During a recent parliamentary hearing, former Reserve Bank of Australia (RBA) governor Bernie Fraser highlighted the capital gains tax (CGT) discount as a significant factor contributing to housing affordability issues in Australia. He argued that scrapping this tax break would not only alleviate market pressures but also address growing inequalities accelerated by the current tax structure. Fraser's comments came amid a broader examination of housing supply and policy responses, involving experts and government agencies over a series of hearings.

Fraser expressed concerns about what he described as a "cartel" of vested interests in the property market, which includes politicians, homeowners, and investors who benefit from the CGT discount. This system, he believes, exacerbates issues related to housing supply and affordability, creating barriers for first-time buyers and low-income families seeking stable housing solutions. His call for reform seems timely as the Senate committee considers various options for change in relation to the capital gains tax in light of ongoing debates about economic equity and housing policy.

As the Senate committee hearings continue in Sydney, the government has left the door open for potential changes to the CGT in the upcoming May budget. Fraser's proposal to abolish the discount might gain traction if it resonates with the interests of the public and decision-makers facing pressure to improve housing accessibility. The outcome of these discussions could significantly influence future housing policy and taxation in Australia, highlighting the need for a balanced approach that addresses both economic growth and social equity.