CPA calls for multi-pronged approach to housing affordability

CPA Australia emphasised that housing affordability could not rely on quick fixes and stressed that reforms must be whole-of-system and carefully designed. It added that small changes could impact investment, housing markets, and overall economic confidence.

During Senate estimates, CPA Australia tax lead Jenny Wong (pictured) said housing market issues go back to the insufficient home building.

Wong called housing affordability a serious national issue, arguing that tax policy is not a standalone solution. "Changes to tax settings should go hand‑in‑hand with practical measures to lift housing supply, boost construction capacity and speed up planning systems,” she said.

Recent evidence to parliament showed that CGT and negative gearing operate as part of a broader set of interacting tax rules and incentives, Wong said.

“CGT and negative gearing are part of a bigger tax ecosystem – tweak one lever on its own, and you risk pushing further pressure into the rental market or distorting investment decisions,” she said.

The body noted that the broader principle of deducting losses has been part of Australia’s tax system for many years and highlighted the need for careful consideration before redesign.

“Many Australians use a mix of assets to build long-term financial security, including investments held outside superannuation,” Wong said.

“Any reform should prioritise stability, integrity and transitional fairness, and avoid settings that unintentionally advantage those with access to sophisticated structures.”

“Australia’s future prosperity depends on encouraging domestic investment, not concentrating the benefits among foreign investors, super funds, or those who can structure their affairs through tax-effective vehicles.”

Wong said Australians’ hard-earned savings should not be undermined by fragmented or short-term tax changes.

The body expressed opposition to changes that may unwind the CGT discount and negative gearing in the absence of a comprehensive plan and appropriate arrangements for the transition. It encouraged the government to work closely with the tax profession, the business community, and independent experts, and to align any changes with the nation’s long-term economic and fiscal objectives.

Wong said, “Australians need certainty. Reform must be proportionate, well-designed and aligned with long-term economic and fiscal sustainability – not short-term, fragmented changes"