Australian news and politics: Anthony Albanese rejects ‘death tax’ claims in Budget trusts overhaul

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Australian shares have started the week sharply lower, as oil prices surged on the ongoing Iran conflict and as inflation spurred fears global central banks will be forced to ratchet-up interest rates.

The S&P/ASX200 fell 110.1 points by midday, down 1.28 per cent, to 8,520.7, as the broader All Ordinaries slipped 118.9 points lower, or 1.41 per cent, to 8,745.8.

The slip came after Wall Street’s gravity-defying, record-breaking ran out of steam on Friday, wiping out the previous two session of gains as artificial intelligence hype and strong tech earnings collided with worsening inflation worries.

“Risk sentiment took a hit at the end of last week as nerves around the Middle East conflict and its inflationary consequences resurfaced,” Westpac economist Ryan Wells said.

“A global bond rout saw longer-dated yields jump to fresh highs across some jurisdictions, as markets now expect tighter monetary policy sooner.”

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Opposition leader Angus Taylor has accused Labor of rolling out a string of “rotten taxes” designed to “kill aspiration in this country”.

Speaking in Sydney on Monday, Mr Taylor said the Coalition would be fighting Labor’s taxes “every single day until they come into the parliament”.

“This budget is an absolute rotter. It’s an absolute stinker. And we’re going to be fighting against it every single day until the legislation comes through to the parliament,” Mr Taylor said.

“And if sadly, they do get through, we will be fighting to repeal them as we approach the next election.

“Against absolutely rotten taxes, taxes that are going to kill aspiration in this country. Taxes that mean Australians just can’t get ahead.”

The Liberal leader said he wanted to give young people trying to get into a home, investors, and small business owners a “fair go”.

“I believe the Australian people also believe in reward for effort, and so we’re going to be out there fighting for Australians every single day,” he said.

The Prime Minister has pivoted when asked if Labor would consider changing rules for young Australians wanting to use wealth growth avenues to build up to a home deposit.

In Adelaide on Monday, a journalist asked whether Anthony Albanese was open to changes for young people who feel punished by the changes to Capital Gains Tax and negative gearing.

The journalist asked: “Many young people have looked to the share market to try and help save for a deposit, or they will be reinvesting. Is your government open to tweaking those measures to ensure those people aren’t punished?”

Mr Albanese responded but pivoted from actually answering the core question to instead insist that Labor was “making sure that the tax system works for everyone”.

“What they will do when it comes to capital gains tax is to return to the pre 1999 position, which is to be taxed on real gains. That is better aligning income from work with income from assets,” the PM said.

Anthony Albanese has hit out at the “three right wing parties and their allies” for kicking up a scare campaign around the changes to trusts in the Federal Budget.

As the countries digests the Budget and how it will impact them, the Albanese Government has faced a string of questions around whether its targeting of new discretionary testamentary trusts was a “death tax”.

As the trusts are used as a key inheritance tool by families the Coalition have accused Labor of implementing a “death duty”.

Asked while in Adelaide on Monday, the PM hit back at the criticism.

“Well, the Coalition and their allies will say lots of things, and sometimes the allies will just repeat the lines coming from the Coalition, and that’s up to them,” he said.

“But what we have put forward very clearly is comprehensive policy.

“And of course, when it comes to trusts, if people want to continue the existing discretionary testamentary trusts, there’s no change, they can continue with fixed trusts.”

Prime Minister Anthony Albanese has brushed off suggestions he should apologise for broken promises on tax in last week’s budget as he continues to defend changes to negative gearing and capital gains.

Some data has suggested weekend auction clearance rates have fallen following Tuesday’s budget, as investors steer clear from property.

“We’ve changed our position and we’ve explained why,” Mr Albanese told reporters in Adelaide as he spruiks the controversial budget changes to help first-home buyers into the market.

“On Saturday we had young people trying to buy their own home with a roof over their head, not competing against someone who was an investor with the taxpayer providing them support.”

Treasurer Jim Chalmers has labelled critics of his Federal Budget “unhinged” as he and fellow Labor frontbenchers have defended growing concerns the Albanese government is trying to slap a “death tax” on Australians.

Federal ministers have faced a barrage of questions on proposed changes in Tuesday night’s Federal Budget, including why the new discretionary testamentary trusts weren’t excluded from the capital gains tax changes.

For everyday Australians, they are trying to understand why the Government will soon be slapping a minimum 30 per cent tax on certain trusts.

Labor frontbencher Tanya Plibersek refused to agree that the tax on testamentary discretionary trusts is a “death tax,” but has accepted the Budget move will hit families who try to shift their “money around”.

Appearing on Channel Seven’s Sunrise program, the Social Services Minister also suggested it was reasonable for trusts to be taxed if families were attempting to move their money around for tax minimisation purposes.

Ms Plibersek rejected suggestions the policy amounted to a “death tax”.

“Well, testamentary trusts are trusts that you set up to distribute money to your kids after you’ve died,” Ms Plibersek replied.

“You can either distribute that money in set shares to your children, or you can have someone else deciding that this kid gets more this year, this kid gets less this year.

“What we are saying is if the share is fixed, no change, that’s fine.

“If you are able to shift the money around, you might be doing that to minimise tax, so that is going to have the minimum 30 per cent tax.”

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Treasurer Jim Chalmers has faced multiple questions at a Brisbane press conference about why he didn’t exclude new discretionary testamentary trusts from the capital gains tax changes.

Despite much of the Budget being a “cut and paste” of Bill Shorten’s election platform in 2016 and 2019, Dr Chalmers included the particular trust in the changes on Tuesday night.

Dr Chalmers was the Shadow Minister for Finance at the 2019 election.

“I’m not revisiting the decisions that we took some time ago,” Dr Chalmers said in response to questions about his change of tune.

“My job is to make the right decisions on policy in 2026. Not to re-do the policy decisions taken in 2018 or 19 or whenever it was.”

Dr Chalmers on Monday confirmed that while fixed deceased estates, fixed trusts, and existing discretionary testamentary trusts were all exempt from the changes, newly established trusts are not.

Dr Chalmers said while he understood keeping the “busted status quo” would have been “politically easier to do”, he insisted it was about fixing intergenerational equity.

The Coalition has accused the Government of implementing a “death tax” or “death duty” on a system used by families to pass down assets to their loved ones.

Housing Minister Clare O’Neil admits many Australians see the housing system stacked against them after the Federal Government reached a deal with Queensland to build properties specifically for first-home buyers.

“Australians see a housing system stacked against them and we want to help them out,” she told reporters in Brisbane on Monday.

“We want them to get ahead, we want them to do it in a home of their own and our government is throwing everything at this challenge.

“Some big historic reforms that will level the playing field for first-home buyers and build more homes for our country.”

Under the deal with Queensland to build 51,000 homes, more than 20,000 will be reserved just for first-home buyers.

Treasurer Jim Chalmers has downplayed the impact his Federal Budget changes will have on Aussies under-35 who wanted to use wealth-building avenues to be able to buy a home.

Changes to negative gearing in the Budget he handed down on Tuesday are expected to make the strategy of renting in a preferred area while buying a cheaper property elsewhere less attractive.

Critics have also argued that targeting capital gains tax across all investments, including new shares and crypto, will limit wealth-growth opportunities for young people to work up a deposit.

Dr Chalmers didn’t directly answer when asked if he was “open to making changes in this area?”, instead insisting it wasn’t a pathway many under 35s were taking.

“When it comes to people under 35 with shares, we think about one in ten people have shares,” he said.

“What we’re doing is introducing a fairer, more neutral treatment.”

He has also claimed fewer than five per cent of Aussies under-35 were rent-vesting.