Luxury Escapes co-founder and CEO Adam Schwab has slammed the federal budget for the impact it has on young people in Australia.
“This is the worst budget, certainly of my lifetime and possibly ever delivered in Australia,” he told Travel Weekly.
Schwab was particularly critical of the government’s changes to negative gearing – a tax concession that allows property investors to offset rental losses against their taxable income. The budget removes the concession for newly purchased investment properties while preserving it for those already held, meaning existing landlords continue to benefit while first-time investors lose the incentive, further suppressing housing supply and pushing prices higher for younger Australians trying to enter the market.
“It’s a budget that purports to be good for young people but it’s nothing of the sort. It actually drops a massive intergenerational debt bomb on anyone aged under 45. The decision to remove negative gearing and keep it for established properties means that rich people remain rich and young people will remain poor.”
He was equally critical of the government’s leadership, describing both the Treasurer and Finance Minister as failing to grasp the consequences of their decisions.
For the travel industry, however, Schwab sees limited immediate fallout. Australia’s outbound market is disproportionately driven by older, higher-income travellers – the demographic that stands to benefit most from the budget – meaning near-term demand is unlikely to soften.
“In the short term, this has minimum impact on travel, because it benefits older, richer people – they will continue to travel and that’s who is generally fuelling Australia’s outbound travel sector for all retailers,” he said.
But he warned the damage would compound.
“In the long term, this is going to be a destructive budget for all Australians, but especially young Australians.”
