A small number of high-income, Melbourne-based electorates benefit the most from capital gains tax (CGT) discount in Victoria, new ACOSS analysis shows.
The top four electorates in Victoria - Kooyong, Goldstein, Macnamara and Flinders - receive nearly 10% of national expenditure on the CGT discount, worth around $2.2 billion per year, based on analysis of the latest ATO, Treasury and ABS data.
In these electorates, where the combined average taxable income is $105,533, people receive an average capital gains tax break of $4,821. The electorate of Kooyong is the second-highest for the CGT discount benefit nationally after Sydney's Wentworth, receiving $1 billion annually at an average of $8,093 per person. This is more than five times the national average of $1,470.
Meanwhile, someone in Scullin in Melbourne's north, where the average taxable income is $60,786, receives an average CGT concession of just $365 per year. This is 22 times less than Kooyong.
ACOSS's analysis of all 150 federal electorates also shows the stark inequality across the country, with the CGT discount benefit flowing overwhelmingly to capital cities and mostly to eastern states. In Melbourne, the average CGT discount per person is $1,647 while the rest of Victoria averages $1,074 per person. Darwin averages $522 per person.
"It's clear this tax break funnels billions into the wealthiest parts of our cities and country at the expense of those doing it tough," said ACOSS CEO Dr Cassandra Goldie.
"This is money that could be invested in social housing, essential services, income support and the communities that need support the most. Instead, it's being used to supercharge inequality. That is not a fair or sensible use of public funds."
"When a policy so clearly supercharges inequality while driving up home prices, it simply must be in the national interest for urgent reform."
Read the ACOSS briefing note: The unfair distribution of the CGT discount by electorate. View the interactive map here.
Top electorates in Victoria by CGT discount benefit in 2022-23:
Kooyong: $1,004.0m total benefit / $8,093 per person
Macnamara: $478.5m total benefit / $3,764 per person
Goldstein: $443.4m total benefit / $3,866 per person
Chisholm: $318.1m total benefit / $2,501 per person
Flinders: $305.0m total benefit / $3,148 per person
Lowest-receiving electorates in 2022-23:
Holt : $56.5m total benefit / $523 per person
Lalor $46.4m total benefit / $388 per person
Scullin : $36.6m total benefit / $365 per person
ACOSS is calling on the Federal Government to:
Halve the 50% CGT discount progressively over 5 years
End negative gearing immediately for new investments, and phase it out over 5 years for existing investments
Invest the savings in essential supports and services, including social housing and income support
