Nearly 50% of the capital gains tax discount went to just 24,000 people who earned over $1 million in 2022-23, according to a new Oxfam Australia report, as the anti-poverty organisation calls on the Australian government to better tax wealth and end unfair tax discounts.
On average, each of these individuals gained a staggering $271,000 from the capital gains tax discount on profits from the sale of asset and investment, almost 1,500 times the benefit received by an average worker. If the government scrapped the capital gains discount, it could restore around $22.7 billion to the budget per year.
Addressing our growing inequality and better taxing wealth has popular support in Australia, according to new polling from Oxfam Australia. Commissioned by YouGov, the polling found:
- 73% of Australians are concerned about the growing gap in wealth and income between most Australians and the super-rich
- 72% of Australian voters would support the introduction of a wealth tax on billionaires and the super-rich
- 68% of Australians also support the additional revenue raised by a wealth tax being invested in poverty-reducing measures such as public and affordable housing and increasing income support.
These findings are consistent with results from another Oxfam Australia poll in 2024, indicating sustained support as inequality in Australia runs rampant.
Oxfam Australia Acting Chief Executive, Dr. Chrisanta Muli, says these findings are evidence that our tax system is deepening the inequality crisis and providing huge tax discounts to the wealthiest, while working Australians continue to pay their fair share.
"Our tax system is deepening inequality because it fails to tax wealth. For decades, Australia has been becoming a nation for the wealthy, not workers," said Dr. Muli.
"Today, billions of dollars in budget revenue is given away to the wealthiest in the form of tax discounts and because our tax system does not effectively tax the super-rich. Instead, it allows them to amass wealth and fund lavish lifestyles through untaxed growth in assets and investments. It's time we tax income from wealth like wages, and that starts by scrapping the 50% capital gains discount on profits from sales of investments," said Dr. Muli.
The report, The Elephant in the Room: Australia's failure to tax wealth, also presents new analysis showing what a wealth tax for Australia's richest could raise. According to Oxfam Australia, if Australia's 161 billionaires were taxed at a rate of 5% in 2025, this could have raised $33.5 billion alone.
The funds raised from a wealth tax could help end poverty in Australia. $33.5 billion per year is enough to raise income support payments above the poverty line, build 50,000 new social housing properties a year, and invest in better health and social services. It's also enough to scale up international aid to build a stable and prosperous region.
"Everywhere, people are feeling the squeeze from rising costs in housing, healthcare, childcare and transport. Yet while households struggle, our tax system allows unbridled wealth growth at the top and starves the budget of the revenue needed for quality public services. Wealth taxes and ending tax breaks that disproportionately benefit the rich are critical to funding health, housing, education and social security - the foundations of social cohesion and economic resilience," said Dr. Muli.
Oxfam Australia is proposing solutions that would ensure Australia better taxes wealth and ends unfair tax discounts that would unlock tens of billions to ensure budget sustainability now and into the future, including:
- End the capital gains discount for individuals and trusts and tax capital gains like income from work.
- Introduce a net wealth tax on the richest 0.5% of households with rates increasing in accordance with increased wealth.
