The Australian government, led by Treasurer Jim Chalmers, has introduced a major tax reform bill to parliament aimed at reshaping capital gains tax (CGT), negative gearing, and delivering modest relief to workers.

The legislation includes a proposed $250 annual tax rebate and broader structural changes designed to address housing affordability and economic inequality.

According to the government, the reforms are intended to benefit first home buyers and younger Australians who have struggled to enter the property market under current tax settings.

A key component of the proposal is the removal of the long-standing 50 per cent CGT discount, replacing it with a system that adjusts gains for inflation.This change would apply across various asset classes, including property, shares, and business investments.

While Labor argues this will create a fairer tax system by reducing preferential treatment for investment income, it has triggered strong criticism from business groups and some state leaders.

Opponents, including the Australian Chamber of Commerce and Industry, warn the reforms could dampen investment, reduce productivity, and harm Australia’s global competitiveness.

Concerns have also been raised about the potential impact on growing businesses, with critics arguing the new system may disproportionately tax successful firms as they scale up.

Western Australia Premier Roger Cook and NSW Premier Chris Minns have both expressed reservations, particularly about the implications for investment in key sectors like mining.The government has indicated it may introduce carve-outs for startups and is consulting with industry stakeholders on further refinements.

However, the opposition has criticised the legislative approach, arguing the government is rushing through flawed policy and deferring key negotiations.

Despite the backlash, Labor remains committed to advancing the reforms, framing them as necessary for long-term economic fairness and housing accessibility.