Tax Expert Warns Australia's Housing Wealth Fuels Neo-Feudal Society Path
Bob Breunig, director of the Australian National University's Tax and Transfer Policy Institute, has issued a stark warning that Australia is heading towards a neo-feudal society, where an individual's prosperity is heavily influenced by whether their parents own property or land. This concern arises from the explosive growth in housing wealth, which is exacerbating inequality across the nation.
Inequality Within Generations, Not Between Them
Breunig emphasized that the real divide is not between young and old, as often portrayed, but between those with assets and those without within the same generation. 'If you are young and your parents have a lot of assets, those assets will eventually come to you,' he stated during parliamentary committee hearings on capital gains tax. 'So the real inequality is between people in the same generation, those who have assets and those who don't.'
He highlighted that framing the issue as intergenerational conflict misses the core problem, which centers on asset ownership and inheritance dynamics.
Tax System Lagging Behind Societal Changes
In May 2025, Breunig authored a report revealing how the tax and transfer system has become increasingly generous to older Australians over recent generations. He noted that while it's desirable for older people to be wealthy due to lifetime savings, current policies are outdated. 'It used to be that being old meant that you were poor, so we transfer money to older people simply because they are old. But many old people aren't poor anymore, yet we still treat them as if they were,' he explained.
Breunig called for reforms to target assistance more effectively to those in genuine need, moving beyond age-based assumptions.
Capital Gains Tax and Housing Affordability
The Greens-led parliamentary committee has focused on how the 50% capital gains tax discount worsens the housing affordability crisis by encouraging speculative investment in residential property. Breunig acknowledged that reducing such tax breaks might only slightly impact house prices or home ownership rates, but it would be a step in the right direction.
He cautioned against grandfathering changes to apply only to new investments, warning this could worsen intergenerational inequity by disadvantaging younger generations. 'That's because now you are taking away from the younger generation something the older generation have access to,' he said.
Broader Tax Issues and Expert Opinions
Breunig identified larger problems, such as the 'egregious undertaxation' on family homes and superannuation, which contribute to wealth disparities. Meanwhile, Bernie Fraser, former governor of the Reserve Bank, advocated for abolishing the capital gains tax discount entirely, predicting a more significant effect on house prices than the commonly estimated 1 to 3% decline.
Union leader Bill Kelty also urged the government to pursue ambitious reforms to address the alienation of younger generations, echoing concerns about systemic inequities.
As Australia grapples with these challenges, experts stress the need for comprehensive tax reform to prevent a slide into a society where wealth is increasingly determined by familial assets rather than individual merit.
