Alison Byrnes (Cunningham, Australian Labor Party) Share this | Hansard source

I rise today to speak on the Appropriation Bill (No. 1) 2026-2027 and related bills. I could not be prouder of the budget that my good friend the Treasurer has put forward. What the Treasurer has put together speaks to the heart of what it means to be a Labor government. It focuses on equity, on rebalancing the weights of the generations and on helping ordinary Australians. This budget is the most important and fair budget in decades. It is big and it is bold and it tackles long overdue reform to our tax system that will fundamentally change the future for future generations.

This has certainly not been easy, but government isn't easy. For those of us who genuinely care about people, like I know the Treasurer and the Prime Minister do, these decisions are really tough, and that is the hard work of government. That's what it means to lead the country to a better and fairer future. We're focused on helping people in our community to deal with cost-of-living pressures and the uncertainty of the war in the Middle East. We're building a more resilient economy and putting money back into the pockets of Australians.

It tackles some long overdue reform. It's no surprise that those who like the system as it is—stacked against younger generations and working Australians—are working hard to spread misinformation and fear. When things are new or complex, opponents unfortunately use this as an opportunity to spread mis- and disinformation. I've seen this in the offshore wind debate, and we've seen it for decades around immigration and refugees. We experienced it around these very same issues back in 2019. But the community now understands more acutely than ever that these changes must happen, and the time is now.

According to the 2023 Intergenerational report, over the next 40 years the rate of people participating in paid work is expected to decline from 66.6 per cent to 63.8 per cent. At the same time, the number of people aged 85 and over will more than triple, and the number of centenarians is expected to increase sixfold. If we don't take action now, we simply won't have the supports we need to deal with this shift. For too long, our tax system has been stacked against working Australians. It has incentivised investment in housing as a wealth generator, and it has given tax breaks to people using trusts and other mechanisms to reduce their tax burden unfairly.

Housing affordability is one of the biggest challenges for our community right now. Just to be clear, this crisis is not just impacting young people, but we do see them being disproportionately disadvantaged when it comes to cracking into the housing market for the first time. This is something that worries them, and it is something that worries their parents as well. I've heard too many stories of parents who are delaying their own retirement because they are still supporting their adult children at home. People want to be able to see their kids get the same leg-up that they did, and, in so many parts of our society, this just isn't the case. No-one wants to be the generation that leaves their kids worse off than they were.

Let's talk about the capital gains tax and negative gearing for a moment as they relate to housing. Capital gains tax, combined with negative gearing, makes it harder for first home buyers to buy a home. With the way the system is set up, investment into existing property is encouraged, and that investment is putting up prices and locking out first home buyers. It's also pulling investment away from other productive parts of the economy. This also impacts families and Australians who need to move for a whole range of reasons—those who are looking to get back into the market after a relationship breakdown or older Australians on lower incomes wanting to make a change for retirement and many more. Investors have a tax system on their side, which means they can spend more than those who don't. We need to make it more affordable and more attractive to buy new homes that add to our housing stock and help to take the pressure off the existing housing market. This means more homes for renters. It means more affordable homes for first home buyers. It means a rebalance in a system that rewards wealth.

What are we actually doing? When you sell an asset, you should only have to pay tax on the real gains that you have made, not on the inflation over the time you have held the asset. That's the purpose of the capital gains tax discount. When the system changed in 1999, instead of calculating the actual inflation of an asset, an arbitrary 50 per cent discount was calculated. This was billed as a simpler alternative, but it has helped make a two-class system when it comes to assets. For some assets, particularly high-growth assets, that discount massively overcompensated for inflation, but some slower growth assets were instead taxed too harshly. What has housing been since 1999? A very high growth asset. Combine this with negative gearing. When your rental income is less than your property expenses, these losses reduce your taxable income, meaning that if you spend more on your property you reduce your overall tax burden. So investors pay less tax on high-growth property gains than they might on slower growing assets, and they can reduce their overall tax burden if they spend more on housing than they receive in rent. Overall, it gives them more money to spend. This is a system tipped out of balance.

How are we fixing it? From 1 July 2027, we're going to discount capital gains tax based on actual inflation and will apply a minimum 30 per cent tax to real gains to keep them more in line with the rate paid by an average worker. Some people will be better off, and people receiving means tested income support payments, like the age pension, will be exempt from the minimum rate. These changes will not impact the properties you already own. Importantly, if you buy a new property, you can negatively gear that property just like you can now, and you can make a choice about whether to use the old or new capital gains tax discount system. We want people to buy new homes, and our changes incentivise that.

As I mentioned, there has been a lot of disappointing misinformation about what these changes mean. We are not taxing 40 per cent on real gains. Inflation remains discounted, so the effective tax rate will be lower than the nominal marginal tax rate. According to Treasury estimates, the average tax rate on gross capital gains will increase from 19.3 per cent to 21.4 per cent by 2036-37. We will also not be taxing your family home. We never have and we never will. And we are not implementing a death tax.

I've also heard a lot of talk about discretionary trusts. Around 90 per cent of trust wealth is held by the wealthiest 10 per cent of households. Using a discretionary trust helps those wealthiest 10 per cent to manage their tax affairs in ways that are simply not available to most Australians. The number of these trusts has doubled over the past 20 years, once again, disproportionately advantaging people who can use discretionary trusts and disadvantaging Australians living on a wage. And we are not saying that there aren't legitimate reasons to use a trust. There absolutely are. But this system should not be used as a way to simply pay less tax than you otherwise would. A 30 per cent minimum tax will help ensure tax on discretionary trusts is more aligned with tax on wages, and will help to pay for the $250 tax offset for 13 million Australian workers. The changes won't come into effect until 2028, to ensure people have the time to restructure.

Are these changes easy? No. Are they necessary? Absolutely, yes. It's the fair thing to do. It is the right thing to do. It will tax every asset class more evenly on the real gains made, stop encouraging short-term speculation and encourage longer term investment. The reforms to make our tax system fairer will help 75,000 more homeowners crack into the housing market over the next decade, and that's on top of our five per cent deposit scheme for first home buyers, which has already helped 1,159 people in Cunningham.

We also recognise that there are some local barriers to building more homes quickly. That's why we're investing $2 billion in the infrastructure needed to build more homes. Our new local infrastructure fund will see roads, water, power and sewerage built to unlock up to 65,000 homes over 10 years. This includes $500 million reserved just for regional Australia. At the same time, we're reducing red tape for faster approvals and providing new pathways for migrant workers already in Australia to get their existing qualifications and practical trade experience recognised, helping address workforce shortages. We're coming at the housing crisis from every angle to build more homes, give first home buyers a fair go and support renters with stable and affordable homes.

Our tax reform is also benefiting millions of small businesses around the country. This budget invests $3.5 billion in new business tax relief to boost investment, increase cash flow and support growth. We're making the $20,000 instant tax asset write-off permanent to give more businesses more certainty to invest. Over the next five years, that will deliver around $890 million in cashflow support, save 366,000 hours of recordkeeping and around $32 million a year in compliance costs. Our permanent two-year loss carryback for companies with turnover up to $1 billion will start on 1 July 2026 and will help small businesses to return to profitability faster, give them the confidence to invest earlier and withstand volatility.

We're helping startups to grow in their first two years by introducing loss refundability from 1 July 2028, providing a tax refund before they are profitable. We'll expand venture capital incentives from 1 July 2027 to help more innovative firms access the capital they need to scale and create jobs. We'll better target the research and development tax incentive from 1 July 2028 to unlock $400 million in additional R&D by young firms per year. There's a lot of research and innovation happening right across the Illawarra, and I know these incentives will help local businesses grow and shape the future made in the Illawarra.

All up, the budget's productivity package cuts red tape and regulatory costs by over $10 billion. I am particularly excited about our new 'tell us once' approach. I can't tell you how often I hear from businesses and community organisations about their frustrations with filling in a new form with exactly the same information every time they talk to a different department, and sometimes even a different section of the same department. It's a waste of time and energy, and many just simply do not have the resources. So we're investing $654.3 million to expand the use of digital ID to safely verify identity, reduce data storage and improve access to government services online. By 2030, the Australian Public Service will work as a single, unified enterprise to deliver simple, accessible services for people and businesses. This will revolutionise the way that government engages across the country, and will transform the experience that I know so many people have. And these are just a few ways that the budget is supporting business.

I want to touch on the massive ongoing investment that this budget is making in health. I talk about this a lot, but it's worthy of another mention here. This budget has $3.5 billion in measures to improve access to health care across the country. Medicare urgent care clinics will become a permanent part of Medicare. These free clinics have been a huge success in Corrimal, in Dapto. We have seen more than 68,000 free visits to these clinics, and I regularly hear positive feedback from people across the Illawarra about their experiences. They are delivering free health care closer to home when it's urgent but not an emergency. They are taking the pressure off hospitals like Wollongong Hospital, where we know the emergency department is already under significant pressure.

We are investing in more cheaper medicines for cystic fibrosis, chronic kidney disease, various cancers and more, and we're making the RSV vaccine free for people aged over 75—and that's just to name a few. The Illawarra has a critical shortage of aged-care beds. It's one of the issues that keeps me up at night. In March this year, the member for Whitlam, Carol Berry, the member for Gilmore, Fiona Phillips, and I worked very closely with the Minister for Aged Care and Seniors, Sam Rae, to ensure that the federal government made the Illawarra one of its first priority regions to access $115 million under the Aged Care Capital Assistance Program. This will fund projects that can build and open more beds within two years. This is great news, but I know it's not enough.

This budget is also investing $3 billion in aged care to deliver 5,000 more aged-care beds every year, to significantly reduce wait times for Support at Home packages and to provide better care for older Australians. At the same time, we've made personal care services like showering and dressing free to help people age in their homes with dignity. I know this one in particular is a really welcome change.

This is a big, bold and fair budget. It's a Labor budget at its core, putting fairness first and supporting Australians. I'm proud to be part of the team delivering for the Illawarra and I commend the bill to the House.

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