Polling shows government's equity narrative isn't landing – and for mortgage brokers, the real work is just beginning
Despite the Anthony Albanese government's framing of the capital gains tax (CGT) and negative gearing reforms as a matter of intergenerational fairness, polling data reveals the message isn't sticking the landing.
According to Freshwater Strategy polling conducted shortly after the Budget announcement, 45% of respondents said the proposed changes had decreased their trust in the government.
Claire Gunning, partner at Radburn Partners, said this and similar polls “are mainly showing fairly negative sentiment around aspects of the policies, in particular the kind of broken promise line”.
The findings were disclosed in a Tuesday webinar hosted by the Mortgage and Finance Association of Australia (MFAA).
Under treasurer Jim Chalmers’ Federal Budget proposal, negative gearing will be limited to new residential builds from July 2027. The existing 50% CGT discount will be replaced by inflation-adjusted indexation, though new builds retain the option to use the discount to preserve investor appetite for new construction.
Falling public trust centres on Labor not taking these sweeping CGT and negative gearing reforms to an election, while people don't necessarily see the direct link between the proposed changes and the goal of housing affordability for younger Australians.
Perhaps most damaging is the generational disconnect. Among the 18–34 cohort – the very group the budget was designed to benefit – 42% expect to be worse off versus just 20% better off. In the 65-plus group, a mere 3% believe they'll personally benefit.
Source: Freshwater Strategy polling
Gunning cautioned that current polling skews toward politically engaged Australians, and that "it does take a little while for the dust to settle". But the early indicators suggest the government's equity narrative has yet to win over the public it was built for.
Bill faces political test
Labor holds a strong majority in the House of Representatives (94 seats), but requires support from the Greens and/or crossbenchers in the Senate to pass the proposed CGT and negative gearing reforms.
The legislation is expected to be introduced to the lower house this Thursday, with the opposition having already declared its intent to oppose the changes.
The committee review process could be very short – a matter of days – or skipped entirely if the government negotiates directly with the Greens.
"My guess, and it is a guess, is that there will either be a very short, sharp committee process or there'll be a negotiation to actually skip that,” said Gunning. “Most bills of this nature would go to committee. However, we understand the government's very keen to move quickly and if they're able to negotiate that outcome with the Greens, there is a possibility that this would move through without a committee process."
If negotiations proceed smoothly, the legislation could pass by the end of June, with the framework allowing further amendments via regulatory rules and instruments during implementation.
While The Greens are anticipated to support the bill, they are pushing for amendments that will see the bill go even further than what is currently proposed.
Polling among MPA readers show the majority believe Labor will make either a partial or full backtrack on the proposals, while 41% believe Labor will stick to its guns.
Meanwhile, industry is campaigning for CGT carve-outs for tech startups and other sectors.
Will Budget discourage ambition?
The Council of Small Business Organisations Australia (COSBOA) has warned that the proposed reforms risk undermining the entrepreneurial foundations of the Australian economy, with mortgage brokers among those raising concerns.
COSBOA chief executive Skye Cappuccio (pictured, left) said the feedback from the sector was unambiguous. "What we are hearing very clearly from small businesses is that this is not just a conversation about tax. It is about whether Australia still encourages people to back themselves and build something over the long term," she said.
Cappuccio pointed to the cumulative pressures already weighing on operators. "Small businesses are looking for certainty, simplicity and practical support to help them manage the cumulative pressures of fuel, energy, insurance, wages, rent, freight and compliance costs.”
The concern, Cappuccio argued, is that existing concession thresholds no longer reflect modern business realities. "Small business owners need confidence that the years of risk, sacrifice and reinvestment required to build a business will still be recognised and supported.”
Read more: Broker spends thousands on anti-Budget ads as MPs head to parliament
COSBOA is calling on the government to modernise the CGT concessions for small businesses by increasing eligibility thresholds to include businesses with annual turnover under $10 million and net capital assets under $12 million, and to ensure fair valuation arrangements are in place before any changes proceed.
Melbourne mortgage broker Damien Roylance said many in the industry were questioning whether the risk of building a business in Australia remained worthwhile given the proposed changes.
“I still consider myself a start-up 10 years into business because we’ve spent that entire time reinvesting back into growth, staff and building the business,” said Roylance.
“Like many small business owners, I could have taken a bigger income personally, but instead you back the business because you believe the long-term investment will eventually pay off.
“The concern with the proposed CGT changes is that they alter the equation for people who are taking those risks.”
Not just a property problem
Angie Hicks, partner at EY, was surprised that the removal of the CGT discount extended beyond property.
"If you own shares in a company or are receiving employee options, they're also caught up in this CGT shift as well, which I think was the biggest surprise for me. From a personal perspective, whilst most things were leaked, I really didn't think (Labor) would go that far with it,” said Hicks.
Small-business owners face a double whammy – property portfolios are often the vehicle through which business-built wealth is preserved and passed down. As Hicks said: "I deal a lot with entrepreneurs who own businesses and the property portfolio is almost the second generation wealth. There's an impact there as well."
Her insights were shared during the MFAA seminar, which was hosted by MFAA executive, policy and legal Naveen Ahluwalia (pictured, right).
"The key message for us today is that the proposed changes are significant but they are not yet settled. A lot of the detail will be coming through in the next few weeks and months,” said Ahluwalia.
Ahluwalia reframed the moment as an opportunity for the broker community: "There's a huge, huge opportunity here for our members as well." The shift in investment conditions doesn't close the door on strategy – it changes the shape of it. Ahluwalia drew on a personal example to drive the point home: "I'm a big rentvester and it's not about not having opportunity. It's about re-pivoting your strategy."
MFAA chief executive Anja Pannek said bringing together experts was an important step in helping members navigate this uncertain environment.
“These are complex reforms with the potential to affect a broad range of clients, from investors and business owners through to first home buyers and renters. Bringing together leading experts to work through the detail and put it in context for our members is exactly what the MFAA is here to do,” Pannek said.
“Our members have been fielding questions from clients about what these changes could mean for their investment strategies, their borrowing capacity and their financial futures since Budget night. We want to make sure brokers have the knowledge and resources they need to have those conversations with confidence.”
