SandonCapital

Treasury’s CGT modelling appears heavily dependent on assuming Australian shares only deliver ~4.3%-4.4% capital growth p.a., which seems to come from measuring the ASX/200 and All Odds over the last 20 years, a period the Treasurer keeps repeatedly describing as evidence that shares were supposedly “undertaxed” or “undercompensated” - including in this interview with @BilliFitzSimons But the only circumstance where inflation indexation actually benefits investors relative to the current 50% CGT discount is where inflation makes up more than 50% of total capital returns. That’s generally only true when capital growth itself is unusually low or it’s a market where a very high portion of the total return is paid in dividends (like Australian large caps). That’s not how most younger Australians invest today! Most younger investors build globally diversified ETF portfolios with significant global share market exposure. Across Stockspot clients, around 50% of share market exposure is global. As one example, Stockspot’s most popular diversified portfolio (Topaz), delivered 7.3% annual capital growth over the 10 years to the end of April 2026, despite having around 22% in defensive assets like bonds and gold. That massively changes the outcome under the proposed CGT system. Using: • $20k invested • 10 year holding period • 2.5% inflation • 30% tax rate At Treasury’s apparent 4.3% growth assumption: > current 50% discount tax = $1,571 > proposed new tax = $3,141 But at a more realistic globally diversified 7.3% growth assumption: > current 50% discount tax = $3,069 > proposed new tax = $6,138 i.e. the extra tax drag roughly doubles. You can use this CGT calculator to see this stockspot.com.au/cgt-calcula… That’s because the proposed inflation indexation plus 30% minimum tax model becomes increasingly punitive as long term capital growth rises. The higher the long term growth rate, the larger the portion of gains exceeding inflation, and the larger the compounding tax drag becomes over time. Which raises an important question... if the modelling omits global shares and other higher capital growth assets like crypto that younger Australians increasingly invest in, are the published examples materially understating the long term tax impact and presenting outcomes that aren’t representative of how people actually invest today?