The real issue is to focus on housing supply - not messing around with capital gains and negative gearing

The budget has been around negative gearing and capital gains tax and raises a bigger question:

Is the government trying to solve a housing tax problem… (and going for a money grab ) or a housing supply problem?

Australia still appears to have a structural housing supply issue.

Population growth continues while housing construction struggles to keep up. That imbalance alone creates long-term upward pressure on prices.

The real drivers of rising property prices are broader:

• supply shortages

• access to finance

• population growth

• wage growth over time

• and confidence in Australian property as a long-term store of wealth.

Property is no longer just shelter.

For many Australians, it has become the country’s largest wealth creation system.

The proposed changes to negative gearing and capital gains tax appear focused on reducing investor demand and increasing government revenue — with Treasury forecasting around $40 billion raised over a decade.

But unless there is a meaningful increase in housing supply through:

• faster planning approvals

• infrastructure investment

• improved construction productivity

• and more homes being built

The government’s left a window open to incentivise new builds

….will affordability materially improve?

There are also broader economic implications.

Many people increasingly feel there are very few incentives to create, take risks, invest, or build wealth. A number of people have raised concerns about what this could mean for the middle class, entrepreneurship, and long-term wealth creation in Australia.

For many Australians, the strategy had become:

rent where you live while investing elsewhere to build capital growth and eventually enter the property market. 

With current property prices and these proposed changes, that pathway now feels significantly harder.

Interestingly, there appear to be no major changes to superannuation, potentially making super an even more attractive long-term investment vehicle relative to other forms of investment.

The age old adage rings true -  where incentives goes money flows - let us see !

Interested in other views.