Australian investors are tipped to pour billions into blue‑chip shares and ETFs after sweeping capital gains tax changes unveiled in Tuesday night's Budget - shifts set to make stocks more attractive than property and trusts.

Treasurer Jim Chalmers said the overhaul was aimed at delivering a 'fairer tax system for workers, first home buyers and future generations' in what he described as one of the most significant tax reform packages in decades.

Under the changes, the 50 per cent capital gains tax discount will be scrapped and replaced with an inflation-indexation system, applying across all asset classes, including shares and property.

At the same time, investment properties purchased after 7.30pm on May 12, 2026 will lose access to negative gearing from July 1, 2027, except for new builds. Existing properties will not be affected.

Stockspot founder Chris Brycki said ETFs, super and dividend‑paying blue‑chip stocks were set to surge, with gold and Bitcoin likely to fall out of favour. 

'Companies like BHP, Telstra and Commonwealth Bank generate a larger proportion of investor returns through dividend income rather than long term capital growth,' he wrote on his blog on Tuesday night. 

'If capital gains become more heavily taxed, investors may place greater value on reliable income streams and franking credits.'

Franking credits mean companies pay tax on profits before distributing dividends, with shareholders receiving a credit so the same income is not taxed twice.

Mr Brycki said for long‑term investors, the bigger issue at hand was not just higher tax rates but the impact on compounding.

'Even relatively small increases in tax drag compound significantly over time,' he said.

'The projected differences can become substantial over long periods... for younger Australians still building wealth, those differences matter enormously.

'An ETF investor growing $100k over 10 years could end up with around $26k less after-tax. A property investor could lose more than $50k in after tax wealth.'

As a result, Mr Brycki said superannuation could become significantly more attractive relative to investing outside the system, given its concessional tax settings. 

That, he warned, meant older Australians with larger super balances could be less impacted than younger Australians building wealth outside super would take the hit. 

But not all economists were convinced.

UNSW finance professor Peter Swan said it was by far the 'worst' budget he had seen, saying it was hard to identify any winners. 

However, he said it was 'fortunate' the Budget had retained franking credits. 

'It's hard to find any winners other than perhaps existing home owners. The $78billion in additional tax revenue will be spent, making inflation worse,' he told the Daily Mail.

AMP economist Shane Oliver said while targeting overly generous tax concessions was justified, the changes were little more than a tax hike that risked discouraging work and investment.

He said the system already leaned heavily on high earners and the measures would push it further in that direction.

Mr Oliver said while asset income may be taxed less than wages, the better solution would be to cut Australia's relatively high income tax rates.

'They have done nothing to ease Australia's high reliance on income tax and will further add to the already very progressive nature of the tax system,' he said.

'The top 5 per cent of taxpayers pay 32 per cent of income tax collected and the top 10 per cent pay nearly 50 per cent.'