The Albanese government has pointed to its “fairness” agenda in response to new analysis showing the income tax burden has reached the highest level since the 1980s.
Assistant Treasurer Daniel Mulino said tax policy needed to be viewed in the “broader context” as the personal income tax take hits 12.57 per cent of GDP.
Fresh analysis released by The Daily Telegraph on Sunday revealed the tax take was the highest since 1988-1989 under former prime minister Paul Keating.
“I think you always need to look at tax in the broader context,” Mr Mulino told Sky News Sunday Agenda in response to the report.
“I think we’re going need to look at this budget in the context of what this government has implemented across its term.”
He pointed to the Albanese government’s $5 per week tax cuts, announced in the 2025 federal budget.
However, the government has since drafted policies to increase the tax burden, including changes to negative gearing, capital gains discounts and family trust breaks.
Prime Minister Anthony Albanese previously ruled out such tax changes ahead of the 2025 federal election.
Mr Mulino argued that voters expected governments to “look at new policy ideas” when asked how he could justify making changes the public did not vote on.
“People want governments to have an agenda where they’re willing to look at new policy ideas based on the nation’s longer-term challenges,” he said.
“I think two of those challenges are the need to deal with intergenerational fairness and the need boost longer-term productivity growth.”
The latest indications suggest the government will move to restrict negative gearing to new properties, while grandfathering existing investments.
Existing owners would be shielded from changes but future investors would no longer be able to deduct losses on established properties, under such an arrangement.
At the same time, the government appears ready to overhaul capital gains tax, replacing the 50 per cent discount with an inflation-adjusted indexation model on real gains.
Sources have also told Sky News that a tax on family trusts – used by higher-income households to minimise tax – remains under consideration.
While a final decision has not been confirmed, expectations within government circles are that such a measure will be included.
According to the analysis by Deloitte Access Economics, the tax the burden is likely to continue rising in coming years as revenue growth outpaces the broader economy.
The report also projected total personal income tax receipts could climb to about $430 billion by 2028–29.
The Albanese government will hand down the federal budget on May 12.