So says Federal Health Minister Mark Butler, commenting on Budget speculation over the past week.

He is correct. Many taxpayers will have read the plethora of Budget leaks and interviews to try to decipher the direction of Australia's tax policy following tonight's Federal Budget.

The tax landscape for capital gains, negative gearing and trusts seems likely to change substantially.

It's hard to see how some of the changes are not inflationary at a time when the Reserve Bank is raising interest rates in an attempt to quell inflation.

If, as is speculated, existing negative gearing arrangements are preserved, the Government is perhaps trying to limit landlords raising rents to compensate for the loss of tax benefits. Restricting negative gearing to new homes will skew investment towards this area. Which is what the Government wants.

If the Government eliminated all existing negative gearing arrangements, it would likely see a sharp decline in rental properties in inner city areas as cash-strapped investors sell to home occupiers, forcing existing renters to the outer city suburbs. And a sharp rise in rents by those landlords who decide to stay, aided by tenant demand for the reduced rental stock.

The proposed changes to capital gains tax may result in Australia having one of the world's highest capital gains tax regimes. As one commentator wrote, it will result in people ploughing their money into the CGT-free owner-occupied home, forcing up property prices. As a tax free option, this seems likely. Preserving the CGT status of existing investments may temper this.

Any changes to the taxation of trusts are likely to be inflationary as landlords using these structures seek to raise rents to remain tax neutral. Trusts are also used by many contractors, such as plumbers and electricians. (The contractor's spouse often does the business's accounts without drawing a salary, with the trust distributions allowing both to claim the tax free threshold.) Expect contractors to either restructure or seek to raise rates in an attempt to remain tax neutral.

[Update - some rollover relief will be available for those wishing to switch out of trusts.]

With some Federal politicians using up to 17 trusts, it's not surprising that the Government wants to act. Contractors (and others) may just be caught in the crossfire.

The devil will be in the details but the Government may follow the company tax model for trusts, adopting a base rate entity approach, or some other form of exemption for small businesses (similar to farm exemptions).

[Update - 30% tax payable by the trustee with non-corporate beneficiaries receiving non-refundable credits for the tax payable by the trustee.]

All will be revealed when the Federal Budget is brought down this evening although the full impact of the tax changes may be several years away.

Federal Budget

May 2026

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Federal Greens MP for Griffith Max Chandler-Mather has announced a proposal to freeze residential property rents for a two year period followed by a maximum 2% increase each two year period thereafter until wages catch up to rents.

The proposed national rent control measures are to be backdated to 1 August 2022. Any residential properties not rented at that time (including new builds) can only be rented at the suburb's median rent. Rent stays frozen even if a landlord renovates the property between tenancies.

The Greens propose that the Federal government force each State and Territory government to impose these rent control measures while at the same time ending negative gearing and CGT concessions for residential property and calling on the Reserve Bank to halt interest rate rises.

Missing from the proposal was any discussion of a corresponding freeze and subsequent caps on government charges such as council rates, water rates and land tax. No comments either on whether (somehow) a freeze should be enacted on insurance, strata levies and maintenance costs.

Also missing was any comment that a similar proposal was made in Qld in 2021 by Greens MP for South Brisbane Amy MacMahon as a Private Members Bill. One of the provisions of the Residential Tenancies and Rooming Accommodation (Tenants’ Rights) and Other Legislation Amendment Bill 2021 stated that rent increases be limited to CPI increases.

This proposal was rejected by the Qld Parliament and the Bill was discharged on 14 October 2021.

The Greens claim Victoria froze rents for six months during the Covid-19 pandemic and this justifies their rent freeze proposal.

However, the pandemic rent freeze in Victoria was accompanied by cost related measures such as deferrals and interest waivers on costs such as council rates and water rates. Similarly, Qld residential property investors were able to access discounts, deferrals and reductions on costs such as council rates and land tax. The Greens propose no such equivalent measures.

The Greens proposal seems to have a few hurdles. As PM Anthony Albanese said recently - "It's not clear to me short of nationalising property how that could be achieved and I haven't seen any proposal."

It is not clear whether the PM will seek to impose the Greens rent control measures on the State and Territory governments.

Update - Meanwhile, Greens MP for South Brisbane Amy MacMahon plans to resurrect her failed Bill, update it for the proposed more restrictive rent control measures and submit it to Qld Parliament for consideration.

Proposal for rent control put forward

Report No. 8, 57th Parliament - Residential Tenancies And Rooming Accommodation (Tenants' Rights) And Other Legislation Amendment Bill 2021

Greens Push To Freeze Qld Rents

August 2022