Albanese concedes ‘difficult’ CGT overhaul as polls smash Labor

Good morning. Here’s what happened overnight and what you need to know today.

1.

Primary concern: Prime Minister Anthony Albanese conceded the government’s capital gains tax overhaul is “difficult” as multiple polls show Labor’s primary vote slumping and One Nation surging in the budget’s wake. The first national poll since the budget, conducted by strategic campaign agency Wolf+Smith for Amplify (the VC-backed lobby group founded by Paul Bassat, who has been a vocal critic of the CGT changes) found 51% of people are less likely to trust the government due to its tax changes. A post-budget Newspoll commissioned by The Australian with core budget questions asked over decades found 47% of voters believe the budget will be bad for the economy and just 22% believe it will be good. That’s a net approval rating of minus 25, the worst since the Keating government’s 1993 budget which scored minus 42. Meanwhile, a Resolve Political Monitor conducted for the Sydney Morning Herald found Labor’s primary vote fell 3 percentage points to 29%, while One Nation climbed to 24% and the Coalition sat steady at 23%. That poll also shows Angus Taylor edging ahead of Albanese as preferred prime minister, leading 33-30. Despite that, some of Labor’s most controversial measures are winning more support than opposition: 36% of Resolve respondents support removing the 50% CGT discount, with 21% opposed and 42% undecided. “This is a difficult reform, but it’s one that people have spoken about for a long period of time,” Albanese said. (Capital Brief)(SMH)(The Australian)

2.

Domino effect: Westpac and Macquarie have become the first big banks to adjust lending policies in response to the end of negative gearing on existing homes, as the federal budget begins to have an immediate impact on property investors. While both are yet to formalise their policies with brokers, Capital Brief confirmed the two institutions have stopped their lenders factoring in negative gearing on existing property purchases in line with the federal government’s new policy. “In light of the federal budget, we have made changes to our investor lending policy to ensure we continue to comply with our responsible lending obligations,” a Macquarie spokesperson told Capital Brief. Macquarie became the first mover among the big banks, revising borrowing limits on any loans where the contract of sale was executed after 12 May, with Westpac next, telling its home lenders of the change on Friday. NAB said the bank was still working through the details, with CBA and ANZ adopting similar positions. While all major lenders will be impacted, the larger retail banking franchises of CBA and Westpac are expected to be hardest hit, having gone hard after investor loans, which typically generate better returns and higher margins, but now leaving them more exposed to a slowdown. Real-life examples provided by brokers suggest investor budgets have been reduced by more than a third in some instances, with Jarden analyst Matt Wilson estimating a 25% reduction in new loans. “Banks are like dominos. If one moves, they will all likely follow, which could have a huge effect on investor applications,” refinance.com.au broker Aidan Hartley said, predicting a 30-40% reduction in investor activity overall. (Capital Brief)