Investor confidence rattled following Budget tax reform proposals: Survey

VanEck’s post-Budget survey found deep investor unease around the proposed capital gains tax changes, with almost 78% of respondents reacting negatively to the proposed retirement of the 50% capital gains tax discount. Nearly 60% of the 1400+ respondents described their reaction as strongly negative.

The findings arrive at a difficult moment for the economy. Productivity growth has slowed, private business investment remains weak and Australia has recorded fewer new business formations in recent years. At the same time, governments face growing pressure from stubborn inflation, higher debt-servicing costs and geopolitical tensions.

Treasurer Jim Chalmers has argued the Government’s reforms are intended to improve the long-term sustainability of the Budget while making the tax system fairer.

“We need to take these decisive steps, these contentious steps, to rebalance the tax system,” Chalmers told the ABC following the Budget announcement.

The response from investors suggests the changes have landed hardest among Australians who have spent decades building wealth through property, equities and private business investment.

“The most experienced cohort of investors in the country, people who have built wealth carefully over twenty, thirty, even forty years, has described the Budget as a structural attack on their planning,” Arian Neiron, CEO and Managing Director at VanEck Asia-Pacific, said.

“Three in four told us the changes to capital gains tax undermine the incentive to invest,” Neiron said.

More than 78% of respondents said Australia is now a less attractive place to start or build a private business than it was a year ago.

Over half of respondents said they plan to hold their current positions as the policy debate plays out, while more than one in four investors are considering realising gains before 1 July 2027 to preserve access to the current capital gains tax discount. Almost 22% are exploring restructuring strategies.

Chalmers acknowledged the measures were “difficult” but argued they were “necessary”.

The proposed changes are also reshaping where investors want to hold capital. Nearly half of respondents said superannuation is now the most tax-efficient investment structure going forward, reinforcing expectations that more capital may flow into super over coming years.

“The flight to superannuation is rational, but it is also revealing,” Neiron said. “That will likely result in Australians across every age cohort engaging more deliberately with their super and an accelerating shift toward SMSFs.”

Greater use of superannuation and self-managed super funds is also likely to change how investors access markets. As investors take more direct control over portfolio construction, demand tends to increase for low-cost, diversified investment vehicles that can be traded easily and managed efficiently. Exchange traded funds (ETFs) may be among the clearest beneficiaries.

Australia’s ETF industry has already benefited from the growing use of diversified listed investments in retirement portfolios. The proposed tax changes may reinforce that trend as investors place greater emphasis on tax efficiency, liquidity and portfolio flexibility.

ETFs offer investors efficient access to a wide range of strategies and asset classes, from core equity exposures through to income strategies, international markets and specialised thematic allocations. As more investors reassess concentrated exposure to residential property, listed investments that can be adjusted more easily within superannuation structures may become more attractive.

The shift may be particularly supportive for investors seeking more deliberate portfolio construction, greater diversification and more control over after-tax outcomes.

Residential investment property recorded the largest deterioration in sentiment of any asset class surveyed, with more than 81% of respondents describing it as less attractive following the Budget. Buying more than one home has long been one of Australia’s dominant vehicles for long-term capital accumulation. A sustained reassessment of its attractiveness would mark a significant change in investor behaviour.

Whether the proposed measures proceed in their current form remains uncertain. But many investors are already adjusting as though they will.

The VanEck Federal Budget Investor Survey was conducted between 19 and 20 May 2026 and attracted 1,421 completed responses from VanEck’s Australian investor community. The sample skews towards experienced investors, with 67.7% having invested for more than 20 years, and older cohorts, with 70% aged 55 and above.