Assistant Treasurer and Financial Services Minister Daniel Mulino has defended Labor’s controversial housing and tax reforms, saying the changes are aimed at improving intergenerational fairness and helping younger Australians enter the property market.
Speaking to multicultural media following the Federal Budget, Mulino said the government’s reforms to negative gearing, capital gains tax arrangements and discretionary trusts were designed to rebalance the tax system while boosting housing affordability.
The Albanese Government announced that future investors purchasing existing properties would no longer be able to access negative gearing benefits, although all current arrangements would be fully grandfathered.
“I do want to stress that our changes to negative gearing arrangements will be grandfathered,” Mulino said.
“For people who own existing properties and are negatively gearing them, they can continue to offset any losses they have against their other income.”
However, negative gearing will still apply to newly built homes in an effort to encourage additional housing supply.
Mulino said Treasury modelling suggested the reforms could shift around 75,000 properties from investor ownership to owner-occupier housing over the medium term, largely benefiting younger first-home buyers.
The government has also announced changes to discretionary trust taxation, introducing a minimum 30 per cent tax rate on beneficiaries receiving income through discretionary trusts, with exemptions for primary producers and vulnerable children.
Mulino argued the changes were necessary because the number of discretionary trusts had doubled in recent decades, contributing to unequal tax outcomes.
“What we want is a system where people earning income from assets and capital are treated more alike to people earning income from labour,” he said.
Revenue raised through the tax reforms will help fund Labor’s new Working Australian Tax Offset, providing a $250 annual tax offset to more than 13 million Australian workers.
Mulino said the broader goal was to shift tax benefits towards wage earners while maintaining responsible budget management during ongoing global economic uncertainty.
The Assistant Treasurer also defended the Budget against concerns that the measures could fuel inflation or trigger instability in the housing market.
He acknowledged Treasury forecasts showed inflation could temporarily rise towards five per cent amid global economic pressures linked to ongoing Middle East tensions and fuel price shocks, but insisted Australia remained economically resilient.
“The difficulties that we’ve faced in the macroeconomic circumstances are not a reason for us to say it’s too hard to reform now,” Mulino said.
He said the Budget included significant savings measures, particularly reforms to the National Disability Insurance Scheme, alongside more than $64 billion in spending reprioritisations aimed at easing inflationary pressure and improving the long-term budget position.
Mulino also highlighted ongoing government efforts to boost housing supply, including an additional $2 billion for infrastructure supporting land release and new housing developments.
During the media briefing, he also acknowledged the important role multicultural and community media organisations play in communicating government policy to culturally and linguistically diverse communities across Australia.
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