00:03Millions of Australians who invest in the share market, like Liam Walsh, are crunching
00:08the numbers from the government's tax reforms. He owns $3 million of high growth stocks.
00:14I'm looking for some tissues to cry into because nearly all of my income that I derive
00:20comes from capital growth.
00:23From July next year the government will scrap the 50% tax discount on capital gains for
00:29all assets except those in superannuation and some trusts. In its place, a return to
00:341999 where only real gains above inflation are taxed at a minimum rate of 30%. But gains
00:42accrued prior to next year will retain the 50% discount.
00:47I actually support the policy. I think it's a really good policy. It sucks for me because
00:52I'm going to lose money.
00:53We're discriminating against growth assets. That asset class that generates the biggest
00:58gains for economies through time.
01:01Not all investors will be worse off under the changes. Those with gains well ahead of
01:07inflation will pay more, while those tracking closer to it will fork out less.
01:11I think that the changes could be pretty far reaching and they could have much wider consequences
01:16than people are potentially expecting.
01:19Investment fund founder Chris Bryke worries the changes will hurt aspiring homeowners who
01:25are buying speculative shares to save for a deposit.
01:28And that's still possible in a diversified portfolio. It just becomes a little bit less
01:32appealing and potentially the lower risk investment options that we offer will become more popular
01:37because they have more government bonds and lower risk investments which are hit less
01:41by this new tax.
01:46The capital gains tax changes also apply to property investors except those buying new homes
01:52to boost supply.
01:54A major or drastic move like that can also be a ripple effect.
01:58From next July negative gearing is limited to new properties. Existing investments are grandfathered
02:04except those bought after tonight. Property prices are expected to slow.
02:09I do think that we will see an exodus of investors.
02:13And Domain's Nicola Powell worries renters could suffer.
02:17We already have very tight rental markets and very low vacancy rates. It's still a landlord's
02:22market across Australia and I think that exodus of investors is obviously going to have a detrimental
02:27impact overall on vacancy rates. Budget papers estimate the reforms are likely to have a small impact on
02:35rents adding less than two dollars a week to the current median rental price.
02:40The government says these tax changes are all about intergenerational fairness.
02:44It says it's working with the states to support renters and the reforms will help 75,000 more
02:51Australians get a foot on the property ladder over the next 10 years.
02:56Well will the treasurer sign that one in blood? Because who knows right?
03:00For Liam Walsh and his family every measure counts in the pursuit of home ownership.
03:06I have a 22 year old daughter and I want her to buy a house and right now she can't.
03:12A budget with the promise now of levelling the playing field for first home buyers
03:17to realise the dream of home ownership.
03:20Sold, congratulations and well brought to you folks.
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