Australians back hit to capital gains and negative gearing to pay for tax cuts

Australians want Jim Chalmers to reduce both the capital gains tax concession and negative gearing assistance, slash government spending by hacking into foreign aid and cut personal income tax.

An exclusive Resolve Political Monitor poll shows Chalmers has potentially strong political support to use his May budget to cut spending, with two-thirds of respondents backing reductions and just 8 per cent opposed.

But the poll of 1800 people conducted between February 8 and 14 shows voters want those savings to be channelled back to them as income tax cuts while they are also open to substantial tax reform – except for an increase in the GST.

Chalmers has signalled he will use the 2026-27 budget, forecast to show a deficit of $34.3 billion, to target inflation pressures, lift productivity and improve parts of the tax system.

Overnight, the International Monetary Fund urged Chalmers to embrace far-reaching tax reform including overhauling the CGT, cutting the company tax rate and increasing the GST.

Half of those surveyed back income tax cuts with just 11 per cent opposed. Support was strongest among high-income earners (58 per cent), Coalition voters (55 per cent), people with a job (57 per cent) and Labor supporters (51 per cent).

Given a range of possible options to help cover the cost of personal income tax cuts, two-thirds supported spending cuts, 58 per cent backed higher taxes on banks and 57 per cent wanted a lift in taxes on mining companies.

Forty per cent said they supported a reduction in the concessions on capital gains tax, with just 17 per cent opposed. Another 42 per cent said they were undecided or neutral, suggesting Chalmers could prosecute the case to reduce the concession that was introduced in 1999.

The Liberal Party has already said it will not support a change to the capital gains tax, with new leader Angus Taylor on Monday committing to income tax reductions.

“We will come forward with a strong, lower tax package that absolutely must be what we take to the next election,” he told the Centre for Independent Studies.

There was even stronger support to cut negative gearing concessions on investment properties. Seventeen per cent of respondents were opposed to negative gearing changes.

The only option opposed by most of those polled was an increase in the GST, with 54 per cent rejecting the idea compared to 18 per cent who backed the move.

Chalmers on Monday said the government did not support a change to the GST, but he would not rule out reforms to the CGT.

This masthead has revealed that a reduction in the CGT concession is being discussed as part of broader suite of measures, including a further cut to income tax.

The Treasurer said the government already had an “ambitious” tax agenda that included tax cuts due to start on July 1.

“That’s our focus when it comes to tax policy. We haven’t changed our policy – we’re rolling out those income tax cuts and the standard deduction and the boost to the low-income superannuation tax offset,” he said.

Almost 50 per cent of respondents said the government should focus on reducing spending to improve the budget bottom line. In the middle of last year, it was 41 per cent.

Paying for tax cuts would require lower government spending.

The Resolve poll showed 53 per cent of respondents backed a reduction in foreign aid. Strongest support was among One Nation voters (76 per cent), while both Coalition (54 per cent) and Labor supporters (49 per cent) backed the move.

The government expects to spend $4.2 billion this financial year on foreign aid in a budget with $785 billion in expenditure.

Foreign aid was the only option to have majority support from respondents.

There was support from 29 per cent of those questioned for reductions in the government’s $5 billion worth of renewable energy programs. Support was highest among One Nation voters (49 per cent) while it was just 13 per cent among Greens voters.

About one in five of all voters supported a cut to unemployment benefits, which will cost federal taxpayers more than $17 billion this year. The current Newstart payment is almost $400 a week compared to $540 for the age pension.

But support for cuts to some of the most expensive budget items was low. Just 5 per cent supported cuts to the age pension, which is the second-biggest budget line item, while only 16 per cent backed reductions in assistance to the states, which is the federal government’s largest expense.