Jim Chalmers has refused to spell out how the government will fix its so‑called ‘widow tax’ after he was repeatedly asked to clarify during a live TV interview.
The Treasurer was grilled about the matter by ABC Insiders host David Speers on Sunday, after the Albanese government came under fire earlier in the week over its changes to capital gains tax and negative gearing.
Under the legislation, the 50 per cent capital gains tax (CGT) discount will be scrapped, while negative gearing will be limited to newly constructed properties.
Existing investments will be grandfathered, ensuring current property owners are not affected by the changes, and can continue to enjoy the old benefits.
Senator David Pocock raised concerns the grandfathered exemptions would be lost if a person died, as the property could then be regarded as a new acquisition when transferred to the widow, meaning they would have to follow the tax changes.
The Albanese government vowed to amend legislation to fix the ‘widow tax’, which would also have affected divorcees, with Speers asking Chalmers on the weekend to elaborate on how the government would ensure the amendment is made.
‘We’ll make that clear in the legislation that follows,’ Chalmers said.
Speers pushed further, asking whether someone who loses a partner in the coming weeks would retain access to negative gearing.
The Treasurer was grilled about the the ‘widow tax’ by ABC Insiders host David Speers on Sunday
‘We’ve made it really clear that we’re going to address that concern,’ Chalmers replied.
‘I don’t want to pre-empt the outcome.’
He confirmed the current system treats such cases as a new acquisition but insisted the government would intervene.
‘The current tax system has arrangements which say that that is an acquisition,’ he said.
‘But we’ve said we’re going to change that.’
Despite those assurances, Chalmers stopped short of clarifying what applies in the meantime.
‘Nobody has to stop negatively gearing until July 1, 2027,’ he said.
‘I’m not going to provide advice to individuals.’
Chalmers (pictured) said the government would change the ‘widow tax’ in further legislation
Join the discussion
Should families risk financial uncertainty while the government delays details on the so-called widow tax?
Speers noted the lack of clarity for Australians making immediate financial decisions.
‘They hear you say you’ll address it, but they don’t hear you say how,’ he said.
‘We will address it, if you prefer, we will fix it, and we’ll make clear how in subsequent legislation,’ Chalmers said.
Speers questioned why the government rushed the legislation through Parliament in just six weeks, despite the measures not taking effect until July 2027.
Chalmers defended the approach as necessary to provide certainty.
‘We’re very grateful for the support of the Parliament, David, because it means that we’re cutting taxes for workers, making it easier for first home buyers, and making the tax system fairer,’ he said.
‘It’s not unusual for the core elements of big tax reform to be legislated first.’
‘Our objective here was to provide certainty for investors and others about the core elements of this tax package,’ he added.
‘We’ve legislated the core elements quickly because we want to provide that level of certainty.’
