Susan Lloyd-Hurwitz, chair of the National Housing Supply and Affordability Council and Labor’s housing tsar, has expressed reservations about the Albanese government’s proposed tax changes, arguing that the measures appear focused more on wealth redistribution than on increasing housing supply. Her remarks came during a parliamentary session on Monday, intensifying a debate that has drawn support and criticism from various quarters.

The government’s May budget introduced a package of reforms aimed at reforming property taxation, including scrapping negative gearing for new investors in existing properties, removing the 50 percent capital gains tax (CGT) discount, and implementing a minimum 30 percent tax rate on capital gains. Officials project these measures would reduce housing supply by approximately 35,000 homes over the next decade.

Prime Minister Anthony Albanese has defended the changes, describing them as long-overdue adjustments to tax settings that will incentivize the construction of new housing and address longstanding market imbalances. The prime minister emphasized that experts have advocated for such reforms over several decades.

Lloyd-Hurwitz acknowledged the budget’s forecasted reduction in housing supply but stressed the broader context of intergenerational equity. She suggested the reforms aim to curb speculative investor demand, which current tax policies tend to encourage, thereby addressing the divide between Australians who own housing wealth and those who do not. “In the council’s view, assuming that assessment is correct, accepting a near-term supply impact for a greater long-term payoff is something we would support,” she said.

Her comments align with opinions expressed last month by Treasury secretary Jenny Wilkinson, who similarly indicated that the tax changes are less about increasing supply and more about redistributing wealth.

Supporters of the government’s shift to an inflation-indexed capital gains tax include former Productivity Commission chair and e6l chief executive Michael Brennan and economist Saul Eslake. However, both have warned against the proposed minimum 30 percent tax rate on capital gains, recommending that the government reconsider this aspect of the plan.

The controversy has extended to parliamentary procedures, with critics alleging a bias in the Senate inquiry examining the changes. Opponents, barred from the official inquiry, have organized a separate event adjacent to the Sydney hearing and plan to protest what they describe as a rushed and one-sided process. Business leaders are calling on the Albanese government to extend the inquiry period and to release Treasury modelling that details the potential economic impacts of the proposed tax reforms.

As the debate continues, the government faces mounting pressure to balance efforts to address housing affordability and equity with concerns about potential adverse effects on housing supply and investor confidence.