Tax Changes Could Worsen Housing Affordability: Palmer

United Australia Party Chairman Clive Palmer has criticised the Federal Government's proposed changes to capital gains tax arrangements, warning they could discourage investment, reduce housing supply and make it harder for younger Australians to build wealth.

Mr Palmer said much of the public debate surrounding the proposed reforms had failed to consider their broader economic consequences.

"There has been a lot of simplistic commentary around these proposals, but very little discussion about the long-term impact on investment, housing supply and economic growth," Mr Palmer said.

"For decades, Australians have built wealth by investing in productive assets such as property, businesses and shares. They have taken risks, sacrificed consumption and reinvested their earnings to create opportunities for themselves and their families."

Mr Palmer said while the proposed tax changes may appear modest at first glance, the practical effect could be a significant increase in the overall tax burden on long-term investment gains.

"What is being presented as a reasonable reform could, in many cases, substantially increase the tax ultimately paid by Australians who have spent years building investments," he said.

"The reality is that many investors will still be required to pay additional tax when those gains are distributed or used for personal purposes, resulting in a much higher effective tax burden than many people realise."

Mr Palmer said the changes would particularly affect younger Australians seeking to build wealth and enter the housing market.

"If you are a young Australian trying to get ahead, these policies reduce the reward for taking risks and investing for the future," he said.

"Younger generations are effectively being asked to accept lower returns than those available to previous generations while facing higher housing costs and greater economic uncertainty."

Mr Palmer said Australia needed policies that encouraged investment rather than discouraging it.

"At a time when Australia needs more housing, more development and more productive investment, the Government is sending the opposite signal," he said.

"Developers, investors and business owners need confidence that if they commit capital to projects, the returns will justify the risk."

Mr Palmer warned that reduced investment activity could have flow-on effects for housing affordability, employment and economic growth.

"Many projects only proceed because investors are prepared to commit capital," he said.

"If investment becomes less attractive, fewer developments will proceed and housing supply will become even more constrained."

Mr Palmer said concerns were particularly relevant in high-growth regions such as the Gold Coast, where rising construction costs, labour shortages and population growth were already placing pressure on housing availability.

"The answer to housing affordability is increasing supply, not discouraging investment," he said.

"The Government should be focused on ensuring housing supply keeps pace with demand and that immigration levels do not exceed available housing stock."

Mr Palmer also warned that changes to capital gains tax and negative gearing arrangements could further tighten rental markets.

"If investors withdraw from the market, rental supply will decline and rents will inevitably increase," he said.

"That will make it even harder for Australians to save for a home deposit and enter the property market."

Mr Palmer said the Government risked creating unintended consequences across the economy if it pursued tax reforms without addressing the underlying causes of housing affordability.

"We need a balanced conversation about aspiration, investment and productivity," he said.

"Punishing long-term investment without materially increasing housing supply risks making the problem worse, not better."