21/08/2026
Interesting session regarding the tax and investment implications of the Federal Budget last night, hosted by NAB Private Wealth and featuring Tom Piotrowski, Mark Jones from PwC and Rachel Goodwin from BlackRock.
Key takeaways included:
• Replacing the 50% CGT discount with indexation could work better for some investments held over multiple decades, but will likely be far worse for many shorter-term and high-growth investments.
• PwC essentially agreed that the Government’s stated policy intent for the trust reforms and the likely real-world implications are at opposite ends of the spectrum. That was fairly obvious to anyone with half a brain—which apparently excludes the people designing the policy. The potential double taxation of corporate beneficiaries and loss of franking credits are massive unresolved problems.
• As we have been telling clients, the States are not simply going to forgo stamp duty revenue when people restructure entities. The Federal Government can offer rollover relief from income tax and CGT, but if changing a property-owning structure still triggers stamp duty, that relief may be largely useless.
This creates enormous uncertainty. Do you restructure, do nothing or completely change how you invest moving forward? Depending on the result of the next election, parts of this could also be wound back before anyone really knows where they stand. There is currently no clear basis on which to make major long-term structuring decisions.
• The expectation is that the ATO will continue tightening definitions and collecting everything it possibly can to help fund the Government’s reckless spending and growing deficits. Rather than seriously dealing with the spending problem, the answer seems to be finding increasingly creative ways to extract more money from the productive part of the economy.
• BlackRock’s comments around income-producing investments were also interesting. Investors are increasingly looking beyond pure growth and placing more importance on reliable income. With parts of the bond market now offering competitive yields, bond ETFs are becoming a much more relevant and accessible option.
• Both PwC and BlackRock have seen a sharp and immediate response to the SMSF borrowing changes, with SMSF capital moving away from residential property and towards equities, ETFs and bonds.
The obvious consequence is that less investment capital will be available to fund rental housing. That means fewer rental properties and, almost certainly, further upward pressure on rents. It isn’t particularly complicated.
Interestingly, neither had seen any meaningful shift towards commercial property, despite it being considerably less affected by the Government’s changes.
Overall, it is difficult to see these reforms as anything other than a major negative for investment and the broader Australian economy. They distort capital allocation, make long-term structuring almost impossible and discourage people from investing in the assets the country actually needs.
Perhaps the most concerning takeaway was the sentiment in the room. A lot of people appear to be genuinely looking for alternative places to invest and grow their wealth.
Capital is mobile. If Australia keeps making itself a worse place to invest, build businesses and hold wealth, that capital will eventually find a better home elsewhere.
That is a very worrying long-term prospect for the country.
