Budget to overhaul negative gearing, CGT discount, family trusts

Reports suggest the government is planning to curb negative gearing, overhaul the capital gains tax discount and impose new tax rules on family trusts when Treasurer Jim Chalmers hands down the Federal Budget next week.

While nothing has been confirmed, and Treasury has yet to respond to Financial Standard's inquiries, multiple media outlets suggest the changes will be unveiled as the government focuses on Budget reform.

When asked about potential changes to negative gearing at a press conference in Canberra, Chalmers said there are genuine intergenerational concerns and pressures on the Budget, tax system and housing market the government seeks to address.

"A government like ours, a responsible government, cannot ignore the very real pressures and concerns that people have in our communities," Chalmers said.

"I think the intergenerational pressures are really serious. We recognise and respect the really big contribution that older Australians have made and continue to make to our country and to our economy. But a lot of Australians, and particularly younger Australians, are finding it really difficult to get into the housing market. That's not the fault of older Australians. It's the fault of successive Coalition governments who didn't take housing seriously enough.

"What we are thinking through as we finalise this Budget is not about, and never will be about, setting some Australians against other Australians. It's about recognising some of these legitimate intergenerational concerns which, in my experience, are often shared by older Australians as well."

Chalmers said the Budget will be "ambitious" and consider the real pressures and concerns broadly shared around the Australian community.

"Recognising that the first year was a year of delivery and the Budget will begin a year of more ambitious reform," Chalmers said.

Chalmers confirmed the Budget will include a productivity package and a tax reform package but did not delve into the details.

"The election began a year of delivery and the Budget will begin a year of more ambitious reform. Reform, which is made more, not less urgent, by global inflation and global economic uncertainty," he said.

"The Budget will be calibrated for the conditions, but it will also still be consistent with our ambitions. As you've seen in the year since the election, at the reform roundtable and subsequently, some of the themes of the Budget will be very familiar to you."