Zali Steggall (Warringah, Independent) Share this | Hansard source

I support this bill being referred to the House Standing Committee on Economics, because it makes significant changes to Australia's tax settings and those changes deserve proper scrutiny. I thank the member for Wentworth for bringing this forward in the House today. I want to be very clear: I support the objective of improving housing affordability and making the tax system fairer. There is no question that negative gearing and capital gains tax settings have contributed to the distortion in the housing market, growing generational inequity and the difficulty in becoming a first home owner.

I also want to put on the record that I do commend the Treasurer and the government for having the courage to try and tackle this. It is hard. When I look at the grandstanding hypocrisy of some of the contributions in this place, there is no doubt that it is hard to tackle, so I commend them for having the courage to look at it when it comes to the housing aspect. But, because it is so hard, it is incredibly important to have that social licence and try and bring in the vast majority of Australians to make sure there isn't ground for festering misinformation and to make sure that the Australian people understand the case and the true consequences and possible unintended consequences of reform and this legislation.

What we know is that this bill goes far further than housing. It has implications for small businesses, family businesses, startups, trusts, shares and young Australians trying to build financial security outside the property market. The parliament should not be asked to rush through complex tax reform without a clear understanding of who is affected, what the unintended consequences may be and whether sensible carve-outs or transitional arrangements are needed. I understand that there are further negotiations and details that are being worked out, but, in that situation, it's simply impossible to genuinely assess the full measure without having all of that detail available. Good reform should be targeted, evidence based and durable, and that requires committee scrutiny.

In Warringah, it's not an abstract policy debate. Constituents have raised serious concerns about how these changes may affect their ability to build a financial buffer. One constituent—Nicola, a 36-year-old from Warringah—told me that she doesn't usually follow politics. She's not overly engaged, but, for this, her and her peers are very much engaged. She told me that she and her partner both work in demanding jobs and they are above average in income. They're in engineering and law. They have good incomes. And yet, as millennials, they're up early and home late. They've borrowed responsibly, yet they still feel like there is very little left over. They are barely getting ahead.

Nicola and many of her friends have invested the little bit of cash flow left over in shares and ETFs. It's not about getting rich. It's not about massive incomes on the side next to their work income. It's simply about trying to build some security beyond wages. It's about saving for a home, creating a buffer against rising costs or slowly building the capital needed to start a business. I've heard from many young Australians who have already been priced out of property investment. If we close off the share investment pathway, a beneficial way to build a buffer, then we risk pulling up one of the few remaining ladders for wealth creation or buffer creation for them.

Small business owners in Warringah have also raised concerns. Many are not large corporations with deep balance sheets. They are in fact local employers, family businesses and people who have taken risks, reinvested profits and built something over many years. The government has framed this bill as a housing affordability measure. That may be a fair description for parts of it, but it does not answer the broader concerns about shares, trusts, business assets and small business succession. If the policy goal is to reduce speculative investment in residential property, then the parliament should examine whether the bill is properly targeted to that goal.

We need to know whether the measures risk discouraging entrepreneurship, investment in productive businesses and modest long-term saving by younger Australians. We also need to understand the impact on people who have already made financial decisions under existing rules. Tax reform should not blindside people who have acted responsibly and planned in good faith. The Treasurer has said that one in 10 people under 35 hold shares, but that still amounts to 660,000 people. And then there are still a lot of other people who are looking at how they are going to grow a buffer beyond their income and earnings. So the concern is not that the capital gains tax should never change. The concern is that change should be carefully designed and we have to absolutely know what the unintended consequences may be.

Referral to the House Standing Committee on Economics would allow the parliament to test the evidence, hear from experts and stakeholders and improve the bill before it is passed. A committee inquiry should examine whether the bill should distinguish more clearly between residential property investment and other forms of investment, including shares, small-business assets and trusts. It should consider whether concessions, exemptions or grandfathering are appropriate for young investors, small investors or small businesses. It should examine whether there should be thresholds, caps or transition rules to protect ordinary Australians who are not the intended target of the reform. It should also seek the modelling assumptions and policy rationale behind the government's approach so the parliament can assess whether the measures will actively improve productivity and housing affordability.

There is so much misinformation and scaremongering out there, and that is one of the areas that the Treasurer has raised with me—the frustration around how much misinformation is festering. But the only way you address misinformation is by having a clear process of inquiry. It is not by shutting down debate and saying, 'There's nothing to see here; let's move on.' I would urge the government to consider that. I think the Australian people are reasonable. They want a tax system that is fair. Young Australians want a housing system that is fair to allow them to get in. Australians want a fairer tax system. They want this to be fair. I absolutely support that ambition and, as I said at the beginning, I commend the government for having the courage to tackle this, but we have to do it well for it to stick. We have to do it well for it to grow consensus among the Australian people.

We should not pass rushed reform that may create new unfairness while trying to fix an old one. Young people need pathways to build wealth and a buffer. Small businesses need confidence to invest and grow. Tax reform should strengthen those pathways, not diminish aspiration. The bill should be referred to the House Standing Committee on Economics so it can get the detail right, protect against unintended consequences and deliver reform that is fair, targeted and evidence based.

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