In Magnum Force, Clint Eastwood delivers one of greatest lines in cinema history:

A man’s gotta know his limitations.

It is wisdom so simple that one can only marvel at the lengths Treasurer Jim Chalmers has gone to avoid absorbing it.

Chalmers is Australia’s Treasurer, a title that in his hands, carries roughly the same reassurance as finding out your pilot learned to fly on YouTube.

The Peter Principle holds that people rise until they reach their level of incompetence.

And now he wants to fiddle with the capital gains tax discount.

Treasury Secretary Jenny Wilkinson confirmed at Senate estimates this week that the department has been modelling changes to the 50 per cent CGT discount.

Fine. I am opposed but let us have the conversation.

(Disclosure – Spartacus does not own investment property and does not own any assets that would be eligible for the discount)

But here is the problem.

Independent modelling puts the likely house price impact of CGT changes at around 4 to 5 per cent nationally, with up to 8 per cent in Sydney and Melbourne. On a $900,000 Sydney home, that is $45,000 to $70,000 gone.

Which brings us to the government’s other policy masterstroke – the expanded 5 per cent home purchase deposit scheme, launched on 1 October 2025.

With income caps removed and no place limits, the government flung open the doors for first home buyers to enter the market at 95 per cent leverage, with the Commonwealth guaranteeing the gap so buyers could skip lenders’ mortgage insurance.

More than 21,000 buyers took the deal in the first months alone.

So let us join the dots.

The government ran a scheme to push buyers in at 5 per cent equity and is now floating a reform that its own modelling suggests could wipe that equity entirely.

A buyer who purchased last November with a 5 per cent deposit and faces a 5 per cent price fall has zero equity. A 6 per cent fall puts them underwater. And since the government is effectively the mortgage insurer for these buyers, it has potentially written itself a very large, very foreseeable claim.

This is not complex economics. It is the kind of policy collision that emerges when the person responsible for fiscal policy cannot see two moves ahead on the chessboard. Perhaps in Chalmers’ case, one move.

A man’s gotta know his limitations. The question is whether anything will finally teach Chalmers’ his.

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