The door is open, but nobody's walking through it yet.
Chalmers says tax system changes should prioritize intergenerational equity, business investment, and fairness in funding services. O'Neil avoided committing to negative gearing or capital gains tax reforms, instead focusing on housing supply and construction code simplification.
- Chalmers said tax changes should prioritize intergenerational equity, business investment, and fairness
- O'Neil declined to rule out negative gearing or capital gains tax reforms
- Labor's 2023 National Construction Code changes added $30,000–$50,000 to new home costs
- Government will pause the National Construction Code until 2029 and use AI to streamline it
- 26,000 homes are currently stuck in environmental approvals; a new strike team will fast-track them
Treasurer Jim Chalmers has signaled further tax reform is possible in Labor's next three budgets, citing intergenerational inequity as a guiding principle. Housing Minister Clare O'Neil declined to rule out changes to property tax concessions like negative gearing.
Treasurer Jim Chalmers walked out of a three-day economic reform roundtable in Canberra with a message that sounded like both a promise and a hedge: the tax system needs fixing, and Labor might do more of it. Speaking on Sunday, he said the government had "policy ambition" and that "more steps" on tax reform remained to be taken. But he was careful not to commit to anything specific. His immediate focus, he explained, would be delivering on election promises—income tax cuts, a $1000 tax deduction, and road user charging—while keeping the door open for broader changes in the next three budgets and beyond.
The framing matters. Chalmers said any future tax changes should be guided by three priorities: improving intergenerational equity, increasing business investment, and making the system fairer to fund essential services. That language about intergenerational inequity is significant. It's a way of saying the current tax settings are contributing to a divide between younger and older Australians—a divide that touches everything from housing to superannuation to family trusts. But he stopped short of naming which tax concessions might be on the table or when changes might come. "It remains to be seen," he told the ABC, whether Labor will actually deliver more tax reform.
Housing Minister Clare O'Neil was less guarded, though in a different way. Asked directly on Sky News whether she would support changes to negative gearing and capital gains tax concessions for property investors with multiple homes, she simply did not answer. Instead, she pivoted to her stated objective: building homes more quickly and increasing supply. When pressed again about whether the government was undertaking "massive tax reform" and possibly taxing people more, she denied the assertion and said Chalmers had not advocated for raising taxes on older Australians. "This is not something that the government's considering at the moment," she said. The careful phrasing—"at the moment"—left room for future reconsideration.
The Australian Council of Trade Unions had called on Labor to reduce negative gearing and capital gains tax concessions to apply to just one property, with current provisions grandfathered for five years. That proposal sits in the background of these conversations, a marker of what some in the labor movement believe should happen. But the government has not embraced it, and O'Neil's refusal to rule it out is not the same as endorsing it.
O'Neil also acknowledged a separate housing cost problem. Labor's 2023 changes to the National Construction Code—a 2000-page document governing building standards—had likely added $30,000 to $50,000 to the cost of new homes, she admitted. The construction sector had been pushing back hard on the code's complexity. In response, the government announced on Saturday that it would pause the code until 2029, allowing only essential safety and quality changes to proceed. The government plans to use artificial intelligence to streamline the document. O'Neil said the original changes were necessary to improve energy efficiency standards when Labor came to power in 2022, but she acknowledged the code had become "unworkable" for builders. The Productivity Commission had identified it as the main federal barrier to building the homes Australia needs.
O'Neil will also work with Environment Minister Murray Watt to fast-track environmental approvals for more than 26,000 homes currently stuck in the process. A new strike team within the Department of Climate Change, Energy, Environment and Water will handle the work. The moves signal that the government sees housing supply as urgent, and that it is willing to ease regulatory burdens to address it. But the question of whether tax concessions for property investors will be part of the solution—or part of the problem—remains unresolved. Chalmers has left the door open. O'Neil has declined to walk through it. For now, the government is focused on the supply side: building more homes, faster, with fewer regulatory obstacles. Whether that alone will address intergenerational inequity in housing is a question the next three budgets may begin to answer.
Notable Quotes
The roundtable was never about finalising tax policies, it was about informing tax policies for the next three budgets and beyond.— Jim Chalmers, Treasurer
This is not something that the government's considering at the moment.— Clare O'Neil, Housing Minister, on property tax concession reforms
The Hearth Conversation Another angle on the story
Why did Chalmers use the phrase "intergenerational inequity" so deliberately? What's he really signaling?
He's naming a problem without committing to a solution. If you say the tax system is unfair to younger people, you're implicitly saying older people benefit from current settings—superannuation, capital gains on property, family trusts. But naming it doesn't mean he'll change it. It's permission to think about change later.
And O'Neil's non-answer on negative gearing—was that a dodge or a signal?
Both. She didn't say no, which matters. But she also didn't say yes. She redirected to supply, which is her real focus. Housing costs are driven by scarcity, not just tax policy. She's betting that building more homes solves the problem without touching property tax concessions.
The construction code pause until 2029—that's a long time. Why not fix it faster?
Because fixing a 2000-page document is genuinely complex. They're using AI to help, but they also need to consult, test, rebuild. And politically, they can say they're addressing the problem without delivering immediate relief. By 2029, the political landscape will have shifted.
So is the government actually going to reform property taxes or not?
Not in the next year or two. Maybe after the next election, if they win. Right now they're managing competing pressures: the construction sector wants regulatory relief, unions want tax reform, younger Australians want cheaper housing. The safest move is to increase supply and leave tax policy for later.
What does the ACTU's proposal—negative gearing limited to one property—actually do?
It stops investors from deducting losses on multiple properties against their income. It makes property investment less profitable for people with portfolios. It's a wealth tax by another name. The government isn't touching it yet.
What should we watch for in the next budget?
Whether Chalmers actually proposes tax changes or just talks about them. And whether O'Neil's housing initiatives actually speed up construction. The real test is whether supply increases and costs fall. If they don't, pressure for tax reform will build.