A new report from the Australian Financial Review reveals that the Parliamentary Budget Office believes the impact of negative gearing and capital gains tax changes is uncertain enough to make revenue forecasts of low reliability.

According to correspondent Laura Tingle, Labor is heavily relying on its negative gearing and capital gains tax package to shore up its medium-term budget position.

However, the PBO commented that the policy might only raise around $6 billion a year by 2026 to 2027, with $2.5 billion coming from capital gains tax and $3.5 billion from negative gearing measures. This is approximately $800 million less than Labor's published figures.

Still, this year's budget papers noted that "forecasting CGT is very difficult," as it is seven times more volatile than total tax revenue and 2.5 times more volatile than company tax revenue.

"The costing is considered to be of low reliability due to uncertainty surrounding behavioural responses, broader economic impacts, and assumptions surrounding the growth in the components of net investment income and capital gains," PBO said. "This response does not account for the potential broader macroeconomic implications of this proposal. In addition, the reliability of the costing decreases the further into the future the estimates are projected."

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