Are we sleepwalking into a modern-day feudal system? One of Australia’s top tax experts warns that the skyrocketing value of housing is pushing the nation toward a future where your financial success hinges largely on whether your parents own property. This isn’t just a distant worry—it’s a trajectory we’re already on, according to Bob Breunig, director of the Australian National University’s Tax and Transfer Policy Institute. But here’s where it gets controversial: Breunig argues that while we’re not quite back to pre-French Revolution times, the growing wealth gap is alarmingly tied to property ownership, creating a divide that’s less about age and more about who holds assets within the same generation.
During a parliamentary committee hearing on capital gains tax, Breunig highlighted a stark reality: “If you’re young and your parents are wealthy, their assets will eventually be yours. The real inequality isn’t between generations—it’s between those who have assets and those who don’t.” This insight flips the common narrative on its head, challenging us to rethink how we frame the equality debate. Breunig’s influential 2025 report further underscores how Australia’s tax and transfer system has increasingly favored older generations, widening the wealth gap.
And this is the part most people miss: The goal of tax reform isn’t to penalize older Australians but to create a fairer system. As Breunig puts it, “We want a country where hard work and saving are rewarded, but the current system isn’t keeping pace with today’s realities.” For instance, while older generations were once synonymous with poverty, many are now asset-rich, yet the system still treats them as if they’re financially vulnerable. “We need to move beyond this outdated mindset and target assistance to those who truly need it,” he urges.
The Greens-led committee has zeroed in on the 50% capital gains tax discount, arguing it’s fueled the housing affordability crisis by steering speculative investment into residential property. Meanwhile, union leader Bill Kelty has called for bold reforms to address the growing alienation of younger generations. Breunig agrees that reducing investor tax breaks won’t single-handedly fix housing prices, but it’s a step in the right direction. However, he warns against grandfathering changes, as it would only deepen intergenerational inequity by denying younger Australians opportunities available to their elders.
Here’s the real kicker: Breunig identifies the “egregious undertaxation” of family homes and superannuation as the much bigger issue. But not everyone agrees. Former Reserve Bank governor Bernie Fraser argues for abolishing the capital gains tax discount, predicting a more significant impact on house prices than the commonly estimated 1-3% drop. Is he right, or is Breunig’s focus on broader tax reform the way forward? Let’s debate this in the comments—what do you think?
