Budget tax changes struggle for voter support (Phillip Coorey)

Changes to negative gearing, capital gains tax and the taxation of trusts were the least popular measures in the federal budget, according to new research that finds a majority of voters believe the government should try to cut spending instead.

The release of the post-budget analysis, conducted by JWS Research, came as the opposition hardened its threat to delay the passage of legislation to cut $37.8 billion from the NDIS, unless the government agreed to a rigorous Senate inquiry into the budget tax changes.

The government wants to push a bill through parliament by July 2 to enshrine the CGT and negative gearing measures, as well as the tax cuts they will fund – a standard $1000 tax deduction and the $250-a-year Working Australians Tax offset to be paid from 2027-28 onwards.

Opposition manager of business in the Senate Jonno Duniam said given the CGT and negative gearing changes did not begin until July 1, 2027, there was no need to rush them through, other than “they just want it gone”.

“All we are asking is for the Senate, the parliament, to do its job,” he said.

If not, the Coalition, which supports paring back the NDIS to keep it sustainable, is threatening to delay the legislation beyond the start of the new financial year, a move that could erode the planned savings.

The post-budget analysis conducted by JWS Research as part of its quarterly True Issues survey finds that out of 14 signature measures in the budget, negative gearing, CGT and trusts respectively fill out the bottom three in terms of voter support.

The most popular measures are the $25 billion in extra spending for public hospitals over the next four years, the additional funding for 5000 more aged care beds, which is funded by abolishing the private heath rebate for over-65s, and extending for two more years the ban on foreign investors buying existing homes.

The research was based on a survey of 1000 voters between May 15 and May 17. The budget was handed down on May 12 and two nights later, in his official reply, Opposition Leader Angus Taylor proposed indexing the tax thresholds to inflation.

That measure, which would cost $35 billion in just its first four years, had 60 per cent support while just 9 per cent were opposed.

As for the budget, the least popular measure was replacing the 50 per cent CGT discount with a less generous version – the pre-1999 model under which the discount was indexed to inflation over the life of the asset, to ensure only above-inflation gains were taxed. The key differences are that there will be no five-year averaging and a minium 30 per cent rate will apply to real gains,

The survey found 36 per cent supported this and 36 were opposed, giving it a net support rating of zero.

The next least popular measure was the limiting of future negative gearing to new properties bought after budget night. This had a net approval of 7 per cent.

Languishing in third last place, with a net support of 10 per cent, was the imposition of a minimum 30 per cent tax rate on discretionary trusts.

These low levels of approval contrast, for example, with the net 79 per cent support for the hospital funding.

Even among younger voters, who the tax increases were intended to please, there were low levels of support for the measures that were designed to improve housing affordability.

For example, among 18-to-34-year-olds, just 36 per cent supported the negative gearing changes and 40 per cent backed the CGT changes.

Similarly, among 35- to 54-year-olds, 38 per cent supported negative gearing changes and 35 per cent supported the CGT increase.

Support among Labor and Greens voters outranked that of Coalition and One Nation voters by a ratio of almost three to one.

The research also found 59 per cent preferred the government cut spending rather than raise revenue (21 per cent) to meet ongoing needs.

There was, however, support for the government breaking promises on CGT, trusts and negative gearing. The poll found 50 per cent believed it was OK to break a promise if it was a “tough decision in the national interest” while 37 per cent said it was better to stick to election promises, even if that meant delaying such decisions.

Former treasurer Joe Hockey on Tuesday said he supported abolishing negative gearing for established properties, but he thought Labor’s changes to the CGT discount were a mistake, warning the policy would crush innovation.

He said the difference between his controversial budget in 2014 and the Albanese government’s most recent one was that his budget was aimed at reducing spending rather than increasing taxes.

“I had to [increase taxes] temporarily, but you can’t keep increasing taxes because at the end of the day, you are crushing innovation, and the only way to survive rapid change in the world is domestic innovation,” Hockey said.

He warned the country was “sleepwalking into the future” and predicted the unemployment rate could increase to 15 per cent within five years as artificial intelligence and robotics put people out of work.

“The biggest losers are going to be young people, and whenever we get out of these problems, it’s because we innovate in response,” Hockey said.

“If you take away the incentive to innovate, you are crushing your ability to respond to the future.”

Hockey said Australia was nearly at the point where welfare payments exceeded total personal income tax revenue.

“If you look at the budget, and you say, ‘Hang on, what happens if we’ve got 15 per cent unemployment?’ Where’s the money going to come from to fund … our existing programs, let alone the new stuff that’s coming?” Hockey said.