Billions available in top end trim
Research has again showed the big budgetary gains to be made by cutting high end concessions.
A review of data from the National Centre for Social and Economic Modelling says more than half the benefit of the capital gains tax (CGT) exemption on the family home is enjoyed by households in the top 20 per cent of incomes.
Ending this concession would save about $46 billion.
It is the key finding of a new Capital Gains Tax report issued by think tank The Australia Institute.
With an annual loss of $46 billion, the CGT exemption for primary residences currently costs the Government more than its entire defence or aged pension spending.
Australia Institute executive director Ben Oquist says any attempt at serious tax reform would become “nonsensical” if it did not include the exemption.
“While it's probably politically unrealistic to think about removing that exemption altogether, one thing we've modelled today is looking at removing the exemption for homes worth more than $2 million,” he told reporters.
“Such a move would affect a very small amount of the population.”
Prime Minister Malcolm Turnbull saying he will put fairness at the centre of future economic changes and tax reforms, though many believe the fix will consist largely of an increase in the Goods and Services Tax (GST).