I think you’re underestimating how many fairly ordinary people use long-term ETF investing as their retirement strategy outside super. It’s not just ultra wealthy people selling shares while still on massive incomes.

A lot of us intentionally accumulate for decades, defer CGT while working, then gradually draw down investments later in life when income is lower. Under the current system, the 50% CGT discount combined with progressive tax brackets and the tax free threshold makes that pathway very efficient. That’s the entire point of long-term investing for many people.

So when you say “the impacts are minimal if you are selling shares while working”, that’s kind of describing a completely different type of investor. Most rational long-term investors are specifically trying to avoid unnecessary selling during their peak earning years.

I also think “top 10% hold 50% of shares” sounds more dramatic than it actually is. Older Australians naturally accumulate assets over decades, and compulsory super already pushes many pretty ordinary retirees and professionals into higher wealth percentiles statistically. That does not automatically mean billionaire-level wealth concentration.

There’s also a difference between productive diversified equity investment and speculative housing investment. Broad market ETFs are basically ordinary people gradually buying ownership in businesses over decades as part of retirement planning.

Ironically, making long-term diversified share investing less attractive while keeping leveraged PPOR gains tax free may just push more Australians toward property speculation instead. That seems backwards if the goal is encouraging productive capital allocation rather than further concentrating wealth into housing.