Extract from ABC News
Analysis
Anthony Albanese and Jim Chalmers have made generational equity the test for this budget. (ABC News: Callum Flinn)
Labor is betting the house on young Australians' desperation to buy their own.
The political gamble of ripping up investment property tax settings barely 12 months after explicitly promising not to do so is high risk.
With public trust in institutions sinking to historic lows, there's less chance of forgiveness for a government that goes back on its word.
But Prime Minister Anthony Albanese and Treasurer Jim Chalmers are making a calculated guess, no doubt backed up by reams of internal Labor research.
They know the job of convincing the electorate to accept sweeping changes to negative gearing and capital gains tax is already half done.
No one born after the wedding of Princess Diana and Prince Charles needs an economics degree to understand that the current housing system is not working for them; they've experienced it firsthand.
Never mind the crushing disappointment of turning up to an auction only to realise the winning bidder was motivated by a raft of generous tax settings.
Labor unveils 'ambitious' plan for tax reset in 2026 budget
Banking on young voters
Housing prices have now climbed so high that plenty of millennials and elder Gen Zs wouldn't even consider registering for a paddle.
Most parents are also acutely aware — and increasingly anxious about — how hard it is for their children to get a foothold on the property ladder.
So, Labor can bank on those voters as supporters of any policy changes that help level the playing field for first home buyers.
But ask any Australian who is happy with Tuesday night's tax U-turn, and it's likely they would have backed such a proposal at the ballot box a year ago.
If this base from which the government could build consensus for reform already existed, the question is why they didn't use it to secure an election mandate?
In the coming days, the one thing Albanese, Chalmers, and any other minister fronting a camera are guaranteed to be asked is "why now?"
What changed to make a proposal that was so untenable just a short time ago into the centrepiece of a federal budget?
Chalmers attributes the backtrack to a recent realisation that the housing crisis was too severe to limit the government's response to boosting the supply of homes, when other levers were at its disposal.
And if that dubiously timed epiphany doesn't convince, he urges Australians to focus on the "substance" of the policy announcement over the politics.
Not a suggestion the Coalition will be taking up, having already vowed to oppose the changes, citing the standalone impact of a forecast reduction in 35,000 new dwellings built over the decade.
An opportunity for opposition
Labor is offsetting that with a $2 billion investment in local infrastructure to support the construction of 65,000 additional new homes over the same period.
Beyond that, the government is relying on its persuasive powers to dissipate voter anger eventually.
The strategy has all the hallmarks of Labor's approach to rewriting the stage-three tax cuts in its first term after promising not to at the 2022 election.
In fact, it was that experience that drove journalists to question Albanese's assurances last year that negative gearing and CGT reforms weren't on Labor's agenda.
Stage three had proven that governments don't change their mind until they do.
Being constantly asked to restate his position visibly irritated the PM last year, but in the end, Australians gave him the benefit of the doubt.
It is unlikely he will be afforded the same luxury in 2028.
Labor has so comprehensively dismantled the pact made between voter and politician at the ballot box, that there is little chance ministers will be taken at their word next time.
That presents a significant opportunity for political opponents to exploit.
Evergreen scare campaigns about secret plans to impose inheritance taxes or include the family home in certain asset calculations are far more likely to take hold in an electorate primed to assume the government is probably lying.
Albanese's thumping 94-seat house majority gives Labor a buffer to weather such attacks, and lots of his caucus will be happy the party has expended political capital in this way.
Many members of his current frontbench were there when former Labor leader Bill Shorten first took similar tax changes to the electorate a decade ago.
Shorten picked up 14 lower house seats at the 2016 election with a policy platform that included winding back CGT and negative gearing.
But it's the election three years later, when those same policies, along with others, copped substantial blame for Labor's defeat, that likely sticks more in the mind.
The political gamble of ripping up investment property tax settings barely 12 months after explicitly promising not to do so is high risk. (ABC News: Adam Kennedy)
A blatant transfer of wealth
With all of the revenue from the changes announced on Tuesday being returned in the form of tax offsets for workers and businesses in the short term, Labor can neutralise some criticism.
But the government will still be accused of redistributing wealth from older, wealthier asset-owning Australians to younger, generally poorer workers.
Labor argues this blatant transfer of wealth is actually "rebalancing" a system that for many decades allowed those asset owners to tip the scale in their favour.
Albanese and Chalmers have made generational equity the test for this budget.
If the reforms help younger Australians believe home ownership is within reach, Labor can expect to collect a political dividend.
But if the promise of a fairer housing market fails to materialise, the government will have traded one of the most valuable commodities in politics — trust — for very little in return.
