Another day, day 15 after the budget, and the press is still full of stories trying to evoke sympathy for the downtrodden rich in Australia.
Wed 27 May 2026 12.15 AEST
Photo: AAP Image/Joel Carrett
Another day, day 15 after the budget, and the press is still full of stories trying to evoke sympathy for the downtrodden rich in Australia.
Today, the Australian Financial Review carried an opinion piece by Geoff Francis, a former Treasury official, complaining about the Government’s plans to tax capital gains. He says:
Most Australians start their working lives relying on labour income, build their wealth during their working lives and become reliant on savings income in retirement… savings/investment income should be taxed more lightly than labour. People save from after-tax income, that is, the money that remains after they have been taxed on their labour. Tax savings too heavily and it distorts in favour of consuming now instead of saving for the future.
Francis defers to the Henry Review of taxation that said much the same and so recommended concessional treatment for investment income.
If it is true that wealth is just ordinary people salting away their hard-earned income to build a nest egg for retirement we might have some sympathy.
The ABS provides the data that can clarify this issue with a few simple calculations. The household sector, which includes unincorporated business, saved 5.7 per cent of its disposable income or $102 billion but its wealth grew by $1,564 billion in the four quarters to December 2025.
In a word: capital gains. Savings adds to wealth but so do capital gains, and while savings accounts for 6.5% of the increase in household wealth, capital gains accounts for the rest which was 93.5%.
It is also worth pointing out total household savings was $102 billion which would include the $71 billion due to net contributions to superannuation based on APRA’s data to June 2025.
So it is bunkum for the rich to say all that wealth is taboo for tax purposes because it is hard earned savings. Savings explains just 6.5% of the increase in household wealth and most of that is superannuation anyway. And super is taxed concessionally which raises its own issues.
Well we might ask why ordinary Australians are taxed more than those whose income and wealth grow without having to get out of bed.
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