1 00:00:06,693 --> 00:00:09,493 Speaker 1: You're listening to the same in Barnett and James Daniels 2 00:00:09,493 --> 00:00:11,853 Speaker 1: Afternoons podcast from News Talk. 3 00:00:11,733 --> 00:00:16,293 Speaker 2: Zedb Infometric's chief executive and principal economist as Brad Olson, 4 00:00:16,413 --> 00:00:18,213 Speaker 2: joins us now to discuss the CGT. 5 00:00:18,333 --> 00:00:20,373 Speaker 1: Hello Brad, good afternoon. 6 00:00:20,493 --> 00:00:22,173 Speaker 2: Nice to chat with you again, mate. 7 00:00:22,493 --> 00:00:24,133 Speaker 3: Same to you guys. Nice to come back on. 8 00:00:24,333 --> 00:00:27,253 Speaker 4: Yeah, so we've got you here because we're wondering about 9 00:00:27,253 --> 00:00:30,133 Speaker 4: the capital gains tax or the talk of a capital 10 00:00:30,173 --> 00:00:32,733 Speaker 4: gains tax. Before we get there, can you tell me 11 00:00:33,133 --> 00:00:37,333 Speaker 4: why things are so different from nineteen Admittedly, nineteen seventy four, 12 00:00:37,413 --> 00:00:39,933 Speaker 4: I bought my first home. It was a brand new 13 00:00:39,973 --> 00:00:43,413 Speaker 4: home at the age of nineteen. No nineteen year old 14 00:00:43,453 --> 00:00:44,973 Speaker 4: is going to be able to buy a brand new home. 15 00:00:45,053 --> 00:00:47,293 Speaker 4: I was working for a government department at the time. 16 00:00:47,613 --> 00:00:50,413 Speaker 4: Why have things changed, Well, I. 17 00:00:50,453 --> 00:00:52,893 Speaker 3: Think because over that period of time we've seen that 18 00:00:52,973 --> 00:00:56,853 Speaker 3: people's incomes just haven't nearly kept pace with the increases 19 00:00:56,893 --> 00:00:59,093 Speaker 3: in house price value. So all of a sudden you're 20 00:00:59,133 --> 00:01:01,773 Speaker 3: having to take out a much much bigger mortgage and 21 00:01:01,853 --> 00:01:05,053 Speaker 3: having to pay a much larger portion of your household 22 00:01:05,133 --> 00:01:07,933 Speaker 3: income to service at mortgage. So but where did that 23 00:01:07,973 --> 00:01:11,293 Speaker 3: come from? Well, effectively because we didn't build as many 24 00:01:11,333 --> 00:01:14,213 Speaker 3: homes relative to probably what we needed. And so you're seeing, 25 00:01:14,253 --> 00:01:16,573 Speaker 3: you know, more people that are sticking around home longer, 26 00:01:17,053 --> 00:01:19,413 Speaker 3: are staying with their parents and similar because of how 27 00:01:19,453 --> 00:01:22,533 Speaker 3: expensive things have got. So, I mean it's interesting you 28 00:01:22,573 --> 00:01:24,213 Speaker 3: raise that because the number of people that sort of 29 00:01:24,333 --> 00:01:26,133 Speaker 3: else didn't come up and ask economy assim was a 30 00:01:26,173 --> 00:01:28,013 Speaker 3: good time buy house and normally it was sort of 31 00:01:28,053 --> 00:01:30,893 Speaker 3: in the fifty sixty seventies. Anything asked to sort of 32 00:01:30,893 --> 00:01:33,733 Speaker 3: the late eighties and things started to get definitely a 33 00:01:33,773 --> 00:01:35,573 Speaker 3: lot more difficult for households. 34 00:01:35,693 --> 00:01:39,853 Speaker 2: Right, So, Brad, capital gains tax, clearly, if labor are elected, 35 00:01:39,853 --> 00:01:41,933 Speaker 2: they will look at it in some form or another. 36 00:01:42,733 --> 00:01:45,253 Speaker 2: Does it bring in much money? From your experience what 37 00:01:45,413 --> 00:01:47,613 Speaker 2: a capital gains tax? If it isn't on the primary 38 00:01:47,613 --> 00:01:49,613 Speaker 2: home and only on a secondary home or multiple homes, 39 00:01:49,933 --> 00:01:52,253 Speaker 2: would it actually make any material difference? 40 00:01:53,453 --> 00:01:55,733 Speaker 3: Well, it's interesting because I think the questionaire is what 41 00:01:55,773 --> 00:01:58,013 Speaker 3: are you trying to design the tax for? Are you 42 00:01:58,053 --> 00:02:00,173 Speaker 3: trying to design it to make a bunch of cash? 43 00:02:00,213 --> 00:02:03,333 Speaker 3: And that sounds like that's what taxes should be poor, 44 00:02:03,613 --> 00:02:05,293 Speaker 3: But there is also that part of it where you 45 00:02:05,333 --> 00:02:07,373 Speaker 3: want to also on sure that you've got sort of 46 00:02:07,813 --> 00:02:11,533 Speaker 3: broadly speaking, as much income as possible that is being 47 00:02:11,613 --> 00:02:14,293 Speaker 3: taxed as possible, only so that you don't have people 48 00:02:14,333 --> 00:02:17,413 Speaker 3: that part their money in certain specific areas because it's 49 00:02:17,493 --> 00:02:20,373 Speaker 3: under tax relative to something else. So the idea there 50 00:02:20,453 --> 00:02:22,213 Speaker 3: is that if there's going to be money being made 51 00:02:22,293 --> 00:02:24,533 Speaker 3: from anything, that would be a good idea that it's 52 00:02:24,573 --> 00:02:27,933 Speaker 3: sort of tax similarly, which is where often this capital 53 00:02:27,973 --> 00:02:30,613 Speaker 3: gains tax idea comes from. Now, look from a pure 54 00:02:30,653 --> 00:02:33,613 Speaker 3: economiss point of view, that better idea would be to 55 00:02:33,693 --> 00:02:37,093 Speaker 3: implement something like a capital gains tax on all forms 56 00:02:37,093 --> 00:02:41,413 Speaker 3: of residential investment, including on the family home. Of course, 57 00:02:41,453 --> 00:02:43,613 Speaker 3: politics is not keen on that. And the reason you 58 00:02:43,653 --> 00:02:45,933 Speaker 3: do that is just it's clean, because otherwise you have 59 00:02:46,053 --> 00:02:48,933 Speaker 3: everyone that apparently lives in a different main home every 60 00:02:48,973 --> 00:02:50,773 Speaker 3: day of the week so they can claim a few 61 00:02:51,173 --> 00:02:53,413 Speaker 3: But I think as well, and the challenge I think 62 00:02:53,453 --> 00:02:55,893 Speaker 3: that the Labor Party has with its tax policy and 63 00:02:55,933 --> 00:02:59,253 Speaker 3: conversations going forward is that it has not only flip 64 00:02:59,253 --> 00:03:01,053 Speaker 3: flopped a lot, but it's also been a little bit 65 00:03:01,093 --> 00:03:04,293 Speaker 3: secretive in previous times. Now you'll remember that in Budget 66 00:03:04,293 --> 00:03:08,093 Speaker 3: twenty twenty three are undernign to anyone. The government was 67 00:03:08,133 --> 00:03:11,013 Speaker 3: sort of a hairsbreadth away from implementing a wealth tax, 68 00:03:11,653 --> 00:03:13,533 Speaker 3: and so again there's sort of a lot of I guess, 69 00:03:13,653 --> 00:03:17,053 Speaker 3: questions and confusion around what is the Labor Party's expectation 70 00:03:17,613 --> 00:03:20,933 Speaker 3: around their tax policy going into the future. But it's encouraging. 71 00:03:21,013 --> 00:03:23,293 Speaker 3: I think that they're talking about it because they do 72 00:03:23,373 --> 00:03:25,173 Speaker 3: need to go out to the electorate. They do need 73 00:03:25,213 --> 00:03:27,173 Speaker 3: to go up to the people ahead of an election 74 00:03:27,293 --> 00:03:29,413 Speaker 3: campaign and say this is what we're proposing to do 75 00:03:29,493 --> 00:03:31,773 Speaker 3: and this is what we think is necessary. 76 00:03:32,053 --> 00:03:34,813 Speaker 2: Very good, we just got thirty seconds Brad. In Australia, 77 00:03:34,853 --> 00:03:37,293 Speaker 2: I think their capital gains tax is fifteen percent or 78 00:03:37,333 --> 00:03:39,133 Speaker 2: it's ten percent if you have the asset for longer 79 00:03:39,173 --> 00:03:42,933 Speaker 2: than twelve months. Michael Cullen's report was talking about being 80 00:03:43,053 --> 00:03:46,493 Speaker 2: a capital gains tax on the top threshold, the marginal 81 00:03:46,613 --> 00:03:49,533 Speaker 2: tax thresholder you pay, So for some people thirty three percent, 82 00:03:49,573 --> 00:03:52,453 Speaker 2: some people thirty nine percent. Where do you think is 83 00:03:52,453 --> 00:03:53,333 Speaker 2: fear and reasonable? 84 00:03:54,493 --> 00:03:56,493 Speaker 3: I think something around that ten to fifteen percent would 85 00:03:56,493 --> 00:03:59,133 Speaker 3: probably be a bit more reasonable because you've actually got 86 00:03:59,293 --> 00:04:01,213 Speaker 3: that marginal rate at the moment. If you sell a 87 00:04:01,293 --> 00:04:03,373 Speaker 3: house and you're currently caught by the bright line test. 88 00:04:03,653 --> 00:04:06,333 Speaker 3: You hit that thirty three maybe thirty nine percent marginal RAN. 89 00:04:06,613 --> 00:04:09,413 Speaker 3: So current settings aren't good. We do need to, I think, 90 00:04:09,453 --> 00:04:11,333 Speaker 3: have a wider text discussion, but we've got to have 91 00:04:11,413 --> 00:04:13,333 Speaker 3: it out in the open and with a long lead 92 00:04:13,373 --> 00:04:15,693 Speaker 3: time rather than, oh gosh, by the way, I've decided 93 00:04:15,693 --> 00:04:17,213 Speaker 3: to change textels overnight. 94 00:04:17,373 --> 00:04:20,093 Speaker 2: Excellently bred, lovely to have you on. Thank you for 95 00:04:20,133 --> 00:04:23,933 Speaker 2: your wisdom. Thank you, Brad Olson, Informetric's chief exec. 96 00:04:24,733 --> 00:04:28,373 Speaker 1: For more from Simon Barnett and James Daniels afternoons, listen 97 00:04:28,453 --> 00:04:31,293 Speaker 1: live to news talks at b or follow the podcast 98 00:04:31,333 --> 00:04:32,333 Speaker 1: on iHeartRadio.