Paul Keating, the former Labor Prime Minister of Australia, has unleashed a scathing attack on the Coalition and the startup sector, criticizing their claims that Labor's capital gains tax (CGT) reforms will stifle entrepreneurship. In a blistering statement, Keating argues that the changes are "marginal" and essential for addressing the housing affordability crisis. He takes aim at John Howard and Peter Costello, accusing them of distorting the tax system and benefiting wealthy individuals at the expense of wage earners.
Keating highlights the impact of the 1999 CGT changes, which led to a significant increase in house prices, from nine times the average household income to 16 times. He emphasizes that wealthy individuals are now opposing the government's reforms, despite the evidence of the price shock caused by Howard and Costello's policies. Keating believes that the proposed CGT changes, which include a new cost-base indexation model and a minimum 30% tax rate, are necessary to correct the imbalance between income and capital taxation.
The former treasurer, known for his economic reforms, points to the success of tech companies like Canva as evidence that the tax changes will not deter entrepreneurship. He argues that the current tax system heavily taxes income while lightly taxing capital, leading to housing unaffordability for a generation. Keating's intervention comes as the government faces a backlash, with the opposition and some tech founders opposing the reforms.
The debate revolves around the fairness of taxing income earned from working and assets equally. Prime Minister Albanese defends the changes, while Shadow Treasurer Tim Wilson warns of their potential impact on the startup sector. The opposition leader, Angus Taylor, pledges to repeal the tax measures if the Coalition wins the next election. The NSW premier, Chris Minns, joins the criticism, calling for urgent action on personal income taxes.
As the government considers pushing through the budget legislation before the winter parliamentary break, Keating's commentary adds fuel to the fire, raising questions about the future of housing affordability and the role of taxation in shaping economic opportunities.
