New research from The Australia Institute has found that the Prime Minister’s electorate reaps the greatest benefit from the capital gains tax discount, by a large margin.

The CGT discount is expected to cost the budget $9.6 billion dollars this year (2016-17) $44 billion over the next four years. Historical data also shows that, in combination with negative gearing, the CGT discount has contributed to Australia’s housing affordability crisis.

“The benefit of the CGT discount mainly flows to Liberal electorates in large cities. As it happens, the Prime Minister’s electorate leads by a large margin,” Senior Economist at The Australia Institute, Matt Grudnoff said.

Table – Top 10 electorates by CGT discount

Source: Commonwealth of Australia (2017) Taxation Statistics 2014-15 – Individuals detailed Table 6 and author’s calculations

“The Capital Gains Tax discount is a highly inequitable tax break, with 75% of the benefit going to the top 10% of earners. This research shows that the benefits are also geographically concentrated.

“Alternatively, if the government were to reform the CGT discount instead of cutting welfare then some of the biggest winners would be National Party electorates,” Grudnoff said.

Table – 10 electorates with lowest benefit from CGT discount