ACTU boss Sally McManus calls for five-year plan to limit negative gearing, CGT concessions to one investment property

Union boss Sally McManus has urged Labor to “bite the bullet” and slash tax benefits for Australians with investment properties through a five-year plan which would only allow people to access the tax incentives on one home.

Speaking to the ABC, the Australian Council of Trade Unions (ACTU) secretary said the changes were needed to tackle intergenerational inequity and calm soaring house prices which have locked young people out of the market.

Under the ACTU’s proposal, which will be debated at the Jim Chalmers’ Economic Reform Roundtable in August, both negative gearing and capital gains tax concessions would be limited to one investment property.

Current conditions would be grandfathered for the next five years for existing homes “to allow people to adjust”.

The move would also annually add about $1.5bn to the budget, or $6bn over the forward estimates.

“One of the biggest issues in terms of living standards for younger people in Australia is the issue of housing affordability. It’s the number one issue. We need to address it,” Ms McManus said on Sunday.

“Young people should have the same aspirations as the generations before them, and at the moment, then don’t. It’s been wiped out by the fact that the housing prices have gone up twice the rate of wages over the last 25 years.”

She said the provisions would target the “small number of investors” who own “25 per cent of investment properties”.

Ms McManus quoted a study from the NSW Productivity Commission in 2024, which found the state was losing about 7000 people aged between 30 to 40 years old a year - something that could result in Sydney being a city with no grandchildren.

“That has been driving or fuelling the housing prices. I don’t think that we ever intended even for this to happen as a result of these tax measures but this is where we’re at,” she said.

“Unless we change it, unless we change it, working people can’t live where they work. They can’t live where they grew up.”

Asked whether Labor had the political will to enact the changes, she urged Labor to “bite bullet” and be “brave enough to do something about it”.

It not, they would be at risk of “abandoning” the younger generations,” she added.

“We’re going to go and argue it. We’re going to advocate for it. In the end, the Government will make their decisions based on what they think is the national interest. We would say that it is in the national interest,” she said.

Previously, Labor has unsuccessfully taken changes to negative gearing and capital gains concessions to the 2016 and 2019 federal elections under former opposition leader Bill Shorten, before Anthony Albanese ended the policies.

However the government has faced pressure from grassroots advocacy group Labor for Housing to reconsider the concessions.