Capital tax gain reform in Australia? By Judith Sloan in The Australian.

Plenty of countries do not tax capital gains. New Zealand doesn’t have one. Singapore doesn’t have one. It is highly concessional in the US. When the UK increased its rate of capital gains tax, the revenue raised fell significantly. Our current rate of capital gains tax is high by international standards. …

Increasing the tax burden on investors will, all things being equal, lead to lower investment. Investment is the basis of productivity improvement. …

The second point to note is that capital gains tax should only apply to real (after inflation) gains. This was the case from the start of our capital gains tax, although the clunky use of annual CPI adjustment was replaced by the simple discount of 50 per cent at the beginning of the century. (For a time, investors could choose between the two methods.) …

Our muddle-headed government of the envious:

It’s about intergenerational equity; it’s about the unfairness of the system; it’s about increasing the rate of home ownership. In other words, it’s the vibe, rather than the facts.

Treasury’s estimates of the cost of this discount are completely bonkers …

Taxation doesn’t have much effect on housing prices:

Rising house prices are a global phenomenon; the answer is unlikely to be just about arcane features of our tax system. It should also be noted that the capital gains tax and negative gearing arrangements have been in place much longer than the rapid rise in house prices.

Ask any sensible economist about dealing with housing affordability and the answer will always be the same: increase supply. And the need to increase supply is made more urgent when the population is growing strongly — because of immigration, in our case. …

The crucial challenge is to raise the rate of productivity growth:

Australia currently ranks 16 out of 24 advanced economies when it comes to the level of labour productivity.