Kate Chaney (Curtin, Independent) Share this | Hansard source

I second the motion. I agree with the stated intent of the tax reform bills, and that is to level the playing field on property. I think there is appetite for that and I commend the government for finally tackling the tough issues after decades of inaction from both sides. I've advocated for tax reform since I first started in this place, for the sake of intergenerational fairness and to shift more of the tax burden from active to passive income, and this is a start, but there's more to do. It is so important that we get this right.

These bills, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026, will fundamentally change investment behaviour across our economy. They will affect millions of Australians and have significant interactional effects with superannuation, housing supply and business investment, so the stakes are really high if we get this wrong. The potential unintended consequences are significant for productivity, our other major challenge, and also for fairness.

I recognise there will always be winners and losers in tax reform. We have to accept that, but we need to understand these trade-offs, and the community needs to understand why these are the right trade-offs to make. I've had a lot of correspondence from constituents who are concerned about these changes. Some of those concerns are based on misunderstanding, but some raise legitimate concerns, and both types need to be addressed so that we can maintain trust in undertaking tax reform, so a 'crash or crash through' approach shouldn't be the right approach when we're making big changes like this. It's really important that the public understand the why and the how, and we are not there yet. If this isn't done well and with public understanding, it will make it much harder to do other reform—the reform that we need for intergenerational equity and to make sure we have a tax system that's fit for the demographic changes that we're seeing.

We have committee processes for a reason. Committees are there to receive public submissions, to hold expert hearings and to apply scrutiny to unintended consequences. Committee processes can also surface new information that the government doesn't have, and governments can't be expected to know everything and get everything right immediately without that broad consultation. A committee process will build legitimacy and trust. It will increase the likelihood that the drafting actually matches the policy intent, and it will provide an opportunity for government to clearly justify and explain the choices that are being made. It will make the legislation better. Rushing this through without adequate scrutiny makes it more likely that the legislation will require amendment, so it's actually lower cost to have proper scrutiny now too.

These bills are within the Economics Committee remit. The Economics Committee exists precisely to scrutinise legislation and policy with broad economic implications, and these bills have implications for a broad range of economic issues, including housing affordability and supply, investment incentives and capital allocation, revenue and fiscal settings, distributional outcomes across income groups, and productivity.

There are a range of unanswered questions that a committee inquiry could help to answer. On capital gains tax reform, it could look at what the pros and cons of the CGT changes extending to all asset classes are, rather than limiting it to housing, which is where the market distortion was identified. It could look at how the government might protect founders, employees and investors in startups, given that startups typically have a low cost base, meaning almost all future gains will be taxed as real gains, and given how vital they are to meeting our productivity challenge. It could look at what the impact would be on productivity and fairness if the small business CGT exemption threshold were raised. It could look at how we could allow founders to spread capital gains over multiple years and look at whether that's a workable solution and whether it has been modelled. It could look at how the changes would affect ordinary Australians investing in high-growth shares and ETFs as a means of building wealth and what the implications of that are. On negative gearing, the committee could look at what evidence there is that limiting negative gearing to new homes will meaningfully increase housing supply, rather than simply shifting investment patterns. It could also look at how the grandfathering of existing arrangements might impact the market.

Additional time will allow more consultation. The government has said that it is undertaking consultation on the CGT changes and that that will happen in due course. But if this goes to a committee and there is additional time, then a complete, considered legislative package could come back to the House, not bills that will require immediate amendment.

We really need to get this right. We have committee processes for a reason, and the government should use the committee processes that we have to ensure that we have the best version possible of this aspect of tax reform and that the public understands the implications and the trade-offs that are being made. So I commend this motion to the House.

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