Limiting capital gains tax changes to new investments would ‘severely delay’ budget reforms, Deloitte says

Deloitte warns that limiting proposed capital gains tax (CGT) and negative gearing changes to new investments (“grandfathering”) would generate only about $500m over the first four years, severely delaying budget repair and broader tax reform. Phasing changes across existing investors over three years would instead boost revenues by around $18.8bn in the first four years — funds that could be used for income-tax cuts (for example, a 1 percentage-point cut to the lowest marginal rate would give an extra ~$500 to a worker on $45,000). Treasurer Jim Chalmers cautioned transitional arrangements are likely to be needed and that near-term revenue gains would be limited. Deloitte also notes smaller-than-expected deficits as higher commodity prices and inflation lift company profits, but says net savings depend on government reprioritisation. The analysis implies potential positive fiscal and economic effects for Australian markets (Australia 200) if broader reforms are enacted, but political and transitional constraints could mute near-term market impact.