Politics Now Can tax reform fix Australia's housing crisis? | Insiders On Background
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Feb 27, 2026 Bernie Fraser, former Treasury Secretary and Reserve Bank Governor, brings decades of public policy and economic experience. He discusses how tax settings have pushed housing demand and whether negative gearing or the capital gains discount should change. He also highlights supply barriers like land and materials and argues tax tweaks must pair with supply measures.
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House Prices Outpaced Wages For Two Decades
- Australia's housing prices have risen about twice as fast as average earnings over the last ~20 years.
- Bernie Fraser links this gap to rising demand and limited supply, with tax-driven demand a major contributor.
Tax Breaks Turned Housing Into A Wealth Vehicle
- Negative gearing and the capital gains tax concession have made housing extremely attractive as a wealth investment.
- Fraser argues these tax settings incentivised purchases for wealth creation rather than expanding housing supply, pushing up prices.
Do Reduce Investor Tax Incentives Strongly
- Remove or substantially reduce tax incentives for property investment rather than make small, partial changes.
- Fraser recommends starting prospectively (no retrospective changes) and winding down attractiveness to wealthy investors.