ANALYSIS: When's the best time to break an election promise?

The government will be hoping it's when your political opponent is in a shambles and the national mood has changed significantly since a crushing election loss many blamed on the very reforms Labor is attempting once again.

Under this year's budget, the capital gains tax (CGT) discount and negative gearing have been wound back, ending longstanding and generous tax breaks that have been in place since 1999 and 1987, respectively.

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Prime Minister Anthony Albanese had refused to reform the two generous and popular benefits, repeatedly telling reporters during last year's election campaign that he would not tinker with the tax settings.

So what's changed?

Nine national affairs editor Andrew Probyn said this year's budget may have been the best time for Labor to break a key promise. 

"There are now many more younger voters than older voters and it's younger Australians who are finding it horribly hard to get into the housing market," he said.

"Politically, the Coalition is a diminished force.

"Perhaps there's never been a better time to break a rolled gold promise and get with it."

Treasurer Jim Chalmers has delivered on anticipated bold reforms in the face of rising gross debt that is forecast to reach $1 trillion in the next financial year and inflation that could reach 7 per cent by December due to the war in Iran.

"This budget includes the most significant tax reform package in more than a quarter of a century," he declared in his speech to parliament.

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The government will spend about $3.6 billion over two years to reform the CGT discount and negative gearing, which pales in comparison to the tens of billions the tax benefits have cost the budget over the years.

Some would say Albanese's previous vows not to tinker with negative gearing or CGT were smart, particularly since Labor under Bill Shorten lost the 2016 and 2019 elections after proposing changes to the CGT discount and negative gearing.

The risk the government has taken in making these changes is what has made this year's budget ambitious, added Probyn.

"This is an ambitious budget because it's attempting some tricky tax reform haunted by the ghost of Bill Shorten," he said.

The housing crisis, which sent the median house price soaring past $1 million, has prompted some calls to reconsider the property tax benefits, and ultimately spurred the government into a similar gamble as its stage 3 tax cuts backflip.

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By breaking an election promise, Albanese and Chalmers are promising to deliver changes they believe will benefit more people – roughly 75,000 of them getting to buy their first home – than they harm.

"Tonight, we choose the hard road of reform, not the path of least resistance, by responding to the pressures Australians confront today and fulfilling our obligations and responsibilities to the generations to come," Chalmers said.

Nine's chief political reporter Charles Croucher, however, warned the decision would take a long time to bear fruit for the government.

"These changes we've spoken about won't make a lot of money in the next two or three years, but it will change the way Australia looks at taxes, approaches wealth, particularly things like trusts and those big property portfolios," he said.

"He is trying to lay down a legacy, but he won't see the fruits of that legacy for quite some time."

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