<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The </span><a href="https://www.9news.com.au/government" rel="" target="" title="federal government"><span>federal government</span></a><span> has dropped its two clearest hints to date that it is preparing to wind back the capital gains </span><a href="https://www.9news.com.au/tax" rel="" target="" title="tax"><span>tax</span></a><span> (CGT) discount for property investors in the </span><a href="https://www.9news.com.au/federal-budget" rel="" target="" title="upcoming budget"><span>upcoming budget</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Yesterday, two </span><a href="https://www.9news.com.au/labor-party" rel="" target="" title="Labor"><span>Labor</span></a><span> senators endorsed a parliamentary inquiry's report into the controversial tax break, which found the discount's design is flawed, distorts investment, benefits investors over first-home buyers, and can drive intergenerational inequality.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>And this morning, </span><a href="https://www.9news.com.au/jim-chalmers" rel="" target="" title="Treasurer Jim Chalmers"><span>Treasurer Jim Chalmers</span></a><span> left the door well and truly ajar when asked whether the May 12 federal budget would include changes to the CGT discount.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>FINANCE:</span></strong><span> </span><a href="https://www.9news.com.au/national/rba-interest-rates-the-danger-on-the-flipside-of-the-rbas-rate-hike/0f884e4a-cc94-45b9-8ff4-98567d0cd712"><strong><span>'Global recession risk': The danger on the flipside of the RBA's rate hike</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"We have made it clear that we are considering our options on tax," he told ABC radio.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"We have indicated publicly for some time now, really since the reform roundtable in (August) last year, that we have an open mind to tax reform if we can afford it… I've tried to be up front in saying that we are working up some options," he added. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"I'm not going to come out with what those options look like, but there's certainly some and there's certainly appetite for more tax reform if we can land it."</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/federal-budget-2026-government-hint-changes-capital-gains-tax/938c783c-4361-4c06-bde7-bc3168cd2016" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Introduced by the Howard government under then-treasurer Peter Costello in 1999, the </span><a href="https://www.9news.com.au/finance/what-is-negative-gearing-capital-gains-tax-investment-property-tax-concessions-australia-explained/79a83105-f4c6-4121-a693-6df0692adba8" rel="" target="" title="CGT discount and negative gearing provisions"><span>CGT discount and negative gearing provisions</span></a><span> have been blamed by critics for house prices surging out of reach for many working-class Australians.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>At the same time, it has become an increasing drain on a federal budget that has since fallen into structural deficit.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>BUSINESS:</span></strong><span> </span><a href="https://www.9news.com.au/national/business-news-bhp-australian-mining-giant-names-new-ceo-as-mike-henry-departs/73293930-01f1-4a2d-883d-79cd4bf21f57"><strong><span>Australia's most valuable company names new CEO</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Revenue foregone as a result of the capital gains discount has risen from $860 million in 2000–01 to $22 billion in 2025–26," independent economist Saul Eslake told the committee.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Or, if you like, from 1.1 per cent of total personal income tax collections to 6.1 per cent of total personal income tax collections over that 25-year interval."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Yesterday's Senate inquiry report made four findings which were endorsed by Labor MPs Richard Dowling and Ellie Whiteaker, although its recommendations differed from party-to-party.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Greens senator Nick McKim, who chaired the committee, made eight recommendations, including reining in the CGT discount and completely abolishing it for property investors.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The combination of negative gearing and the capital gains tax discount has driven rampant property speculation and inflated house prices over the last 26 years," he wrote. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>COST-OF-LIVING PAIN:</span></strong><span> </span><a href="https://www.9news.com.au/national/australian-families-cost-of-living-fuel-and-interest-rate-hikes-hit-mortgage-holders/9dfdd7b0-be22-4af1-b04f-d50702c5b947"><strong><span>Average Aussie household almost $75 a week worse off than six weeks ago</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This interaction has been cataclysmic for housing affordability."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>He also said "grandfathering" – an exemption to changes for Australians who have already invested based on the current tax settings – should not be included in any reform.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Former Treasury Secretary Ken Henry, who authored a comprehensive but to-date unused blueprint to reform the tax system in the early 2010s, also argued against grandfathering to the committee.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Grandfathering changes would exacerbate poor intergenerational outcomes," McKim said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"To ensure a significant release of housing is made available for renters to buy, hard limits and a phase-out of existing arrangements must be part of any negative gearing and capital gains tax reforms."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>RADIO DRAMA:</span></strong><span> </span><a href="https://www.9news.com.au/national/kyle-sandilands-jackie-o-kiis-fm-radio-show-contract-terminated-by-arn/11c5a875-b61b-4577-9d7d-3550169c564e"><strong><span>'I don't accept it': Kyle Sandilands reveals contract terminated by ARN</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Labor's senators, though, didn't propose any specific reform, instead recommending tax changes be considered as one element of an overall policy approach to the housing crisis.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Dowling and Whiteaker also said tax reform should deliver a "fair go" for working and young people, address intergenerational inequality, incentivise business investment, and make the overall system "simpler and more sustainable".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The two Liberal senators on the committee, though, argued vehemently against changes to the CGT, saying a lack of supply was the driver of the housing crisis and labelling McKim's report "simplistic and one-dimensional".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Supply of housing has collapsed in Australia as the population has surged," senators Andrew Bragg and Dave Sharma wrote. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Supply is at the heart of the housing crisis, as repeatedly stated by representatives from the housing sector during the hearings."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>FROM THE ARCHIVES:</span></strong><span> </span><a href="https://www.9news.com.au/finance/what-is-negative-gearing-capital-gains-tax-investment-property-tax-concessions-australia-explained/79a83105-f4c6-4121-a693-6df0692adba8" rel="" target="" title=""><strong><span>What is negative gearing and why are calls to change it so controversial?</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Rumours of the </span><a href="https://www.9news.com.au/national/capital-gains-tax-discount-australia-speculation-overhaul-federal-budget-2026/1fcd9f5b-370a-4045-a4c3-c00c4dbec466"><span>government making changes to Australia's generous tax incentives for property investors in the May budget</span></a><span> have been growing since the start of the year.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Senior ministers, including Chalmers and Prime Minister Anthony Albanese, have repeatedly turned down the chance to rule out changes following reports of Treasury modelling CGT discount reductions and </span><a href="https://www.9news.com.au/national/negative-gearing-treasury-modelling-jim-chalmers-federal-budget/38dc9045-0406-4198-b3db-7b5a67706ebb"><span>limiting negative gearing to two properties</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>This morning, Chalmers insisted no decision has been made.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The big focus on tax policy is rolling out income tax cuts," he said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"We haven't changed our policy beyond that, we haven't taken any decisions…</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"At the end of the day, they will be decisions for the cabinet. I don't want to pre-empt those decisions or those discussions and deliberations."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The treasurer is due to give a major budget preview speech in Melbourne tomorrow.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><em><span>NEVER MISS A STORY:</span></em></strong><span> </span><strong><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><strong><em><span>Download the 9NEWS App here via</span></em></strong><span> </span><a href="https://apps.apple.com/au/app/9news/id1010533727" target="_blank"><strong><em><span>Apple</span></em></strong></a><span> </span><strong><em><span>and</span></em></strong><span> </span><a href="https://play.google.com/store/apps/details?id=nineNewsAlerts.nine.com&amp;hl=en_AU&amp;pli=1" target="_blank"><strong><em><span>Google Play</span></em></strong></a></li><li><strong><em><span>Make 9News your preferred source on Google by</span></em></strong><span> </span><a href="https://9.nine.com.au/8x987w" target="_blank"><strong><em><span>ticking this box here</span></em></strong></a></li><li><strong><em><span>Sign up to</span></em></strong><span> </span><a href="https://login.nine.com.au/edm?client_id=nineatnine" target="_blank"><strong><em><span>our breaking newsletter here</span></em></strong></a></li></ul></div></div>