Young Aussies are missing out on major tax concession benefits
Recent data released by The Australia Institute has revealed that young Australians aren’t seeing the benefits of three of the most expensive tax concessions, on negative gearing, capital gains and superannuation.
In total, the concessions are worth $37 billion, and yet the data showed that Australians under the age of 30 received around $2.4 billion - only 6.4% of the benefits. The capital gains tax discount and negative gearing - worth $7.7 billion a year and likely to rise - were the worst areas, with people under 30 receiving approximately 1% of benefits. Executive Director of The Australia Institute, Ben Oquist, called it “particularly unfair.”
“It is a double hit for the young with many being priced out of the home owning market in part because of the very tax concessions they are mostly missing out on,” he said.
Oquist acknowledged that tackling tax concessions is often politically difficult, but said that the reality is that Australia has a revenue problem, which is particularly detrimental to young Aussies and needs to be addressed.
“Tackling tax concessions will not just be good for the budget and fairness, we now know it will help level the playing field for the young who get little from our distorted tax system,” he said.
The bulk of tax concessions benefit a small number of the population, mainly in older generations. Oquist called this system into question, saying “The Government has made much of the importance of intergenerational equity, there is nothing equitable about retaining expensive tax concessions that deliver a fortune to wealthy members of certain generations and virtually nothing to younger generations.”
“A 2016 Budget that fails to recognise this will lack fiscal responsibility, economic credibility and fairness – particularly for younger Australians.”