As Australia looks to the federal elections – either by year’s end, or early next year – a remarkable transformation in political landscape is unfolding. Prime Minister Anthony Albanese’s recent support for reconsidering the stage 3 tax cuts reflects changing public sentiment, particularly among younger voters. Now, millennials and Gen Z have become the most active voting block. Their increasing clout is sure to reshape political calculus and propel change.
For almost as long, Albanese dug in his heels and refused to amend the unpopular stage 3 tax cuts. These cuts were always more in the interest of higher-income earners. Advocacy to address economic equity and social justice exploded into the public discourse. In response, he changed his tune and began calling for reconsidering these cuts. This sudden reversal of position caused an uproar. Opposition leader Peter Dutton accused Albanese of lying when he ruled out repealing those tax cuts.
Public Opinion and Political Pressure
Albanese’s reluctant agreement to reconsider the stage 3 private tax cuts is the result of months of conversations with the public. Too often these citizens are successful in unearthing problems with economic disenfranchisement. They’re particularly concerned about the increasing cost of living pressures that disproportionately affect younger generations. This change is a reflection of the federal government’s increasing recognition of these issues. Yet, they pretty clearly know that solving them is key to breaking through and reaching the electorate.
Dutton, however, remains skeptical of Albanese’s motivations. He called out the Prime Minister for having a “problem with the truth.” This strange accusation was the Treasury’s reaction to receiving advice on negative gearing reform. Dutton’s criticism shows how fierce this battle is going to get over tax incentives, including the framing of support between different social constituencies.
…as Treasurer Jim Chalmers has often admitted, when he asked for advice from Treasury on this. Instead, he’s taking time to think about possible reforms to negative gearing and capital gains tax after these recent developments. This inquiry signals an openness within the government to reassess long-standing policies that may no longer reflect the current economic climate.
Generational Influence on Electoral Dynamics
This generational shift in Australia’s electorate is critical to understanding the present political moment. Voter registration Brits aged 18-29 represented just 26 percent of the electoral roll in 2019. At the same time, Baby Boomers and older Australians had enormous cultural and political power. Going forward, the 2019 election was a tipping point. It was the last election when voting patterns were heavily dominated by Baby Boomers.
Fast forward to 2025, and projections indicate that Millennials and Gen Z will be the largest cohort of voters. Together, they will eclipse Baby Boomers by a large margin. By that time, Baby Boomers will be a mere 27 percent of the electoral roll. This demographic transformation is poised to reshape policies and priorities as younger voters increasingly demand action on issues such as climate change, housing affordability, and economic fairness.
As Kos Samaras, director at Redbridge, told us, these elections showed dramatic generational shifts between the two election cycles. The changing landscape necessitates that political parties adapt their platforms to better align with the values and concerns of younger voters.
Calls for Reform and Resistance
Given all these developments, the debate over negative gearing reform has really taken off. Labor leaders have already taken some ambitious steps to propose substantial reforms. Former opposition leader Bill Shorten was in the vanguard with his negative gearing reforms in 2016. These proposals saw massive citizen outcry and were rejected in the end.
Sally McManus, secretary of the Australian Council of Trade Unions (ACTU), has recently opined on this topic. She recommended that existing negative gearing agreements be grandfathered for five years, allowing reforms to take effect. McManus stressed that beyond this period, stakeholders need to face some hard truths about the tradeoff between housing affordability and investment behavior.
Calls for reform have been echoed by nearly everyone, from the International Association of Firefighters labor union to progressive activist organizations. Opposition is still deep in some political quarters. Proponents claim that altering negative gearing will reduce investment in the housing markets and increase the current burdens they face. This tension highlights the reality of creating policy that attempts to foster economic development while addressing social equity.
