Why is Labor spending its political majority on this?

Is this the tax reform hill that Anthony Albanese and Jim Chalmers want to die on? (ABC News: Callum Flinn)

Two questions hang in the air above the now-decaying federal budget, like condors waiting for carrion.

First, why is Labor spending the political capital of a 50-seat majority on a minor change to capital gains tax on businesses?

Second, will housing become more affordable, and therefore be a bad investment and no longer a way to build wealth?

For the first time since I started covering housing affordability as a national disaster, I'm optimistic that the tide has turned and that residential real estate will indeed be a poor investment, possibly for decades, which means affordability will gradually improve.

A generation of young families who bought a house recently using too much debt, but hoping, fully expecting, to build equity and wealth, will be devastated.

They are facing the loss of whatever equity they now have and a lifetime grind of principal and interest.

That especially applies to those who took up the government's 5 per cent deposit offer. They may never have positive equity in their house.

It means that the loss of housing affordability over the past 25 years has been a double disaster: for those who don't own a house, and for many of those who do.

But there is simply no way to improve housing affordability for those who don't own a house while continuing to build the wealth of those who do, and the national consensus is that affordability must come first.

Why the Albanese government decided to take the next step and use its record majority to apply the tax reform for housing affordability to business as well is a complete mystery.

The principle that tax should not distort investment decisions is theoretically sound, but there are bigger tax distortions on which to spend political capital.

Ironically the 50 per cent CGT discount replaced the previous inflation adjustment in 1999 for the explicit purpose of distorting investment towards business, and in particular company shares.

It didn't work, and instead it created the unintended distortion of turning investment towards real estate and away from business.

That massive blunder by John Howard's Liberal government kicked off a 45 per cent surge in house prices over the following three years that began 25 years of steadily worsening affordability and has culminated in a crisis that has reshaped society and, among other things, is helping to destroy the Liberal Party by driving the disaffected towards One Nation.

Now it's apparently an urgent priority for this government to