This month’s federal budget announced that the capital gains tax (CGT) regime would return to the pre-1999 indexation method. The change was marketed by the government as a way to improve tax efficiency and equity, as well as boost budget revenue.
The fact sheet accompanying the change states the following:
Returning to indexation based on the Consumer Price Index (CPI) aligns with the original intent of the CGT regime and supports productivity over time by ensuring that investment decisions are taken for economic reasons, not due to tax outcomes.
