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Capital gains tax breaks spread inequitably across NSW and the country

ACOSS

New South Wales receives the greatest share of the capital gains tax (CGT) discount nationally, but the benefit flows overwhelmingly to just a handful of the state’s highest-income, inner-Sydney electorates, new ACOSS analysis shows.

 

The top four NSW electorates by average capital gains tax breaks - Wentworth, Warringah, Bennelong and Bradfield - receive nearly a fifth (18%) of national expenditure on the CGT discount, worth around $4.2 billion per year, based on analysis of the latest ATO, Treasury and ABS data.

 

In these electorates, where the combined average taxable income is $132,731, people receive an average capital gains tax break of $7,975 per year - more than 5 times the national average benefit of $1,470.

Meanwhile, someone in western Sydney, where the average taxable income is $53,542, receives an average CGT concession of just $333 - only around a fifth of the national average.

ACOSS’s analysis of all 150 federal electorates also shows the stark inequality across the country, with the CGT discount benefit flowing overwhelmingly to Sydney and other capital cities and mostly to NSW and other eastern states. 

"It’s clear this tax break funnels billions into the wealthiest parts of our cities and country at the expense of those doing it tough,” said ACOSS CEO Dr Cassandra Goldie. 

 

"This is money that could be invested in social housing, essential services, income support and the communities that need support the most. Instead, it’s being used to supercharge inequality. That is not a fair or sensible use of public funds."

 

“When a policy so clearly supercharges inequality while driving up home prices, it simply must be in the national interest for urgent reform.” 

Read the ACOSS briefing note: The unfair distribution of the CGT discount by electorate. View the interactive map here.

Top electorates in NSW by CGT discount benefit in 2022-23:

  • Wentworth: $1,755.6m total benefit / $13,450 per person

  • Warringah: $923.8m total benefit / $7,158 per person

  • Bennelong: $817.2m total benefit / $6,208 per person

  • Bradfield: $665.0m total benefit / $5,092 per person

Lowest-receiving electorates in 2022-23:

  • Chifley: $41.5m total benefit / $393 per person

  • Watson:$41.4m total benefit / $398 per person

  • Blaxland: $38.8m total benefit / $333 per person

Comparisons across the country in 2022-23:

  • Sydney - average benefit per person: $2,402 

  • Darwin - average benefit per person: $522 

  • NSW receives four times the average CGT discount per person than the Northern Territory, and more than twice that of Tasmania and South Australia

ACOSS is calling on the Federal Government to:

  • Halve the 50% CGT discount progressively over 5 years

  • End negative gearing immediately for new investments, and phase it out over 5 years for existing investments

  • Invest the savings in essential supports and services, including social housing and income support


Contact details:

Charlie Moore: 0452 606 171