final deliberations for this budget, that will be one of the considerations that we take into account as well in addition to housing supply. But how how are changes uh to negative gearing and capital gains tax going to help young people get into a house?

[00:04:54]We've got to look right across the board at everything we're doing in housing and also the tax cuts that we're already doing. The standard deduction for tax is all about providing some relief. It has particular benefits for younger people who are typically on uh lower and and middle incomes. But you've got to look right across the board. And if we did go down that path and again uh haven't finished the budget yet, but if we did go down that path, I'd encourage people to look right across the board at everything that we're doing in housing, not one or two policies in isolation. Treasurer, good to talk to you. Thanks for your time. Appreciate it.

[00:05:24]Appreciate it, Carl. Thanks.