Originally published by Editorial of The Australian.
29.05.2026
The question taxpayers must ask themselves now is, whose money is it anyway? Anthony Albanese has given his answer. He believes property owners, small businesses and investors have been overly privileged because they have been allowed to keep a bigger share of capital profits, even if the money used to invest had already paid its full share of tax.
Privilege is the word used by the Prime Minister on Friday to push back against calls for reforms to the capital gains tax measures in the budget that set a minimum 30 per cent rate. That is unless you are a start-up tech company with lobbying power or a foreign-owned renewable energy company that plans to harvest government subsidies, build wind farms and split.
Other companies, such as gas exporters and miners, are faced with greater government involvement, more red and green tape, and the demands of a resurgent trade union movement. The gas industry has described the federal government’s new export and domestic supply rules as nationalisation by stealth. Unions are threatening to shut down BHP’s Port Hedland port – which ships about $116bn worth of iron ore each year – over a pay dispute in which electricians are seeking wages of $400,000 a year.
Treasury secretary Jenny Wilkinson did everyone a favour on Thursday with her admission that it is the view from Canberra that tax dollars “have to come from somewhere”. As things stand, the top 1 per cent pays one-fifth of the total income tax revenue, and those in the top marginal tax rate now pay over one-third. If Labor’s budget changes had been operating for the past 25 years, the top 1 per cent would have paid an extra $400,000 each.
If that is not enough, the number of employed persons in the top tax bracket jumped from 4.4 per cent in 2019-20 to 7.4 per cent in 2024-25 thanks to bracket creep. Over that period, commonwealth debt increased from $373bn to more than $1 trillion. General government spending rose from $488bn to $785.7bn. And the 2026-27 federal budget forecasts an underlying cash deficit of $31.5bn.
Productivity Commissioner Danielle Wood was stating the obvious on Friday when saying wage and salary earners do “too much of the heavy lifting” on providing government revenues. Dr Wood effectively endorsed Angus Taylor’s plan to index tax brackets, noting the federal government’s plans were unclear on the issue. Jim Chalmers has been keen to highlight small changes Labor has made to the lower tax brackets but this is not where the problem lies. High tax rates start too early and take too much.
The opportunity for reform was lost when the Albanese government repackaged the stage-three tax cuts and distributed the savings to lower tax scales as a cost-of-living measure. Lost in the debate was the fact that adjustments to the lower tax scales had already been delivered in stages one and two. There is a lesson in this for Mr Taylor, who has pledged a staggered reform package to deliver indexation.
The current budget problems will not be solved by imposing an additional burden on capital profits. The government must get its own spending house in order and introduce measures that lift productivity and grow the economy, rather than remove incentives for the private sector to work hard, employ people and invest.
It also requires a commitment to the hard task of spending restraint. Governments must find the discipline needed to spend other people’s money like they had to earn it themselves.
