Two economists outline a proposal to tax the family home ahead of the economic roundtable on Tuesday

Sky News AU

9 hours ago

Two economists have proposed a radical plan to remove a tax exemption on the family home ahead of the Albanese government's economic reform roundtable in Canberra which starts on Tuesday.
Peter Siminski from University Technology Sydney and Roger Wilkins from the University of Melbourne made the argument in The Conversation last Wednesday, arguing the family home should not be exempted from capital gains tax or the capital gains tax discount.
The CGT discount, which was introduced by the Howard Coalition government in 1999, discounts assets that have been held in the family for more than 12 months.
The tax exemption is estimated to cost Treasury around $50 billion, with the capital gains discount costing around $19 billion.
In total, this leads to a $69 billion shortfall.
Writing in The Conversation, Mr Siminski and Mr Wilkins have said they want these tax exemptions to be removed, an idea not supported by Labor or the Coalition.
'When these are included in the income measure, inequality is higher, and it increases more strongly over time,' the authors said.
They also suggested that inequality in society was increasing as more people choose not to put their homes on the market and instead opt to tie up equity in the family home.
'Unsurprisingly, outright homeowners are much better off than renters when income from the home is counted,' they wrote.
'They have an average income 86 per cent higher than the average income of renters — compared with 34 per cent higher if housing income is ignored, as it usually is.'
They also suggested that negative gearing should be scrapped - something that both the government and the Coalition have ruled out supporting.
Both the government and the Coalition have said that housing construction numbers need to increase, and the Treasurer has said building new houses will be a key point of the roundtable discussions.
The government has already ruled out increasing GST and raising new taxes, despite many economists saying the government will need to do so.
Speaking to Sky News Political Editor Andrew Clennell, Dr Chalmers said the focus of the summit would be on increasing productivity.
'It's called an Economic Reform Roundtable, but productivity is the main game, the major focus of the roundtable this week,' Dr Chalmers said.
Dr Chalmers said housing was another key focus of the Roundtable.
'I don't think it's a secret, Andrew, the government is desperate to build more homes,' he said.
'We do want to reform the environmental approvals process. My colleague Murray Watt and the whole cabinet are working on several elements of building more homes, getting the approvals moving more quickly.'
The comments come as several states announced that they would miss their targets agreed in the National Housing Accord back in 2022.
New South Wales is on track to be short of 120,000 homes, something that Premier Chris Minns has repeatedly blamed on councils expressing NIMBYism, particularly with the City of Sydney and Mosman Council on the city's north shore.