Treasury has released modelling showing the Albanese government’s tax changes would leave about 90% of young Australians better off, with Treasury secretary Jenny Wilkinson saying the package would deliver gains for most people before any housing-market effects are counted.
Wilkinson unveiled the previously unreleased figures at an Australian Business Economists lunch in Sydney on Thursday, the same day the government introduced the tax changes to parliament. The modelling tested the combined effect of the automatic $1,000 tax deduction, the $250 working Australians tax offset and reforms to capital gains tax and negative gearing, and it found those measures would benefit most younger workers.
The numbers go beyond a simple age split. Wilkinson said around 90% of Australians would have been better off by age 30 if the proposed settings had been in place from 2000, based on lifetime income across the population. She said the benefits from the working Australians tax offset and the instant deduction outweighed the impact of the savings tax changes for most people, while those in the top 10% of lifetime earnings would have been worse off by age 30 under the new system than under the old one.
That matters because the politics of the package have been framed around who pays more and who gains less. Critics of the reforms have argued that some people with significant share market investments may end up paying more tax, including some young Australians, even as the Treasury modelling suggests the broader effect is positive for most of them. Wilkinson said investors with substantial share market holdings would still keep their post-tax profits, and she also rejected claims that the new settings would clearly hurt productivity.
There is another layer to the argument. Reserve Bank research shows the profile of property investors has shifted sharply over time: people younger than 40 made up 35% of investors in 2000 but about 20% by 2023, while those over 60 rose from 12% to 28% over the same period. Against that backdrop, Wilkinson said OECD research does not show clear evidence that favourable capital gains treatment drives investment, beyond compensating for inflation, and argued that applying the new arrangements across all assets is important to avoid creating a new distortion in the tax system.
The modelling does not settle what the reforms will do in practice once housing-market effects feed through. It does, however, put a number on the government’s central claim: for most young Australians, the tax package looks more like a gain than a hit, even if a smaller group of high earners and investors end up carrying more of the load.
