Tax and Transfer Policy Institute

02/06/2026

Despite major housing announcements in the 2026 Budget, rental stress remains a growing challenge for many Australians on low incomes.

In this Budget Forum article, Peter Whiteford examines the latest data on Commonwealth Rent Assistance (CRA), showing that despite earlier improvements, rental stress has returned to 2022 levels. The article argues that increasing CRA remains one of the most direct ways to reduce housing stress for low-income renters. Read the full analysis here 👇

Rental stress is rising for low-income Australians. Increasing Commonwealth Rent Assistance could help ease housing pressures and improve affordability.

01/06/2026

The 2026–27 Federal Budget has unsettled estate planning because it places two structural tax reforms beside a familiar succession-planning vehicle: the discretionary testamentary trust.

📌 What's proposed?

From 1 July 2027, the first proposed measure would replace the 50 per cent CGT discount for individuals, trusts and partnerships with cost base indexation and a 30 per cent minimum tax on net capital gains.

From 1 July 2028, the second would impose a 30 per cent minimum tax on discretionary trust taxable income, with non-refundable credits for non-corporate beneficiaries and specified exclusions.

These are proposed reforms, not enacted law. But Budget announcements can still affect present planning.

📌 Why does this matter beyond tax?

Testamentary trusts serve purposes that go well beyond income splitting. They protect vulnerable beneficiaries, preserve family assets, manage blended families, defer control and support business succession planning. A regime that treats discretionary power as the problem may therefore compromise important non-tax functions - continuity of family businesses, control of closely held assets and intergenerational governance - unless exclusions and credits are carefully designed.

📌 The hard questions are legislative.

Will grandfathering protect wills already signed but not yet activated, or only assets held by trusts on Budget night?

How will substituted assets, reinvested proceeds and borrowed funds be traced?

How will fixed, discretionary and hybrid testamentary trusts be classified?

Until draft legislation answers those questions, careful analysis requires a clear distinction between enacted law, announced policy and political characterisation.

The real test of the reform will be whether it can curb tax-driven income splitting without collateral damage to the legitimate protective and succession-planning purposes for which testamentary trusts are often used.

Sylvia Villios sets out the full analysis 👇

https://www.austaxpolicy.com/testamentary-trusts-after-the-2026-27-budget-estate-planning-tax-reform-and-the-death-tax-debate/

The 2026–27 Federal Budget proposes major changes to CGT and discretionary trust taxation. Understand what it means for your estate planning and existing wills.

22/05/2026

The Federal Budget makes important steps toward intergenerational equity, but young people expect more. Asha Clementi and Mehvish Mehboob from The Persephone Network analyse the Government’s commitments to intergenerational equity, housing reform, women’s leadership, economic justice, and freedom from violence.

Read what they have to say here 👇

Young women from The Persephone Network respond to the Federal Budget, examining intergenerational equity, housing, gender equality and safety.

21/05/2026

How can structural tax reform improve both the efficiency and equity of the housing system?

Writing for Austaxpolicy, Gavin Wood and Susan Smith outline a model to replace transaction-linked property taxes with a recurrent, two-tier Land Value Tax. The authors argue that traditional mechanisms like stamp duty reduce labour and residential mobility, while capital gains exemptions can create market distortions.

The proposed "Feebate" system design seeks to establish a more level playing field between first-home buyers and secondary property investors. Additionally, the model evaluates how the resulting revenue could be structured to fund social housing infrastructure and provide a regular dividend to residents.

Read the complete policy proposal here: https://www.austaxpolicy.com/budget-forum-2026-feebates-tax-reform-to-raise-funds-for-a-fairer-and-more-efficient-housing-future/

Gavin A Wood, Emeritus Professor, Centre for Urban Research, RMIT University Susan J Smith, Hon Emerita University Professor of Social and Economic Geography, and Life… Read More ›

18/05/2026

Australia’s proposed $1000 instant tax deduction is aimed at simplifying tax time, but is it that simple in practice? Read what Elizabeth Morton and Lisa Greig have to say about the new measure here👇

Introduction The proposed $1000 “instant” tax deduction seems to be a win for many Australian taxpayers as they will get a deduction without spending a… Read More ›

11/05/2026

Does halving the fuel tax actually help those who need it most, or does it create bigger economic potholes down the road?

In our latest Budget Forum piece, John Freebairn takes a critical look at the temporary cut to the fuel excise.

As electric vehicles increasingly share our highways, what should a sustainable, long-term road funding solution look like? ⚡🛣️

Explore the full breakdown on the Austaxpolicy blog:
https://www.austaxpolicy.com/budget-forum-2026-running-on-empty-the-hidden-costs-of-halving-the-fuel-tax/

11/05/2026

“It’s Not Fair: Why the Capital Gains Tax Discount needs to go”

The capital gains tax discount was introduced more than 25 years ago by then Treasurer Peter Costello to encourage investment, compensate for inflation, and improve international competitiveness.

However, research over the past quarter century shows the discount has produced significant inequities, inefficiencies and revenue losses, while failing to meet the principles of a well-designed tax system.

To kick off Austaxpolicy’s , Chris Evans explains why the discount is unfair, inefficient and too costly, offending the principles of vertical, horizontal and intergenerational equity that underpin Australia’s tax system.

Read more 👇

Why Australia’s capital gains tax discount should be reduced or abolished: explore its impact on housing affordability, inequality, efficiency, and the federal budget, plus practical reform options ahead of the May Budget.

04/05/2026

When governments want to cut carbon emissions, they can choose from a carbon tax or an emissions trading system

But which policy is more effective?

New research by Hyesu Im & Young-Han Kim finds that it depends on the development stage.

Emissions trading systems tend to be more effective in richer economies with stronger institutional capacity. In contrast, carbon taxes appear to work better in developing economies.

What makes this finding especially important is that much of the public debate still treats carbon pricing as an abstract choice between two instruments. Im & Kim's research suggests that this is the wrong starting point, highlighting the need to focus on a country's institutional capacity, industrial structure, and policy environment.

Carbon pricing policies compared: carbon tax vs emissions trading system (ETS). Research shows effectiveness depends on development stage and institutional capacity.

03/05/2026

Invitation to contribute to Austaxpolicy's Budget Forum 2026 📣

This year’s Budget is expected to deliver tax reform of a kind that we have not seen in a generation. In the lead-up to the 2026-27 Budget, public discourse has focused on proposals to address intergenerational inequity, wealth inequality, and housing affordability. The recent Senate Inquiry on the Operation of the CGT Discount found that: ‘the concessions provided by the capital gains tax discount, in combination with negative gearing, have skewed the ownership of housing away from owner-occupiers and towards investors,’ and that the ‘benefits of the capital gains tax discount are also unequally distributed, with implications for income and wealth inequality and intergenerational inequality’.

We warmly invite academics and experts to contribute to this year’s Budget Forum. We welcome articles that reflect on the current state of Australia’s tax and transfer system, as well as analyses on tax and transfer measures announced or highlighted in the Budget. We also encourage articles on measures that, in your view, the Budget should have included but did not.

Our usual Austaxpolicy articles range from 800 to 1200 words, but we would be happy to accept shorter posts for the Budget Forum. Authors should explain technical terms and avoid jargon and acronyms as far as possible. Analysis, statistics and data should be supported with appropriate sources provided as hyperlinks, rather than references. Assuming there is no duplication, we would be happy to consider multiple articles that take different approaches to the same topic.

If you are interested in contributing, or you are writing an article on the Budget for another outlet and are interested in co-publishing with us, please email us at [email protected] by 18 May with your brief proposal. Alternatively, send us your completed article any time in May. We are happy to accept pieces both before and after the Budget. Please kindly include ‘Budget Forum’ in the email subject line, so that we can ensure a quick turnaround.

We plan to kickstart this year’s Budget Forum a week before the Budget is handed down on 12 May. Keep up to date on Austaxpolicy's website:

Dear Austaxpolicy contributors and friends, The highly anticipated 2026-27 Federal Budget will be delivered by the Treasurer on Tuesday, 12 May 2026. As in previous… Read More ›

30/04/2026

Tax thresholds are often designed with good intentions, but they can come with hidden costs.

By creating abrupt jumps in effective tax rates, tax thresholds can reduce economic efficiency and introduce what economists call “deadweight loss.”

In this new blog post, Janine Dixon and Jason Nassios explore how corporate tax thresholds influence firm behaviour. Their research shows that firms near the threshold are incentivised to scale back production to avoid higher tax rates.

Their modelling finds that these thresholds increase production costs by around 0.07% on average, adding up to an estimated A$1.7 billion in economy-wide efficiency losses.

While the analysis focuses on corporate tax, the same underlying issue appears across Australia’s tax system - from payroll tax to property tax. It’s a reminder that how we design tax thresholds can matter just as much as the rates themselves.

Read the full analysis here:

Tax thresholds are everywhere in Australia’s tax system. They often seem well intentioned—simplifying administration or shielding smaller businesses from complex tax obligations. But thresholds also… Read More ›