Milton Dick (Speaker) Share this | Link to this | Hansard source

I've received a letter from the honourable member for Page proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The impact of the Government's rushed and damaging tax changes on small businesses, farmers, and all Australians who save, invest, and take risks.

I call upon those honourable members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Kevin Hogan (Page, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Two weeks ago, something changed in Australia. Something has changed in the psychology of Australians, and over time that will take effect in what Australians do and what Australians don't do—especially entrepreneurial Australia, Australians who want to take a risk, Australians who want to start a small business and any Australian who really wants to have a go. What happened two weeks ago was a very big change in the risk-reward of what you do with your money in Australia. Historically, if you took a risk in Australia, you got the reward. But the change is that now, when you take a risk with your money in the Australian economy, the people who will take the reward are the Albanese Labor government.

When I think about this, we all—almost without exception, I would say—have worked in our own private enterprise or have worked in private enterprise, so we understand. When you hang up your shingle, when you roll up the door, when you open the door to your business and you are waiting for customers to come in or ring, you know the risk of that, you know the anxiety of that, and you know how hard you have to work to make money not only for your own salary but also for other people's salaries.

As a matter of interest, I thought I'd Google two people and look up their work histories, because I thought, 'They should get this.' I thought: 'Let's have a look at the current prime minister of Australia's work history. Surely, he has worked in a private enterprise. Surely, he has worked for a business and knows the pressure of having to pay someone's salary from your efforts or the efforts of your staff.' So I had a quick look. The first job was research officer for Tom Uren, a Labor minister. I thought: 'Okay, that's only his first job. It might get better.' The second job was assistant general secretary of the New South Wales branch of the Labor Party. I thought, 'Okay, he might have branched out after that.' The third job was senior adviser to Morris Iemma. Well, at least he swapped from federal to state Labor. Anyway, let's keep going. The fourth job was principal adviser for Wayne Swan. So we've gone back to Swan. The fifth job: Labor MP. Deflated by then.

This is an important point. What we have are two senior people who are running the Australian economy on behalf of the government right now, the Prime Minister and the Treasurer. I have respect for both those positions. The problem—we can't overstate this—is that neither of them have actually worked in the real world. Neither of them has actually worked in a business. They've all worked in this bubble of federal politics. They've all worked as staffers or walked into this chamber at a young age—I congratulate them on getting into this chamber at a young age; I'm not criticising that—with no real-world experience. That is the problem with everything we're talking about, because for them this is just theoretical. This is just some idea or some understanding they wouldn't have of the real world. There's something cellular that you get when you know that when you go to work, you've got to make money that day. You've got to sell whatever you're selling, or you can't pay your own salary or other people's. That's something cellular that everyone here gets. We get it. We know the importance of it, and that what is sadly lacking on the other side of politics.

Now I want to go to some people who do know. I want to just quote four or five people who do know. Actually, I will give a shout-out that the member for Parramatta has had some real-world experience. I think he's been a Labor staffer as well. He's made some interesting comments about this budget.

Firstly, 40 Australian business owners under 40 have penned an open letter to the Prime Minister, saying that his tax reform is an 'aspiration ambush'. It's not me saying that; 40 young leaders in Australia who have done very well are calling this an aspiration ambush. Young business builders in Australia from technology, artificial intelligence, retail and manufacturing sectors told Anthony Albanese that his budget has hit them the hardest. They said:

We work the hours. We carry the risk.

But now the reward is going to the Albanese Labor government.

Janine Allis, Boost Juice founder, said the changes could 'destroy the core of what Australians are'. We're built on having a go. If you have a go, you should get rewarded. She went on to say that you need to inspire people to actually take the risks needed to get ahead. With this policy of the Labor government, she says:

We won't want to open businesses or start businesses, because the risk of failure and the risk for reward doesn't add up.

It's not me saying that; it's a very successful Australian businesswoman saying that. She also said the government should say what they do and do what they say, after telling people before the election they would not touch negative gearing and capital gains taxes.

Chris Richardson, an economist, says you don't want to discourage people from taking a risk.

Dave Hughes—this is an interesting one—starts by saying:

I voted for Albo and Chalmers, they didn't have a mandate for changing capital gains tax.

It's now the highest in the world. No one is going to want to invest in Australia.

…   …   …

You didn't have a mandate for it. You—

Can I quote 'lie'? I'd better not say it.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

No, you cannot.

Kevin Hogan (Page, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I won't say that word. He said:

It's not valid, so let's go to the polls again.

I'm going to get to one Labor member—oh, he was here, but he's left; the member for Parramatta.

Honourable members interjecting—

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for Hunter and just about every member on this side. I can barely hear the member for Page at the dispatch box.

Kevin Hogan (Page, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

You're missing a lot!

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I do want to hear you.

Kevin Hogan (Page, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Anyway, Andrew Charlton—and I acknowledge the member for Parramatta, who has been a staffer but has also made a go on business—has said:

… the point that many start-up founders and many small businesses have been making is valid.

It's a valid point—

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Order! A point of order from the member for Swan.

Zaneta Mascarenhas (Swan, Australian Labor Party) Share this | Link to this | Hansard source

I note that the member did not use titles earlier in referring to the member for Parramatta.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

It is a good reminder for us all. Thank you very much. We will stick with correct titles in the chamber.

Kevin Hogan (Page, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

He says:

It's a valid point because that new regime doesn't interact well if you have a really low capital base, because you've got nothing to inflate off.

So I acknowledge him.

Now, here is the other thing that I'm hearing from a lot of people about this. Obviously, I have to mention this. Besides the fact that it's killing the risk reward formula of this country, besides the fact it's actually killing the core of having a go in Australia—that's not me saying that; that's some well-known business people in Australia—the other thing about this is the absolute deceit of this. You should all hang your head in shame. There's not a member over there, even the new members, on that side of the chamber. You should all hang your head in shame because you got in on deceit. When the Prime Minister was asked, or you were asked if you went to campaign forums, about negative—

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

It might be better to direct your comments through the chair instead of personalising this, please.

Kevin Hogan (Page, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Good point. As all members opposite, they all would have been asked, as the Prime Minister was, before the last election, 'Are you going to make changes to capital gains tax, to negative gearing, to trusts,' as a prime minister was asked 52 times, and 52 times he said, 'My word is my bond.' We all know, when the Prime Minister says that, that that has no credibility, and that does great disservice not just to that side of politics and to everyone that sits there who got in on that deceit but to this whole chamber, because the Prime Minister is bringing our occupation into disrepute by misleading the Australian public continually.

Daniel Mulino (Fraser, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

This budget deals with three big issues. Firstly, it deals with the fact that the tax system is not working for young Australians and is working against their aspirations to get into the housing market, and it deals with those issues. Secondly, it delivers another big set of tax cuts. It delivers the working Australian tax offset and the instant deduction. Thirdly, it deals with some very longstanding issues in our tax system in terms of better aligning taxes coming from capital and those receiving income from trusts versus those earning income from labour.

Now, if you heard the speech from those opposite just then, you would think that this is a topic that warrants a lot of mirth and merit. Look, humour has a place in this chamber. But if you listen to that speech from those opposite, you'd think the tax system is just fine. The opposition tomorrow are going to face two tests. The first test is whether they are going to vote against tax cuts yet again. They went to the last election opposing the two tax cuts for all Australian taxpayers that we took to the last election. They're going to face a test tomorrow. Are they going to vote against the working Australian tax offset and the instant deduction? The other test they're going to face is whether they are going to say that the tax system is just fine when it comes to young Australians and the housing market? Are they going to say the tax system is just fine when it comes to the balance between those paying income on labour versus those paying income from other sources?

Those opposite come in here and they crack jokes for five minutes about CVs, but what is it they're saying about our tax system? What is it they're saying about the need for change? We had a three-day economic reform roundtable. We had a three-day economic reform roundtable in which experts from right across the tax system—policy experts, academics, business leaders, union leaders, leaders from civil society—all agreed that we need more intergenerational fairness in our tax system. We need reform in our tax system to make it easier for young people to get into a house. They all agreed that we need to rebalance our tax system away from relying so much on income taxes and towards other sources, and this budget addresses those big themes. There's an agreement from that three-day economic reform roundtable from all the experts. There's also an agreement from the conversation in the community. When I talk to young people in the community, they all say that the tax system is not working for them. Those opposite face a big test. Are they going to stand with the status quo? From the speech you just heard, the answer is yes.

Now when it comes to small businesses, when it comes to business in general, this budget helps small businesses in a number of ways. Firstly, we're making the $20,000 instant asset write-off for small businesses permanent. They've been calling for that for years. This is a longstanding source of uncertainty for small businesses. Those opposite had almost a decade to do this. They sat on their hands. We're doing it. That's a big change for small businesses. We're reintroducing permanent loss carry back from 1 July 2026 so that business is better placed to withstand shocks from global uncertainty. In a period of uncertainty, this is a big change. We're also increasing the maximum asset cap on venture capital limited partnerships and early-stage venture capital limited partnerships, so that more entities can receive these important tax incentives. We're providing small start-ups that generate a loss in either of their first two years of operation with the option of a refundable tax offset. We're also better targeting the R&D tax incentive in light of the conclusions from the SERD report. So there is a lot of serious reform in this budget when it comes to small business, start-ups and venture capital.

Let's look at the capital gains tax. This is an area that has been calling out for change for over two decades. The 1999 changes that the Howard government brought in were supported on the basis that they would encourage more people into share ownership. What has happened in those 25 years? We have seen a significant drop in the proportion of Australians owning shares. We've seen, instead, a significant increase in the proportion of Australians owning highly-leveraged standalone houses. It has introduced significant distortions in the way in which assets and capital are taxed in our country. It hasn't worked the way it was supposed to. It hasn't led to an increase in share ownership; it has led to a decrease, and it has distorted the housing market in a way that is adding to barriers to young people getting into houses.

Our approach, when it comes to negative gearing and a more rational way of indexing the cost base of capital gains, is modelled to increase, over the medium term, the number of owner-occupiers by 75,000. That is 75,000 individuals and families owning their own home rather than renting. That is 75,000 houses with individuals or families as owner-occupiers, rather than being investor owned. That is a significant change in the housing market as a result of removing tax distortions that have been there for too long.

It is the interaction of negative gearing and this artificial 50 per cent reduction on nominal gains that is distorting the housing market. We are returning to the indexation method that was originally in place as introduced by the Hawke-Keating government. The goal of that indexation method is the sound 'neutral across different asset classes' method, whereby we are identifying real gains—that is the capital gain that will be taxed, the real gain. We're taking away inflation. That is the rational way to do this.

A number of commentators have discussed this way of taxing capital gains. Let's look at UBS chief economist Richard Schellbach:

From a 'big picture' point of view, equities would become a relatively more competitive investment proposition—

under the approach we are supporting.

Let's look at the comments from Sally Auld, the chief economist at NAB: 'By the principles of optimal tax policy, this CGT change should deliver an efficient, fair and robust regime once fully implemented.' The speech before contained a lot of hyperbole when it came to risk-taking and investing. But when we talk about the tax experts, what they're asking for is to remove distortions from the tax system that were introduced in 1999, which have had the opposite effect of what they were supposed to.

Let's look at the comments from Westpac's chief economist, Luci Ellis, an extremely accomplished economist: 'The tax system did overly encourage leveraged investment in property over investing in other things, whether that was the stock market or a business or something else that produced income.' Luci Ellis has identified exactly what happened after the 1999 changes; it led to a boom in investment in highly-leveraged standalone houses. That is exactly what is contributing to keeping young people out of the market, and that's exactly what underpins the fact that the modelling from Treasury shows that 75,000 families will shift from renting to being owner-occupiers.

Let's look at another key component. I talked about the three overarching themes. One of the key themes is this working Australians tax offset. This is a significant component. What it will represent, along with the instant deduction, is that this government will have cut income taxes five different times in three different ways over the course of its first four years. This will represent a $250 annual offset that will only be applied to earned income and will not apply to other forms of income, such as investment income. So we are designing an additional way in which we can cut income so that it applies to those earning income from labour. Again, this was one of the core themes that was identified in the three-day Economic Reform Roundtable. It is one of the core themes that has been identified in any number of tax reviews over recent decades. This government is delivering. When you add up all the different tax reforms that we have delivered, the five different tax cuts in three different ways, somebody earning the average income will see up to $2,800 a year taken off their tax bill. This is meaningful change being delivered in a responsible way.

The test for those opposite tomorrow will be do they support the WATO or not? But the other test for those opposite will be do they support changes to the way in which the tax system is distorting our housing market or not? These changes have been called upon by so many experts. So many have said for decades that we need to address these distortions, that we need to address the way in which trusts are taxed. If you listen to the speeches here of those opposite, the questions in question time and what they say outside this chamber, they have become the party of the status quo. They say that nothing's wrong, the housing market is fine, and the tax system is operating with the housing market in a way that's AOK. That's not what I'm hearing from the community. It's not what the experts are saying, and that's why this government is doing something about it.

Anne Webster (Mallee, National Party, Shadow Minister for Regional Development, Local Government and Territories) Share this | Link to this | Hansard source

I want to commend the member for Page for this very, very important matter of public importance, and I want to start today with the voice of my constituents Peter and Fiona Devilee. They are business owners in Mildura, in my electorate of Mallee. They are very well known. They have an incredible reputation. Fiona has told me this today:

For 35 years, we have worked hard, taken risks, employed local people, paid our taxes, and responsibly built "off-farm" assets to secure our future, our retirement and the opportunity for the next generation of our family. Every investment we have made has been funded with after-tax income—money that was already taxed before being taken out of our business.

We purchased our business from my father-in-law when it employed just 17 people. Through decades of hard work, reinvestment, long hours, financial pressure, and commitment to our region, we have grown that business to now employ over 75 people while delivering an essential service to our community. We have created jobs, supported families, trained apprentices, paid substantial company and personal taxes, and continually reinvested back into the economy.

Now, the proposed Federal Government CGT changes threaten to significantly erode the very assets and retirement savings we have spent a lifetime building. It is difficult not to feel as though people who have worked hard, created employment, taken business risks, and contributed positively to their communities are being penalised for doing exactly what governments encourage Australians to do—build businesses, create jobs, invest prudently, and become self-sufficient in retirement.

She continues:

At some point, there must be recognition that these are not speculative gains made overnight. They represent decades of sacrifice, responsibility, taxation, and contribution to Australia's economy and regional communities.

I want to state that this couple have not only built a very successful business; they have been huge community contributors. They volunteer; they encourage others to volunteer. They are on boards. They are very invested in their community. I am really saddened by this text from Fiona. She speaks the truth that Labor's politics of envy does not want to hear, does not care about, in its war on aspiration.

I invited the Leader of the Nationals, Matt Canavan, and Deputy Leader of the Nationals and member for Gippsland, Darren Chester, to Mallee on Thursday and Friday last week. It was a tremendous visit with great turnouts and a strong message that the Nationals are the party for regional Australians and that we stand shoulder to shoulder with our farmers. Farming is not a high-income game. Farm returns tend to be capital gains, like increases in farmland values, so capital gains tax changes will hit farmers the hardest. Despite what the government claimed in question time today, based on historical returns, our farmers face an increase in their capital gains tax rate from 23 per cent to 36 per cent under the government's changes. Arguably, Labor's capital gains tax plans will give us some of the highest such taxes in the world, behind only Denmark and Chile.

I have said a few times in this place that some of Labor's bills create a lawyer's picnic. Well, in the case of Labor's tax changes for business, accountants and lawyers will both be cracking open the bubbly. During Labor's cost-of-living crisis and their power bill price spikes, Labor are hiking compliance costs, because so many small businesses will now need legal and/or financial advice on what to do with their assets and with their businesses.

As I said earlier today in the House, Labor's tax changes have no mandate, no permission, from the Australian people. It's not like John Howard's goods and services tax. Labor's— (Time expired)

Sally Sitou (Reid, Australian Labor Party) Share this | Link to this | Hansard source

I appreciate the contributions from those opposite. Of course, small-business owners are fearful because those opposite have been whipping up a scare campaign that is almighty. Those opposite are scaring small-business owners, and that's why they've been flooded with these emails and texts. Those opposite are a veritable haunted house that you roll out at Halloween. There's a scare campaign at every corner. We've got the ghoulish ghost of the so-called death tax, the zombie return of the tax on aspiration and the same tired lines they drag out every single time there's a whiff of reform. They creak open the door, whisper a new fear and dress it up to look real, but, when Australians turn on the lights, there's nothing there. There's no death tax. There's no grand conspiracy. What there is is support for small businesses.

The claims that they are making today—in all the emails and texts that they are reading out—that these changes somehow hurt every small-business owner, every farmer and every saver are simply not true. When, in this place, we talk about small businesses, we should do it with respect but, importantly, with facts. Small businesses employ millions of Australians and contribute enormously to our economy. In my electorate of Reid alone, there are around 26,000 small businesses. They are the cafes along Majors Bay Road, family shops in Five Dock, restaurants in Burwood, small firms in Rhodes and tradies who keep our suburbs running, and they deserve facts. They are not just businesses; they are local families, local jobs and a myriad of stories of hard work and opportunity.

So let's give them facts. Around 90 per cent of small businesses will not be affected by these CGT changes at all. That is nine in 10 small businesses that will be unaffected. We didn't hear that from those opposite. If you've owned your business for 15 years and you're retiring, you still pay zero capital gains tax. You can still reduce gains by 50 per cent on active assets. You can still exclude up to $500,000 through the retirement exemption. And you can still defer CGT by reinvesting in another business asset. The reason why nine in 10 small businesses will remain unaffected by our CGT reforms is that those four exemptions still remain, so stop with the scare campaigns. When those opposite claim every business owner is under attack, they are not telling the truth. They are trying to scare people, and we have to call it out.

Let's also be clear that this is not rushed reform. There is a clear transition period from 2027, giving businesses time to plan and restructure if they need to. This is responsible policymaking. 'Responsible' is an adjective that those opposite may not understand, because they've been running away from it for so long, but, on this side of the House, we are about responsible policymaking. Those opposite talk about backing small business, but, when they were in government, what was their track record? Too often, small businesses were left to fend for themselves. Those opposite announced deregulation agendas. They came in here talking about cutting red tape, but nearly half of businesses said regulation was stopping them from growing. That's not delivery; that's disappointment.

The difference here is that we on this side of the House are providing practical support for small businesses: a permanent $20,000 instant asset write-off so businesses can invest with certainty; loss carry-back, so you can recover from tough years; real reduction in red tape and compliance costs; and a cut in energy bills and help to improve energy efficiency. And, importantly—and this is something that those opposite completely mismanaged—we are investing in skills and training because that's what small businesses need—they need skilled workers. So we are backing small businesses. We're not running fear campaigns. We're not using recycled attacks. Get with the program.

Sam Birrell (Nicholls, National Party, Shadow Assistant Minister for Regional Health) Share this | Link to this | Hansard source

I too rise to speak on this matter of incredible public importance. I feel that these are rushed reforms, because they were off the table a year ago. A year ago, for the 50th time—'It's off the table.' All of a sudden, once they'd won the election, they were back on the table. I suspect they were on the table all along. But I want to talk about what it means to create a capital gain in a business. I'll use the example of farms, but it applies to all sorts of business. Creating a capital gain requires risk on the part of a business owner. It requires labour, and it requires significant investment.

Today, when the member for Gippsland, the shadow agriculture minister, asked the Minister for Agriculture, Fisheries and Forestry about whether there would be exemptions for farmers, the minister gave an answer to say that, yes, there will be exemptions. But here's the truth: there are holes in this policy that, as one expert said, you could drive a header through.

Even though capital gains, specifically, might be exempted for primary productions, a lot of these farms are set up with trusts. They don't operate as a simple entity; they have a trust that owns the land and another that runs the business. The operating trust will pay the rent to the landholding trust. And that's standard. That's the way farming businesses work. Farming is hard enough, so I think they're allowed to use some advantages in the tax system to run a successful business that benefits Australia. But, under this government's approach, that rent is not considered primary production income. It means that the farm pays rent to itself, and that rent is now hit with a 30 per cent minimum tax. What are the arrangements for? Perhaps the agriculture minister can come in and clear this up and explain it during question time. What are the arrangements for business—for farming businesses? The way it stands at the moment is that, from 2027 onwards, this Labor government is slugging farming businesses on their capital gains.

Monique is a dairy farmer in my electorate. She's doing a lot of really hard work. On her behalf, I say to the Labor government: if you want to slug her heaps of capital gains tax 10 years after 2027, you go out there and drive around at three o'clock in the morning and pull calves out of a cow. You get up and milk the cows—and then again at 3.30 in the afternoon. You take the risk: you sit with your back manager and go build a barn, not knowing whether that risk is going to pay off. You do all the hard work: you build a rotary dairy and take the risk on that investment and then work it for 10 years. They're taking a massive risk and working very hard, and they don't need a government to come and treat them as a cash register because they've spent too much. And that is exactly what's happening.

Matt's an orchardist in my electorate. He's going to have a capital gain, I hope, over the next 10 years. But if you, the government, want to take all of the money from his capital gain as a result—or a huge proportion of it—then you go out and plant the trees. You take the risk that there might be a hailstorm and that, for two years, you will not get a crop at all. So, then, you spend the money and take the risk on putting hail netting up, which is a huge investment—you have to sit there and talk with your bank manager. Can I really do this? Well, you have to. There might be a hailstorm that will limit your income for two years. The Treasurer should go out and help put up that hail net. The Prime Minister should go and pick a bit of this fruit to understand what it's like to work really hard and take a risk in regional Australia.

The fact is that these are big, big reforms, and when you've got a big reform you have to have the courage and decency to take it to an election, and, unlike John Howard in 1998 and, to his great credit, the former member for Maribyrnong before the 2019 election, they did not have the courage and decency to take this to an election. That's the way democracy should work—you have an idea, you take it to an election and you get a mandate; you sell it, people who don't agree with you criticise it, and the Australian people make their minds up. But they weren't given the chance to do that.

Fiona Phillips (Gilmore, Australian Labor Party) Share this | Link to this | Hansard source

If you work hard and save hard, you should be able to purchase your own first home. But, sadly, for young people in my electorate of Gilmore on the picturesque New South Wales South Coast, the dream of buying their first home locally has been unattainable for years. First home buyers just can't compete with investors who are paying top dollar for homes in our popular beachside towns, lakeside hamlets and quaint historic villages. Our kids and grandkids are being forced to pull up roots and move away from the communities they love and grew up in.

We know investors have a huge advantage over first home buyers. They have an unfair tax advantage, and we want to fix that. The Albanese Labor government is making bold changes to help young Australians get a foot in the door of the property market. I'm a mum of four adult children and, like so many other parents, I want my kids to be able to continue to live locally if they so choose. Opening the door to homeownership on the South Coast means young people can be involved in our communities. They can raise their kids locally and contribute to our local economy all year round, not just at holiday time.

I live in a coastal village and I've seen small businesses in these small communities die when there are not enough permanent local families around to support them. Our tax changes will help young people and families in highly sought after lifestyle and investor property markets like Jervis Bay, Mollymook Beach and Batemans Bay buy their first home and live locally. These changes will mean more kids in our local schools, more workers for businesses and local services, more spending in local shops and cafes, and, of course, the opportunity to get involved in sporting, cultural and community organisations.

Unfortunately, there's a lot of misinformation being thrown around by the three right-wing parties, who do not want to help younger people get a roof over their heads and secure their future. The reality is that we're taking steps that have been talked about for a very long time, but only Labor has been brave enough to deliver. Since budget night, I've spoken to many people in Gilmore who are excited for these changes—excited for their kids, for their grandkids and for future generations.

You can imagine my surprise when I stopped at my local servo in Nowra a couple of weeks ago and one of the employees came up to me with a big smile on her face. She wanted to thank me and the Albanese Labor government for helping her purchase her first home through our five percent deposit scheme. I'm so proud that this government has already been able to help this young woman and more than 780 other first home buyers across Gilmore to get off that relentless roundabout and get the keys to their dream home sooner. Our expansion of the five per cent deposit scheme will help even more Australians buy their first home, with all regional first home buyers now having access to the scheme with no caps on places or incomes.

I was also delighted to receive another thank you last week following our budget announcement, this time from self-funded retirees in Kiama, who have welcomed Labor's tax reforms, including changes to trusts, negative gearing and capital gains tax. In an email, the couple said, 'We need to do everything we can to tip the scales in favour of homeownership over rental investments.' They urged me not to back down but to 'continue in favour of fairness and retirement security of the have-nots rather than the have-lots'. Amidst all the misinformation on social media and scaremongering by those opposite, it's really refreshing to see our older generations stepping up to back our plan to help young ones, their kids and their grandkids reach their dream of homeownership.

Finally, our focus is to address the huge challenge of housing supply and affordability in regional Australia and to ensure regions like Gilmore remain strong, connected and well-positioned to provide opportunities to those who want to live and work there.

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

This is the highest taxing budget in Australia's history. And why? Because government spending is at a 40-year high outside of the pandemic. Look, they're not spending it well enough for us to want to give them more. We see NDIS rorting, criminals stealing from the NDIS, and, instead of the government exposing it, it has to be two blokes on social media doorknocking in Western Sydney. We're spending $20 million on advertising on how people can pump up their tyres so they use less fuel. These are the types of programs that are being funded out of higher taxes on wage earners through bracket creep, small businesses through CGT and property owners through negative gearing. The PM has never seen an aspiration that he didn't want to crush. Under this budget, you take the risk, and the Prime Minister takes the reward. In this budget, if you earn an income, they tax you more; if you invest, they tax you more; if you build a business, they tax you more; and, if you're a young person, they'll tax you more.

Under this budget, young people are far worse off.

Dan Repacholi (Hunter, Australian Labor Party) Share this | Link to this | Hansard source

How?

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

Young people and the next generation—I just got asked how. Young people today will pay more income tax than I have ever paid. They will pay more income.

Government members interjecting—

It's not funny. Why do you think it's funny that young people will pay more income tax than I have ever paid? They will pay more capital gains tax than I have ever paid. It has just been doubled. I can continue to negatively gear my place while no young person will ever be able to negatively gear their place. How is that funny? How is that funny?

Government members interjecting—

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Order! Member for—

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

I would love to see you—

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Order!

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

They're interjecting. I have the call.

The DEPUTY SPEAKER:  Excuse me. I've just called for order because it is outrageous, the interjections coming from this side. And, if you would try to refrain from inviting that interjection, it would be very helpful as well.

If they didn't interject, Speaker, I wouldn't be responding to it.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Would you like to argue the toss a bit longer?

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

No—

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Then let's get on with the debate.

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

Good. Young people—that is how they're worse off. They're paying higher income tax than I ever did. They're paying double the CGT that I ever did. And they're never paying negative gearing—

A government member interjecting

That is why they are. I would love to hear the next speaker, whoever it is, explain those three points and why they're wrong. Explain to the Australian people, explain to young people, why they are going to pay higher taxes than I have ever paid and then gaslight them that it's in their interest. It's despicable how you can look young people in the face in your electorate when they're paying far higher taxes than you ever will.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Direct your comments through the chair to depersonalise this debate please.

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

It's despicable how these members look young people in the face in their electorate when they are paying higher taxes than they will ever pay. With bracket creep every year, taxes are going up. CGT is doubled. Anyone with money in ETFs or saving for a deposit will pay double than I have ever paid. It's not just young people; it's actually businesses as well. Businesses and young people will be worse off and taxed more. Why? Because we've got $1 trillion in debt. It will be young people who have to repay that $1 trillion.

Business woke up on Wednesday after the budget with a new cofounder owning 47 per cent of the business: the PM. It set off meme after meme, and, the next day, the PM described those memes as 'flattering'. How out of touch do you have to be to describe those memes as 'flattering'? Read the room.

Guess what? Australia's capital gains tax is the highest in the world. We have 47 per cent CGT. Do you know what it is in New Zealand? Zero per cent. Do you know what it is in Singapore? Zero per cent. But here's something for my comrades across the aisle to get excited about: in China, it's only 20 per cent. You beat communist China by 27 per cent; well done. In Soviet Russia, it was 11 to 23 per cent. You've beat Soviet Russia. We can't even find a communist nation with higher capital gains tax than us, and you guys think it's funny. I'll tell you what, Australia's businessowners don't think it's funny.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Please stop. Direct your comments through the chair. I'm not going to ask you again.

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

The members are interjecting and laughing, Deputy Speaker, and I find it very difficult, but they think it's funny.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Member for Cook, resume your seat. This is about the third time I've had to ask this in this five-minute debate. I do not want to hear more interjections from this side, I do not want to hear more interjections from this side, and I do not want to hear members deliberately provoking interjections in their commentary either. I asked you twice to refrain from doing that. The point of me asking you to direct your comments through me as the chair is to prevent this kind of behaviour from happening. I don't think anybody sitting up in this chamber gallery watching this debate right now thinks that this is a good discussion, okay? Let's get this back on track. I think you had about 10 seconds left.

Simon Kennedy (Cook, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

To those watching: I will fight for you, so you pay lower taxes. I will keep fighting, and I will not be deterred, because we need to hold this government to account.

Tania Lawrence (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

This budget takes pressure off Australians now by building a stronger and more productive economy for the future. Hasluck actually provides a really great example because Hasluck is a community of small businesses—it's the Lonely Cafe in Midland, providing great service and the absolute best cheesy ham toastie sandwiches; it's Framous Picture Framing on the Great Eastern Highway, making everything look better; it's Claire at Precision Hair, who makes me look better; it's Cyclowest Radiopharmaceuticals in Bayswater who are investing in new technology; and it's the very many tradies in Brabham, building new housing, buying tools, upgrading equipment and taking on apprentices. This budget backs them in practically and directly.

One of the most important measures for small business continued in this budget is the instant asset write-off. Eligible small businesses—those with a turnover of under $10 million—can immediately deduct the cost of assets costing under $20,000 instead of waiting for years to claim depreciation. I know, when I established my distillery prior to entering this place, that that really mattered. Knowing that businesses can have that certainty over the long term because we're making it permanent is a significant step, and it means that that courier business in Hazelmere can invest also in new equipment, the local mechanic in Midland can upgrade the tools and the small logistics operator just near my office can improve productivity immediately. In my electorate alone, there are over 12,000 small businesses that are eligible for this measure.

I also want to get to a little bit about what we've heard from those opposite and that really sticky AI slop that's out there. Around 90 per cent of small businesses will not be affected by the capital gains tax changes that are part of our reform agenda for this budget. The existing small business concessions will remain in place. If you've owned a business for 15 years and are retiring, for example, you can still pay zero capital gains. You can still reduce your gains by 50 per cent on active assets. You can still exclude up to $500,000 through the retirement exemption, and you can still defer CGT by reinvesting in another business asset. Those protections are still there.

We talk about saving, investing and taking risks to take on a new business. As it was for me in setting up my business, so it is for the people across Hasluck. These are not abstractions. These are my constituents, and they are asking for simple law reform and legislative reform changes for tax reform. They want stability. They want fairness, and they want a government that understands the pressures that they're under right now. This budget does exactly that. It provides cost-of-living relief for households, and that includes our fifth tax cut, which those opposite are likely not to support. That tax cut is, in effect, a pay rise for people working in those very businesses. That money can go towards the essentials, but it can also go to discretionary spend in those businesses. It supports economic growth by making it easier for businesses, and it helps them to invest and expand.

As the Prime Minister stated in question time today, the $3½ billion in the budget is in new measures that lower taxes for business to encourage investment, including the instant asset write-off that I mentioned, the permanent loss carry back, help for start-ups, incentives for venture capital and better targeting of the R&D tax incentive. As I said, 90 per cent of the small businesses in Australia are eligible for existing concessions on capital gains, and they remain eligible today. That's 90 per cent of those 12,000 businesses in my electorate of Hasluck.

The truth is that this MPI says more about the opposition than it does about this ambitious budget, because they're only offering the slogans, and they're joining in that sticky AI slop, instead of offering solutions. Everything they do these days seems to be truly motivated solely by trying to climb out of that very deep hole that they're sitting in with One Nation. It's a hole that they dug themselves when they should have been writing policy. So they talk about backing small business, but they don't. We'll see the truth of it on Thursday.

Ben Small (Forrest, Liberal Party, Shadow Assistant Minister for Electoral Matters) Share this | Link to this | Hansard source

I'll take the finger-waggling from the member for Hasluck about this MPI, which is about the rushed and damaging taxes on all Australians—those Australians who save more and will pay more tax, those Australians who invest and will pay more tax and those young Australians who take risks and will pay more tax under this budget of betrayal. Indeed, the member for Hasluck is right. It says a lot about the opposition that we will fight these taxes. We will fight these taxes until the very end.

The Prime Minister of Australia has become very fond of quoting people in this place. So I thought I'd enlighten the House with a couple of quotes from my own electorate. One constituent says:

the recent budget is appalling and has raised so many questions

This particular constituent goes on and says:

they are going too far and continue to—

I've got to stop there, Deputy Speaker, because this constituent has used a three-letter word starting with L, ending with E, and I won't break the standing orders.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

You are going very close.

Ben Small (Forrest, Liberal Party, Shadow Assistant Minister for Electoral Matters) Share this | Link to this | Hansard source

He says:

they are going too far and continue to—

I'll amend it slightly to 'break promises'—

to the Australian people (this is not the first time) …

It is taxing us more, holding people back, limiting desire to grow, creating more debt for future generations, won't solve the housing issue …

This constituent is far from lonely in my inbox. Another constituent says that the Treasurer said two years ago 'when multinationals pay less, individuals and domestic businesses pay more'. So this constituent Glenn asks why it is in 2026 that the Treasurer has got his large stick out for small businesses and is whacking them with a tax rate four times higher than the amount that multinationals are paying. Another constituent Ross says:

This Labor mob have announced in the budget that the 30% tax on taxable income only applies to Discretionary trusts. Not true if your fund grows in value, you pay 30% anyway in all … fund types. All—

I've got to stay away from that word, so I'll say 'porkies'.

That's not to say that this is the only assault on aspiration that we see. At the end of the day, the government is contemplating carving out the tech bros of Surry Hills, but our standard of living and our prosperity in this nation today depend on the dollars that flow from Western Australia's mining industry. Every dollar the Commonwealth spends on hospitals, submarines, pensions and pork-barrel train lines for the Victorian state government is underwritten by mining in WA. But the big holes that we see today spitting out cash began as little holes funded by mum-and-dad investors taking a punt 20, 30 or even 40 years ago. I'll put the productivity of those mines up against those in the member for Hunter's seat any day, like I will put our wine, our world-class wine from Margaret River, up against anywhere else in Australia.

At the end of the day, it is those mum-and-dad investors who were able to take a risk, who chose to save up and invest in a junior miner, that result in WA's net contribution to the Commonwealth today being more than $13,000 per person. It's 19 times higher than the next best contributor, New South Wales, which is chipping in 700 bucks a person. Every other state and territory in this nation has its hand out for a share of Western Australia's prosperity. But none of these mines or indeed the gas wells existed before Australians took a punt, put their hard earned capital on the line and backed a fledgling exploration company hoping to make it big. That is what we should be incentivising in Australia.

Junior explorers are, by definition, loss making for years. Investors accept that. They accept that 19 out of 20 exploration plays will return nothing but dirt. They tolerate that risk because of the upside. When the 20th one hits, this government is going after their capital gains in a way that they did not disclose before the election. They're taking a hammer to the CGT discount for investors and, indeed, those brave souls who start exploration companies. Why should these founders who hitch up a caravan, drive into the desert and risk everything to find the next great ore body be treated differently from the tech bros of Surry Hills whose factory floors are just the co-working spaces of Sydney? It is egregious, it is unfair and it is an assault on what makes this country great.

Renee Coffey (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

Across Griffith, people are working hard to build secure, decent lives. People are raising children, caring for parents, running small businesses, studying, renting, saving, working and contributing to our community. They are making careful choices about household budgets, and they want a government that understands those pressures. That's why this is a budget that delivers practical help now and responsible reform for the future. It strengthens Medicare and backs in workers, it supports small business, investment and innovation—we are strengthening our fuel supply chains—and it delivers the most significant tax reforms in more than a quarter of a century. These reforms are measured, targeted and responsible. They are about building a better, fairer and simpler tax system that works for more Australians, not just those who already have wealth behind them. We are delivering reform that takes our intergenerational responsibilities seriously.

This government will not leave younger Australians with a broken housing system—unlike those opposite. Housing is one of the biggest issues I hear about across Griffith. I hear it from young people who are working hard, saving carefully and doing everything they were told to help get ahead. They are studying, working extra shifts, building careers, starting families and putting money aside for a deposit all while paying rent in one of the toughest housing markets we have ever seen. Since 1999, housing prices have risen more than twice as fast as average full-time earnings. Between 2001 and 2021, the homeownership rate for households aged 25 to 34 declined by seven per cent. We know that the system is broken and is not working.

I will share some words from someone I have a lot of respect for, Scott Pape, the Barefoot Investor. He said of the current system:

The system lets wealthy families with good accountants pay less tax than nurses and tradies. That doesn't pass the pub test.

Someone else who I have quite a bit of time for—I might be the only one on this side of the House—is the shadow treasurer. I do co-chair a parliamentary friendship group with the shadow treasurer. I'm not going to win any friends on this side! This is good evidence for why we should give him a little bit of time. He has said, in his wisdom:

There is no intergenerational justice in such preferential arrangements.

I think most people on this side agree with that. He also did say in this place:

The tax system is screwing over young Australians.

Those opposite would leave this system untouched. They would leave younger Australians to keep falling further behind. They would tell first home buyers to work harder, save harder and wait longer while defending tax settings—we heard it this afternoon—that have helped push homeownership out of the reach for too many. Young Australians should not be left behind in a country they are helping to build.

From 1 July 2027, negative gearing for residential property will be limited to new builds. That means investments will be directed towards adding more homes to supply. People will still be able to invest in property. People will still be able to build wealth. New builds can continue to be negatively geared before and after 1 July 2027. Properties held before the budget night will be grandfathered. If someone has already made an investment decision under the existing rules, they can continue to negatively gear the property until it's sold. I think they are all really important items in this discussion to understand, because there is just so much fearmongering going on at the moment. This is careful, responsible policy design which protects existing investment decisions while making sure future tax settings better support housing supply, an issue that this government is absolutely committed to confronting head on.

We are also reforming the capital gains tax. The current 50 per cent discount was introduced in 1999. It does not accurately reflect inflation and, depending on returns as a result, that can overcompensate investors while also undercompensating others. Our reforms return to cost base indexation based on CPI, with a 30 per cent minimum tax on real capital gains. In plain terms, investors will not be taxed on inflationary gains; only their real gains. The reforms only apply to gains after 1 July 2027, and only when the gain is realised.

Those opposite would protect the status quo. Labor is building a fairer tax system, a stronger economy and a housing market that gives more Australians a chance to get ahead.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

The time for this discussion has now concluded.