The internet is melting down over the leaked budget proposals around negative gearing and Capital Gains Tax.
And honestly? We understand why. Because before the election, Australians were told these changes were off the table
Now suddenly, after the votes are counted, we are potentially looking at one of the biggest rewrites to investment and property taxation in decades.
But rather than screaming into the void like every other individual online, maybe it is time to ask a different question.
What now?
Because whether you agree with these changes or not, one thing is becoming painfully obvious, the Australian Government has:
- A spending problem
- A leadership problem
- And a long term thinking problem.
We keep electing politicians/governments focused on election cycles, headlines and political survival instead of productivity, supply, infrastructure and the future prosperity of Australians.
Instead of fixing the real issue, housing supply, housing demand, planning bottlenecks, construction costs and skilled labour shortages, the focus shifts to taxing behaviour.
The government appears to believe the housing crisis is primarily caused by tax incentives.
The bigger issue though?
These proposed changes do not just impact wealthy property investors (no, our politicians wouldn’t lie to us again? would they?). They potentially change the way Australians think about:
- investing
- risk taking
- business ownership
- retirement planning
- succession planning
- cashflow management
- exit strategies
Because this is not just about property anymore. If the 50% CGT discount disappears broadly across asset classes, it changes the risk versus reward equation.
- Work 80 hour weeks.
- Take personal risk.
- Miss time with your kids.
- Put the family home on the line.
- Build something valuable over decades.
Then potentially hand a much larger slice back at the end. That is why people are frustrated.
And despite the headlines, nobody genuinely believes these changes alone suddenly make housing affordable for younger Australians.
Supply + demand matters
So before everybody loses their minds tomorrow night, take a breath and think strategically. Because complaining about Canberra will not change your financial future (and they don’t listen or care anyway).
But adapting to policy change might.
The real questions now become….
How do these changes affect;
- Your financial plan?
- Your borrowing capacity?
- Your cashflow?
- Your next investment?
- Your next investment ownership?
- Your exit strategy?
- Your retirement strategy?
- Your SMSF structure?
- Your estate plan?
That is where the conversation should be.
Not panic. Not politics. But a strategy.
Because governments change rules. They always will to suit their own self interest and agendas. The people who survive and thrive financially are the ones who adapt faster than everybody else.
Matthew McCabe
Newcastle Financial Planner