Why Albo and Chalmers are right to tackle the capital gains tax discount, in one simple chart

In his budget reply speech, Opposition Leader Angus Taylor said he wants to return to a time when: “a single income earner – on an ordinary wage – has enough for a home deposit and to pay off a mortgage steadily.”

But for many Australians, that reality disappeared at least three decades ago.

It used to be possible. When house prices and incomes moved more closely together, and home ownership was seen as an ordinary milestone rather than something out of reach. Then something happened.

See if you can find on the graph where it all started to go wrong…

In 1999, the Howard Government replaced the previous capital gains tax (CGT) system with a 50 per cent discount on capital gains for individuals. Critics have long argued that the policy tilted the housing market further toward investors and fuelled speculation by making property investment more attractive. The days of housing being primarily a necessity were gone, increasingly, homes became assets.

So, if Angus Taylor wants to return to a time when ordinary wages could buy ordinary homes, then the irony is hard to miss. The Albanese Government’s move to tackle the CGT discount is aimed at addressing one of the very settings many economists and housing advocates argue helped push that dream further out of reach in the first place.