Election Analysis - Week Three
Fault lines are emerging on tax and housing after the prime minister’s gaffe over tax reform, which means labor is unlikely to win a majority in its own right. by David Hughes.
First published in the AFR
On Wednesday night, a split-second decision from the Prime Minister may create a splitting headache for the remainder of the campaign.
The memory of Labor’s failed 2019 campaign—sunk by an ambitious tax agenda—still looms large. Since then, Anthony Albanese has run a small-target strategy, designed to minimise political risk. But this week, the internal contradictions of Labor’s platform began to surface. The party’s long-standing philosophical objection to investment tax concessions is increasingly difficult to suppress, and the cracks are starting to show.
During the second leaders' debate, the Prime Minister was asked about modelling commissioned by his government into changes to negative gearing and capital gains tax. He flatly denied its existence—despite having confirmed its existence in September 2024, after this masthead and others broke the story.
Whether a calculated deflection or a genuine oversight, the result was the same: it fed into growing public suspicion that Labor has a hidden tax agenda. If negative gearing is quietly back on the table, voters are entitled to ask: what’s next?
Treasurer Jim Chalmers—normally one of the government’s more disciplined communicators—was left splitting hairs over whether Treasury had provided ‘modelling’ or ‘advice’. It was a gift for Peter Dutton, landing just as early voting is set to begin on Tuesday.
Insiders in both major parties quietly concede that Labor is unlikely to win a majority in its own right. If Albanese is to cling to power, it will be with the support of the Greens and crossbench—whose price will be high and likely payable in changes to tax policies.
On Thursday, the Greens released costings on their proposed changes to negative gearing and capital gains concessions: a hit to investors worth $15 billion per year. These figures now give Dutton something solid to work with.
Tax is not the only vulnerability. Following Sunday’s campaign launches, Dutton also has fertile ground to contrast the parties on housing policy.
The Coalition has put forward a practical plan: allow first home buyers to access their superannuation to help with a deposit and to make mortgage repayments tax-deductible for first home buyers. Labor, by contrast, has offered a headline in search of a policy.
Labor’s centrepiece—$10 billion to deliver 100,000 homes—collapses under scrutiny. That amounts to $100,000 per home, when the ABS says the average cost to build is over $450,000. And only $2 billion of the fund consists of grants, with the remaining $8 billion in low-interest loans to states that can already borrow on their own.
Of the $2 billion in grants, just $600 million is committed over the next four years. At a cost of $450,000 per dwelling, that funds 335 homes per year—roughly two per electorate.
With fault lines now emerging on both tax and housing, the Easter break offers Albanese a much-needed pause to regroup. But it also marks a shift in momentum—one that may be harder to reverse than he anticipates.