Matt Smith (Leichhardt, Australian Labor Party) | Link to this | Hansard source

I love this country. I love what it means to be Australian. I love what it meant to me, when I was playing overseas, to hear the anthem and see the flag. I love driving up to this place in the morning, seeing Parliament House—the flag twice as large as a double-decker bus. I love coming into this place because of the opportunities that it provides and the opportunities that it affords us. In this place I sit next to a boilermaker who also happens to be a five-time Olympian. That's crazy. I see around me people from all different walks of life: social workers, sparkies, doctors, lawyers, teachers.

My parents were teachers. In 1981, just before I turned two, they bought their first house—they built their first house. My sister came home to that house. My first pet, a rabbit creatively named Rabbit, also came to that house, allegedly because my parents were too poor to afford birthday presents that year. But they built him a hutch. It wasn't very good, and Rabbit promptly ran away. Rabbit was replaced by other pets: Boy George, the border collie-Scotch collie cross; Sally, the labrador; Icky the cat; Deefa the cat; and Riva the cat.

Memories were created in that house. Like I said, my sister came home there. The place where I fell through the roof and then blamed it on the cat remains unfixed. The thump of the basketballs that I used to play with as a child reverberate through that home. They are still there. My posters are still on the wall—Michael Jordan, Magic Johnson, Dennis Rodman. Stickers populate the door. They should probably paint that; they have not. And now, because my parents are still in their own home, more memories have been created: my daughters squealing when the timed sprinklers went on and surprised them when they were three and five years old; my nephews going there as babies—hearing that newborn baby cry in the house; Christmases, with the smell of the pine tree cut down from out the front.

Those memories belong in that house and they belong to those people, because memories are more than just a single point in time. They grow and are added to, and they imbue the area in which they were made. That is not a house, to paraphrase The Castle; it's a home. It's my parents' home and it's been their home for 46 years, and everything that comes with it belongs to them.

I didn't have that opportunity. I rented a lot. I moved around a lot. The formative memories of my children playing monsters in the backyard—that backyard belongs to someone else. Making a fort in a living room to watch TV at night—that living room belongs to someone else. My daughters falling asleep on my lap because it's past their bedtime but I've let them watch Finding Nemo one more time—that different living room again belongs to someone else. I have those memories, but they are not refreshed every day, like my mother's memory is refreshed every day when she walks past my room and when she walks past the old toy box. That is something that I don't have, and it is something that I hope my children get to have. Should my daughters choose to have children, I want them to come home to their house, to grow up in their house, with their backyard, and that the little funerals that you have for pets as a child are able to be remembered, that all of those little things that go into the woodwork and seep into the carpet, and the smells, the sounds and the creaks all remind them every day of the life they have built in their home. That's what this is all about: levelling the playing field, giving people the opportunity to develop that life that my parents have loved and enjoyed, the one that I slightly missed out on, the one that I want my daughters to have.

That's why this is so important: 75,000 houses. And we're seeing that investment right now: $140 million for trunk infrastructure just south of Cairns, where 13,000 homes will one day be built, where Christmases will happen, where grandparents will meet their grandchildren for the first time. The best and the worst of life will happen there, but you'll have that sanctum, that protection, that part of Australia that makes it yours—your own home.

The status quo was no longer working. That should not be a debate. That is a fact. We know it to be a fact because we keep hearing about first home buyers, young people priced out of the market, giving up hope, believing that they are never, ever going to achieve the great Australian dream, that they're not going to have the Hills hoist in the backyard, that they're not going to be able to play cricket with the kids, because it's going to be somebody else's. Don't you want to give that back? Don't you want to give young Australians that opportunity? Don't you want to present them with that pride that they'll get from having their own home?

It takes courage to make changes. This government is showing that courage—the courage to reach our hands out and say: 'We hear you. We understand. And the playing field will be levelled.' We want people to build homes. We want people to invest in property, but to make that a new property, to add to the supply. You can negatively gear. You can use the same CGT. You just have to build a new home. As I said, there are about to be 13,000 of them, just south of Cairns, 5,000 reserved for first home buyers and 8.000 for investors, if you want them. This is going to mean that Australia is given back to everybody, that everyone gets that chance, everyone gets that opportunity, because it's really only opportunity that we are fighting for. What you do with that opportunity is up to you, but you need to be able to reach it, and for too long it was slipping out of grasp, further and further away.

Prior to these changes, it could take up to 20 years to save for a deposit. If you start seriously saving for a deposit at 25 and nothing goes wrong, you'll be fractionally younger than I am now when you get your first home deposit. That's crazy. My parents had paid off their house by the time I was 15—it's a great house—and then they got to get on with the rest of their lives. They could salary sacrifice to ensure that their super was large enough that they could enjoy retirement. They're not going to be paying off a house until they're 65 or 70 years old. They got to live the best versions of themselves, and they got to do that because they were able to buy a house when they were young and it was affordable. This government wants that for everybody.

But there's more than that. We're reducing the tax burden for more than 13 million workers. That's five tax cuts that this Anthony Albanese Labor government has put in—five, not just a slightly-above-mediocre boy band from the early 2000s but a ringing endorsement of the faith we have in Australian workers that they deserve to keep more of what they earn in their pocket to be what they want to be, to spend how they want to spend. And they want to spend on housing. That is overwhelmingly what we're told, every single day, at every doorknock, at every phone bank, in every community office. And I know I'm not speaking just for myself but for right across the country: 'You've got to do something about the housing. I'm concerned about my children. I'm concerned about my grandchildren. It doesn't seem fair. How are they ever going to get their foot in the door?'

We are creating those spaces. We are creating that opportunity. There is no greater purpose of a government than to create opportunity for the next generation. It is our absolute responsibility in this place to find a way to get that hope back, because hope drives aspiration, aspiration drives wealth and all of that is interconnected, intertwined. We've snatched away, over successive governments, over many decades, that spark of hope—that part that says, 'This is mine.' Ownership is important. Place is important. Sense of belonging is important. And that can occur through homeownership. People will have children. People will create memories. It is everything that the Australian dream suggests.

This is not an easy change. We acknowledge that, but it had to be done. The time had expired on locking out the younger generation. Jokes about avocado and toast do not cut it. The only thing that makes a difference is presenting that chance. Five per cent deposits are a huge part of that. The raft of cost-of-living measures that have been rolled out and opposed by those opposite make a difference. You chip away at the boulder to make it more liftable, to make it more achievable.

This is something that I will remember being a part of. This is the day that this House and this government get a chance to let young people back into the game, give them the hope that we had and give them the opportunity that we've enjoyed to hopefully have a rabbit hutch that the rabbit cannot run away from. These make a difference. We make a difference.

By opposing these measures, you oppose the tax cuts. By opposing these measures, you oppose opportunity. It means that we're not listening. If you stand against young people trying to get in their first homes, after every community office you've done, every phone bank you've done and every meeting you've had where someone has sat down and said, 'The answer is housing,' it means you've failed.

I will not leave here having failed. I will leave here knowing that my children have an opportunity to own their own home—that my grandchildren will create memories in a place that is theirs and that they will not be moved around from place to place. I lived in five different homes in two years because I was renting. That was hard for my girls. It was hard for us to create memories. I don't want that for them. I don't want that for anybody. I want everyone to be secure and safe in their own home. That is what this budget has always been about: delivering the great Australian dream.

Michelle Landry (Capricornia, National Party) | Link to this | Hansard source

I rise today to speak on tax reform. For families and small businesses in Capricornia, this is not an abstract debate in Canberra; it's about whether people who work hard can get ahead, whether a pay rise still means something at the kitchen table and whether regional Australians are rewarded for effort or punished for it.

Across Central Queensland, people are doing everything right, but they feel like they are running harder just to stand still. This is the reality of Labor's economy, and that is why this debate matters. In Rockhampton, Yeppoon, Emu Park, Sarina, Mirani, Moranbah and Dysart, people are not asking for more spin. They are asking for relief. They are asking why every time they get ahead a little, Canberra reaches further into their pockets. They ask why families who save are treated as a revenue source, why renters are hit with higher costs, why first home buyers are being priced out and why small businesses are expected to carry more of the load. Labor's answer is always the same: more tax, more complexity and more excuses. The coalition's answer is different. We believe that people who work hard, save hard and take risks should be backed, not bled dry. Bracket creep is one of the clearest examples. Australians understand it because they live it. Inflation pushes wages up on paper. Workers move into a higher tax bracket, and the government takes a bigger slice, even though their buying power has barely improved. It is a quiet tax hike built into the system, and Labor relies on it. Labor says it wants to help with the cost of living, while benefiting when inflation drags workers into higher tax over time. This is not fairness. It is government balancing its books on the backs of people trying to keep up.

The coalition's approach is the opposite. We believe the tax system should reward work not punish it. That is why the coalition's tax-back guarantee would index income tax thresholds to inflation so Australians are not taxed more simply because prices have gone up. It is a structural reform not a temporary patch. It would protect around 85 per cent of income earners from 2028-29, with a relief of about $250 in year 1, growing to more than $1,000 a year by year 4, before extending to all taxpayers. Labor's model said government should quietly benefit when workers are dragged into higher tax brackets. The coalition's model says that, if Australians earn more because prices have risen, they should keep more of what they earn.

This is the difference between a government that manages decline and an opposition that wants to restore reward for effort. Let us be clear. The bill includes the working Australians tax offset and the $1,000 standard deduction. The coalition supports those measures, but they sit beside a much bigger agenda of higher taxes on savings, investment and enterprise. Schedule 1 changes capital gains tax. Schedule 2 changes negative gearing, and buried in the broader agenda is a tax hit on family savings and discretionary trusts. This is Labor's pattern: give a little with one hand and take much more with the other. Labor offers a headline-friendly offset while designing a tax system that reaches deeper into people's futures. The coalition will support genuine relief, but we will not pretend these small sweeteners cancel out the wider assault on aspiration.

This is the fundamental difference between Labor and the coalition. Labor sees the economy from the top down—more tax, more redistribution and more dependence on government. The coalition sees it from the ground up, built by workers, families, investors, small business owners and self-starters who take risks and create opportunity. Labor's instinct is to tax the very behaviour Australia needs more of savings, investing, building and backing yourself. The coalition's instinct is to remove barriers, reward effort and create the conditions for growth. Labor manages decline. The coalition backs aspiration.

For the people I represent in Capricornia, that difference is not theoretical. It is the worker in a mining camp doing overtime and seeing more of it disappear. It's the nurse or aged-care worker picking up extra shifts because the bills do not stop. It is a tradie paying more for fuel, materials and insurance. It is the cafe owner on the Capricornia coast working weekends just to keep the doors open. It's the family in Rockhampton looking at a pay rise and realising it still will not stretch far enough, because groceries, power, rent and mortgage repayments have all gone up. Labor's answer is more intervention and more tax. The coalition's answer is to restore the confidence that work will pay, saving will matter and enterprise will be worth the risk.

The contrast is just as stark on housing. Labor says its tax changes are about fairness and first home buyers, but the government's own material points in the opposite direction—fewer incentives to invest, lower confidence and fewer homes. When you tax something, you get less of it. If you tax housing investment more heavily, you get less housing investment. Restrict negative gearing and change the capital gains rules at the same time, and you do not create affordability. You shake confidence, reduce supply and tighten the market. Labor recalls that reform. In reality, it is a wrecking ball through the very investment that helps deliver rental stock and new housing. The coalition's position is straightforward. We oppose the capital gains tax changes and the negative gearing changes. If these measures become law under Labor, a coalition government will repeal them.

Repeal is only part of the answer. We also need common sense on housing and migration, investment in enabling infrastructure and a clear focus on supply rather than punishment. When governments get housing policy wrong, renters and young Australians cop it first. Labor talks about intergenerational fairness, but young people are being hit from every angle. They rent for longer, face higher rents when investment leaves the market, and then cop a bigger tax hit when they try to build a deposit. That is not fairness; that is intergenerational betrayal.

The same contrast runs through small business policy. Across Capricornia, small businesses are under enormous pressure. They are battling higher insurance, freight wages, rent, power bills and input costs, and many are still rebuilding confidence after years of strain. But Labor still sees a chance to take more. These tax changes reach into the retirement plans, succession plans and investment decisions of the people who have done the hard work, taken the risks and employed local people. In regional Australia, a small business is often a family's life savings. It's their retirement plan. It's their legacy. It's the first job for young people in the community. Labor says the government is entitled to a bigger stake of that.

The coalition says a life's work should be respected, not raided. The coalition's alternative is to back the self-starters, not punish them with lower, simpler and more predictable tax settings. That includes making the $50,000 instant asset write-off permanent for eligible small businesses so that when a tradie buys a ute, a cafe upgrades equipment or a contractor invests in tools, they can grow with confidence. It also means backing startups and entrepreneurs rather than treating them as an easy source of revenue in an economy increasingly shaped by technology and innovation. Australia should be attracting ambitious founders and skilled workers, not driving them offshore by taxing risk and claiming the upside.

The coalition wants an economy that rewards initiative. Labor is building one that punishes it. At its core, this debate is about what kind of country we want to be—one where government sees every pay rise, every investment gain, every family asset and every small business success as another opportunity to tax; or one that still believes in aspiration, reward for effort and the idea that, if you work hard, save, invest and build something, you should be able to get ahead. Labor's approach is built on broken promises, higher taxes and the belief that government should always take more. The coalition's alternative is lower taxes, lower inflation, and an economy designed to back the self-starters of this nation, not kneecap them.

We will fight these toxic taxes tooth and nail. We support relief where it's genuine, but we reject the broader tax raid on families, renters, first home buyers, small businesses and young Australians. In Capricornia, people do not want carve-outs for bad policy. They want a government that trusts them, backs them and gets out of their way. The people of Central Queensland know the value of hard work, self-reliance and backing yourself. They deserve a tax system and an economy that reflects those values, and the coalition will always stand for an Australia where effort is rewarded, aspiration is encouraged, and the next generation is given more opportunity, not less.

Trish Cook (Bullwinkel, Australian Labor Party) | Link to this | Hansard source

I rise today to speak in strong support of the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026. This legislation represents one of the most significant and forward-looking tax reform packages in more than a generation. At its heart, it's about building a tax system and an economy that works in the interests of more Australians. It's about fairness, aspiration and responsibility. It's about ensuring that we look to the future and that we're not leaving difficult structural problems for the next generation to fix.

The Albanese Labor government is delivering a new round of tax cuts, helping more Australians achieve the dream of homeownership and supporting investment and innovation. This package is pro-worker, pro-investment, and pro-aspiration. It is designed with a clear purpose to make the system simpler, fairer and more sustainable. Through these reforms, we are reducing the tax burden for 13 million workers. We're supporting around 75,000 more Australians into homeownership. We're delivering $3.5 billion in new measures to support businesses and startups and cutting compliance costs by around $540 million every year. This legislation builds on our government's record of responsible economic management. It ensures that the revenue raised is returned to workers and businesses in the near term while improving the sustainability of the budget over the medium term. These reforms are sensible, thoughtful, balanced and necessary. They address the distortions that have built up over decades while supporting growth and opportunity across the economy.

I want to turn to schedules 1 and 2 of the legislation—reforms to negative gearing and the capital gains tax. These are important changes as they go to one of the most pressing challenges that we face as a nation—housing affordability. For too long, the current tax settings have locked out many Australians from owning their own home, particularly young Australians. The existing system has incentivised investment in established properties, and that investment is over the new housing supply, so it's contributed to rising prices and reduced accessibility. This legislation addresses that. It limits negative gearing for residential properties to only new builds for properties purchased after budget night, with changes taking effect from 1 July 2027. Importantly, these changes are grandfathered, meaning that Australians who currently own investment properties or negatively gear will not be affected. This is a targeted reform. It does not punish existing investors. Instead, it redirects future investors with future incentives in new builds. It encourages investment where it is most needed, and we all know that is in new housing supply. By doing so, it is expected to support around 75,000 Australians into homeownership over the next decade. This is about opening the door to homeownership for more Australians.

Alongside this, the legislation reforms capital gains tax arrangements. From 1 July 2027, we are replacing the blanket 50 per cent discount with a system of cost base indexation paired with a 30 per cent minimum tax. This is a sensible and measured reform. It restores the system to its original intent, ensuring that investors are taxed on real gains and not inflationary gains. It also reduces the distortion in investment decisions. Under the current settings, investments have been skewed towards assets that benefit most from tax concessions, particularly established housing, and these distortions have had wide-ranging consequences for both housing affordability and economic efficiency. By applying these reforms consistently across asset classes, we avoid creating new distortions. We are creating a more neutral system, one that directs investment towards where it earns the best real return, not the greatest tax advantage. Importantly, these changes preserve existing small business capital gains tax concessions. The vast majority of small businesses will continue to benefit from reduced or zero capital gains tax when they sell. We are also consulting carefully on how these reforms will apply to startups and businesses with low or zero cost bases, because we recognise the important role that they play in our economy. These changes strike the right balance. They improve fairness, support housing supply and enhance productivity.

I now turn to schedule 3, the introduction of the working Australians tax offset. This is a new, permanent structural improvement to our tax system. From the 2027-28 income year, it will provide a $250 tax offset to Australians that are earning income from work. More than 13 million Australian workers will benefit. This is a straightforward measure with a powerful impact. It recognises a simple truth: for most Australians, particularly young Australians, income comes from work, and the tax system should reflect that. It will effectively increase the tax-free threshold for workers, boosting it to nearly $20,000, or close to $25,000 for those eligible for the low-income tax offset. Combined with our previous tax cuts and other measures in this package, this will benefit the average worker by almost $3,000 by 2028. This is real cost of living relief. It helps workers keep more of what they earn, it encourages workforce participation and it supports aspiration, because people should be rewarded for their efforts.

Importantly, this measure is not temporary. It is a permanent improvement to the structure of the tax system. It is particularly significant for younger Australians. Millennials and gen Zs are expected to make up around two-thirds of the beneficiaries. This is a practical way of giving back to the next generation, helping them to get ahead, save and build for their future.

Schedule 4 of the legislation introduces another practical and impactful reform: a $1,000 instant tax deduction for work related expenses. This measure delivers on our election commitment to make tax simpler, faster and fairer. Each year, millions of Australians spend time and money gathering receipts and navigating complex rules to claim work related deductions. These reforms cut through that complexity. Workers will be able to claim an automatic $1,000 deduction—no paperwork required. For those with higher expenses, the option remains to claim actual costs. This measure is expected to deliver, to around 6.2 million workers in the first year, an average tax saving of around $205. It comes with another important benefit: it reduces compliance costs by an estimated $380 million annually. That is time and money that is back in the pockets of Australians. It is a reform that recognises the value of people's time and makes everyday interactions with the tax system easier and more efficient.

These measures do not stand alone. They form part of our broader strategy to strengthen the economy, improve productivity and ensure long-term fiscal sustainability. We are delivering these reforms whilst managing the budget responsibly, making substantial expenditure savings, strengthening Medicare, securing our fuel supplies and providing cost-of-living relief to Australians. We are also supporting investment through a broader productivity agenda, by cutting red tape and reducing regulatory costs by more than $10 billion per year.

Responsible economic management is about making choices, and it's about balancing support today with sustainability tomorrow. This legislation reflects that balance. At its core, this tax-reform package is about intergenerational fairness. For too long, structural issues in our tax system have been allowed to persist—issues that distort markets, entrench inequality and place increasing pressure on younger Australians. This government is taking those challenges very seriously. We are not deferring them. We are addressing them. We are ensuring that our tax system is fit for purpose, not just for today but for decades ahead. We are creating a system that supports aspiration, rewards work and directs investment to where it is most productive. We are doing so in a measured and responsible way, providing certainty through staged implementation and ongoing consultation on the more complex elements. This approach reflects best practice.

This legislation represents meaningful reform. It delivers tax relief to millions of workers. It supports more Australians into homeownership. It encourages investment where it is most needed. And it simplifies the tax system and reduces compliance costs. It does all this while strengthening the sustainability of our budget and economy. This is what responsible government looks like. This is what reform in the national interest looks like. These reforms are the reforms that make our economy work better for more Australians. I commend this bill to the House.

Kate Chaney (Curtin, Independent) | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. These two bills do four things. They reform capital gains tax, replacing the 50 per cent CGT discount with cost base indexation and introducing a 30 per cent minimum tax, which will apply from 1 July 2027. They limit negative gearing for residential property to new builds from July 2027, grandfathering existing investments. They introduce the working Australian tax offset, which will provide all working Australians with $250 a year from 1 July 2027, and they provide a $1,000 standard deduction for work related expenses for all wage earners.

I support 3½ out of these four measures. I've called for reforms to tax concessions granted to property investors since I was elected in 2022. I've called for income tax cuts, but I do not support the proposed CGT reforms beyond property. I want to support this bill, but I cannot in its current form. It's vital that we get these bills right. If this reform is rushed or legislated with known design flaws, it will make the next round of reform harder. It will hand ammunition to those who want to wind it back. Reforms that aren't properly debated and don't carry public legitimacy tend not to survive.

There's a lot of good in this package. I support limiting negative gearing changes to new builds to incentivise housing supply. This addresses a structural distortion that economists and housing researchers have consistently identified. For too long, these settings have tilted the playing field in favour of investors and against first home buyers, subsidising those who already own property at the expense of those trying to get their foot in the door. This reform corrects that. It's prospective and it grandfathers existing investments. Some might say the grandfathering is too generous, but, given that more than half of investment properties are only negatively geared for four to five years, it will taper off.

I support the CGT changes as they apply to housing. That is the decision to retain the 50 per cent CGT discount for investment in new residential builds, while replacing the discount with an indexed model so only real gains are taxed for existing residential property. This is the right companion measure to the negative gearing changes. Together they address the same underlying distortion—tax settings that have channelled investment into existing housing at the expense of new supply and first home buyers.

The CGT discount, in the context of residential property, has not been building broad prosperity; it's been concentrating advantage among high-income investors at the expense of those trying to buy their first home. More than 80 per cent of the benefit of the current CGT discount goes to the top 10 per cent of income earners, and it's right to correct that specific distortion. I think that there's community support for reforming negative gearing and CGT for property. There's a broad consensus that we need to move away from being a country where housing is an investment to accumulate wealth and towards a country where housing is available and affordable for everyone.

In two community consultations over the last two years, I've found that those in my community of Curtin who've participated are strongly supportive of reforming these tax concessions for housing, despite being amongst some of the greatest beneficiaries of the current system. This is why I've fought for reform to the tax concessions for housing investors and why I'm so pleased to see this reflected in the budget and in these bills.

I support the working Australian tax offset. To be clear, at $250 a year, it doesn't come close to addressing bracket creep—the steady, invisible process by which inflation pushes wage earners into higher marginal tax rates year after year—but it moves in the right direction, towards reducing income taxes, and workers will welcome it. It should go further, but it's directionally correct.

I support the $1,000 standard deduction for work related expenses. It reduces the compliance burden for millions of Australians, frees up ATO audit resources and is the kind of sensible simplification that should have happened years ago. But I cannot support these bills in their current form, because the government has chosen to extend the CGT reforms beyond housing to all other assets like businesses and shares. Changes to the CGT regime for housing have been socialised. I and others have been talking about this for years, and most of the concerned feedback I've had from constituents since the budget has not been about housing; the case has been made. But the case has not been made for changes to CGT for other asset classes. The government argues that this is needed to create an even taxation landscape. I understand and support this aim in principle. Ideally, investment decisions are made because of economic factors, not tax regimes. There is always a risk that we replace one tax distortion with another. But the tax landscape already has a range of distortions, including for new properties and small businesses, and most are there for a reason.

I support the changes announced in the budget to support small businesses—the loss carry back and loss refundability and instant asset write-off—which will help small businesses with cash flow in the early years, and I back the industry proposal to increase the turnover threshold for small businesses. But I share the concern of my constituent Angus. He told me:

my concern is the breadth of the application. Extending CGT changes to shares, private businesses and other productive assets risks penalising exactly the behaviour we should be encouraging: Australians taking genuine economic risk to build something.

At a time when productivity is a huge concern, we must drive more investment in productive, high-growth assets—ambitious businesses and startups—and risk-taking that can deliver returns for the economy. With the proposed indexing model for CGT, lower growth assets will be relatively more attractive than higher growth assets. That will not incentivise behaviours that contribute to getting us out of our productivity rut. Is this a distortion? Well, maybe it is, but it could also be called a lever to encourage the type of investment we need to protect our future prosperity.

If we were seeing significant cuts to personal income tax, there would be more of a case for extending this CGT reform to other asset classes. We do need to shift more tax burden from workers to wealth over the long term. Passive wealth should not be taxed more favourably than the income of working Australians. But the WATO is hardly a meaningful reduction in the personal tax burden. The government has hinted at future tax cuts, but a future promise is not reasonable justification to pass flawed legislation today.

The best way to shift some of the tax burden from active to passive income would be through the proper indexation of tax brackets, something I've argued for since I was elected in 2022. It's not coherent to index capital gains while simultaneously allowing bracket creep to push wage earners into higher marginal rates year after year through the same inflationary mechanism. Both problems have the same cause. A comprehensive approach to tax reform would address both. I've raised this with the Treasurer, but this principle has not been addressed in these bills.

I move:

That all words after "House" be omitted with a view to substituting the following words:

"does not decline to give the bill a second reading but:

(1) notes that:

(a) while there is community support for reforming the capital gains tax (CGT) discount for property, the Government has not made a strong case as to why the reforms should extend beyond property to other assets;

(b) the proposed CGT reforms beyond property will discourage investment in the most productive and high-growth assets, like successful start-ups, businesses and shares; and

(c) while the Government's aim to build an even tax landscape is sensible, it must not come at the cost of a productive and dynamic economy, nor our ecosystem of start-ups and small businesses; and

(2) calls on the government to restrict the CGT reforms to property, or, at minimum, ensure there is a comprehensive public consultation and inquiry process to assess the impacts of the broader CGT reforms on our economy, productivity and business community".

This amendment limits the indexing approach to the CGT discount to housing so the current CGT discount settings remain in relation to other investment classes. With this amendment, I believe the government will have a mandate to make a difficult long-term change that's needed to level the playing field on housing without a broad range of unintended consequences, particularly for productivity.

Yes, there may be some complexities. I can see that residential properties might be purchased through a company structure to circumvent the CGT changes for housing. There will always be loopholes that need to be addressed, but it would be better to deal with those loopholes head on than to create a huge raft of new problems.

If the government is not yet in a position to agree to this amendment, then the least it could do is to slow the process down to understand the implications of these broad CGT changes. There's been very little consideration of reforming CGT beyond property, either in the community or amongst economists and civil society. The media have reported that the decision to extend the CGT reforms beyond property was made on the basis of Treasury advice less than one month before the budget. There's a short Senate inquiry, but legislation of this significance warrants a far more public and rigorous process. Twenty-five days from referral to report will not be enough time to receive meaningful public submissions, conduct expert hearings, examine the interaction effects with superannuation and business investment or probe the unanswered design questions that the government itself has acknowledged remain open.

Compare this to the 1999 CGT reforms, which were reforms of comparable significance. That process involved an independent review body, in the Ralph review; two public discussion papers; more than 300 public submissions; seminars in every state capital; 31 focus groups; draft legislation released for consultation; and then a Senate committee inquiry on top of all that. From establishment to legislation, the process ran approximately 12 to 14 months, not 25 days. Good process is not procedural tidiness. It's how you build the public legitimacy that makes reform durable. It's how you surface unintended consequences before they're locked into law. It's how the government gets the opportunity to justify the choices it's making. This reform needs that justification.

The government seems to think that crashing through is the best approach—that consultation will just give the haters time to build their campaigns—but this is the hard work of developing policy: actually listening and recognising that you might not always have the right answers upfront and that legislation can always be improved. We used to have a process of green papers and white papers, where governments opened up discussion by publicly identifying an issue, signalled their approach, published exposure drafts, listened to feedback, made improvements and then passed legislation. Now it seems to be legislation by stealth.

It takes confidence to genuinely seek feedback, and there are lots of unanswered questions. What will these changes mean for ordinary Australians building wealth through the share market? The only analysis that exists has come from industry bodies with an obvious interest in the outcome. Does the 30 per cent minimum tax, combined with indexation, produce fair outcomes across different asset classes and different investor profiles? Should capital losses be indexed to inflation? These are questions that need to be answered, and a 25-day inquiry will not be sufficient.

There are particularly difficult questions about the impact of these reforms on startups and high-growth assets. The government has acknowledged that there's a problem here but is asking the House to wave through this legislation and trust it to sort it out later. Unfortunately, that trust has not been earned. The proposed CGT reforms will have the most immediate and material impact on startups. These businesses will be taxed on almost all their gains because the inflationary proportion of their gain is calculated on a very low base. Australia cannot afford to discourage the investment that drives innovation and jobs. Early-stage high-growth businesses must not become collateral damage in a reform aimed at a very different problem.

I've pressed the government on this since budget night, writing to the Treasurer and raising it directly in this House at the first opportunity and on several occasions. The Treasurer and Assistant Treasurer are consulting on a carve-out for early-stage businesses, and I welcome that, but commitments are not legislation. The bills before us today contain no carve-outs for founders, investors or early employees with near-zero cost bases. They contain no mechanism for spreading gains over multiple years. The government is consulting, but there is no answer yet, and the 25-day Senate inquiry will close before that consultation is complete. Asking parliament to pass these bills now on the promise that the hard design questions will be resolved later is asking us to legislate to create a known problem and fix it afterwards. On a question with this much consequence for Australia's innovation economy and our productivity challenge, that's not good enough. The government should not bring a bill to the House that it knows requires immediate amendment.

I came to this parliament calling for exactly the kind of housing tax reform contained in this package. I welcome it. I support the negative gearing changes. I support the WATO as a first step towards reducing the tax burden on working Australians. I support the standard deduction, but I cannot support the extension of CGT changes beyond housing at this point. If the government wants to undertake tax reform that will last, it must build the case for it through a proper consultation process. It recognises that carve-outs are needed for startups. Eligibility will be complicated. The case has been made for CGT reform on housing, but beyond that the case has not been made. The easiest carve-out at this stage would be for all non-housing assets, and the best way to build the public's trust that this is part of a plan to ensure our tax system is fit for purpose in the longer term would be to include meaningful personal income tax cuts in this package, not $250 per person with ministerial discretion.

We need to take the time and get it right, otherwise future tax reform will only be harder.

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

Is the amendment seconded?

Allegra Spender (Wentworth, Independent) | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Madonna Jarrett (Brisbane, Australian Labor Party) | Link to this | Hansard source

For too long, Australia's tax system has more generously rewarded wealth than work. For too long a nurse working nights, a teacher buying classroom supplies, a tradie leaving home before dawn or a retail worker struggling with rising rents have paid a greater share of their income in tax than people making large gains from property and passive investments. That's simply not fair. Right now, it's also simply too tough to get into the housing market—ask Angus and Nick from my electorate.

It's so different to when I grew up. Dad was the only wage earner, yet he and mum could afford to buy a house for us kids—eight kids and a few foster kids. It was a small worker's cottage, but it was my security and my home. It was where I painted walls when mum and dad were out, where we shared the yard with the dogs Benji and Tina and even played cricket with a few neighbours, breaking a few windows in the process.

But the Albanese government is making some big changes. We've delivered tax cuts for all working Australians and we're now taking steps towards building a fairer economy, one where hard work is rewarded and where the dream of homeownership is not permanently pushed out of reach for our younger generation. Every Australian taxpayer will pay less, with the greatest proportional benefits flowing to low- and middle-income earners.

By reducing tax rates in the lowest brackets, Labor has recognised a simple truth: when ordinary Australians are doing it tough, governments should help put more money into their back pockets. The working Australians tax offset, one item in this bill, will provide a permanent tax offset for up to $250 every year for over 13 million Australians from the 2027-28 financial year.

This bill also delivers on our commitment to introduce a $1,000 instant tax deduction from the 2026-27 year. Workers can still claim other non-work related deductions such as charitable donations or super contributions, union and professional association membership fees et cetera. This is designed to help make the tax system simpler for millions of workers.

This is responsible tax relief targeted at working people. It represents the most meaningful permanent increase to effective tax-free threshold since Labor last increased it more than a decade ago. Around 6.2 million people will benefit, with the average worker receiving an extra $205 at tax time. More than a quarter of those who will benefit will be under the age of 30 and more than half of them will be women.

This Labor government is now cutting income tax five times in three different ways. We've already delivered tax cuts to every single Australian taxpayer by bringing rates down and pushing thresholds up. Another tax cut will commence on 1 July, in just a few weeks, and another on 1 July next year. Together with the new tax relief in this bill, the average Australian worker will receive a combined benefit of up to $2,800 in 2028. This isn't small bickies. It's almost $3,000—over a month of the average rent in Brisbane.

In my first speech to this House, I spoke of one of the biggest challenges facing leaders right now being intergenerational inequality, especially in housing. Every one of us in this chamber should be motivated to provide at least the same opportunities and aspirations to the younger generations as we had, to deliver fairness and the dream of owning your own home. That's what these bills are about. I talk to so many people across the Brisbane community: parents, students, young professionals and many more, and all want to see a better future for themselves, the next generation. But what I also hear is, 'We are working hard, it's tough to get ahead, and the system is not working for us.' And they're right. The status quo is not working, especially regarding the big Australian dream to own your own home.

Australia cannot solve the cost-of-living crisis or the housing crisis without addressing the way our tax system has deliberately encouraged investment to flow into existing assets rather than towards productive economic activity. For decades, generous capital gains tax concessions have distorted wealth creation and investment. We've heard it in this House. The current system allows investors to receive a 50 per cent discount on capital gains regardless of whether those gains come from genuine economic growth or are simply arising because asset prices have risen due to inflation.

Labor's reforms seek to restore the original principle: tax real gains, not inflationary gains. Under the model, capital gains will be adjusted for inflation, rather than adopting a blanket discount. This is not radical. This is common sense. If a worker pays taxes on their wages earned through effort and productivity, why should someone else who is making a financial gain from appreciating assets receive a larger tax preference? Labor's reforms are about balance. They are about ensuring that the tax system serves the entire nation, not just those fortunate enough to already own multiple investment assets.

The proposed changes to capital gains tax and negative gearing are also, though, about housing affordability. Right now it's too hard for many Australians to get into the housing market and get ahead. As I said, I hear this daily from young people, mums, dads and grandparents. House prices have risen by 400 per cent over the last two decades or so. They've gone from four to eight times people's income over the past 20 years, and ownership is down by seven per cent for young people. In Brisbane alone, the median house price has risen by $173,500 in 12 months. That's almost three times the average Queenslander's take-home pay. So it's no surprise that just 44 per cent of Australians aged 25 to 34 own a home of their own.

Our reforms are designed to help level the playing field for first home buyers and encourage investment flows to where it's most productive, including new housing supply. There are so many stories of young people lining up to buy their first home only to be pushed out by investors that have a tax advantage on their side. Where's the fairness in that? Labor is seeking to redirect investment towards new housing construction rather than speculative bidding wars over existing homes. By encouraging investment in new builds, these reforms can support housing supply while easing pressure on first home buyers.

Critics may say that these reforms will punish success. They don't. On this side of the House we do believe that success should be rewarded, that entrepreneurs should be rewarded, that small businesses should be rewarded, that people who take risks and create jobs should be rewarded. These changes still reward success, but not at a rate that far outstrips those who get a pay packet every week and not at the expense of rewarding productive investment.

The Barefoot Investor has offered some commentary on the reforms, saying, 'The system lets wealthy families with good accountants pay less tax than nurses and tradies.' To me, that just doesn't pass the pub test. Dr Tom Hird, an economist and founder of CEG Asia-Pacific, said in a recent article:

Of course, business owners take risks. I did. Businesses fail, clients disappear, employees have to be paid before owners are paid.

But risk is not a magic word that justifies any level of tax concession. The question is not whether the tax system should have concessions for entrepreneurs that salaried employees don't receive. I happen to think that it should. But does 12 to 20 per cent tax on $1 million strike the right balance?

If you think 30 per cent is closer to the right balance then you should be applauding the government's budget

Deputy Speaker, you would also have seen many posts going around the internet saying that with these changes the government is becoming a lazy partner in business. But ask a simple question: compared with who? Compared with a nurse or an engineer, whose income is taxed before it even hits their bank account, or compared with their own employees, many of whom will pay more tax than the business owner? The truth is that people like Dr Tim Hird have done very well out of the current system. As he said:

We have played by the rules. But we should not confuse playing by the rules with the rules being economically sensible—let alone fair.

This is sensible commentary from those who understand that these changes are fundamentally about fairness.

We are presenting the elements in these bills together not just because they're related, but because one part helps fund the other. Changes to capital gains and negative gearing will help pay for the tax cuts for all Australian workers.

This is the first tranche of legislation. There'll be more on specific implementation details in other parts of our tax-reform package. Legislating significant reforms in tranches is a standard approach, consistent with how other governments have undertaken tax reform, and it's appropriate to ensure core policy features that apply broadly to most taxpayers are in place first. As outlined in the budget, the government is consulting with stakeholders on the treatment of capital gains of small and start-up businesses, where indexation is applied to a low or zero cost base.

A modern economy grows when capital flows into businesses, innovation, manufacturing, renewable energy, technology and housing construction, not when tax settings overwhelmingly favour the accumulation of existing assets. These reforms are really about intergenerational fairness. Many Australians are working harder than ever, studying longer than previous generations and carry larger debts, yet they feel further away from the dream of owning their own home—further away than their parents ever did. There's a reason for this. The current system is skewed against everyday workers: bankers, electricians, plumbers, cleaners, nurses, teachers and more. And what the government can do is to be brave—take brave steps to fix what is broken and make the system fairer.

By opposing these reforms, those opposite want to keep down younger Australians trying to get ahead. They will continue locking them out of the housing market. They're okay with a system that unfairly favours the wealthy over mums, dads, students and others who work hard every day just to make ends meet. They show their true colours by voting against our cost-of-living measures, including our tax cuts. They have said, over and over, that they will vote against these reforms and that, if the reforms get passed by parliament, they will repeal them, should they end up in government. This is astounding, not just because of the increased cost to taxpayers but because their now shadow treasurer actually understands this. He admitted in his book that the current CGT concessions are entrenching wealth and exacerbating intergenerational inequality, and the tax discounts on assets tend to favour well-off and established interests against those trying to get ahead.

I want to say to young people across Australia and in the Brisbane electorate: We get that the system is broken. We could have done the easy thing, and just kept going on with the same old same old. But we, this Labor government, want to support you, to give you the best opportunities in life—to give you a fair crack. That's the Australian way. And we will always fight for you.

A fair tax system is not one where everybody pays the same amount. A fair tax system is one where everyone contributes according to their capacity and where opportunity is not determined by whether your parents owned a property before the boom. It's one that rewards effort as much as wealth, and that's not the case now.

Labor's vision is straightforward: tax relief for working Australians, support for first home buyers, investment in housing supply and an economy that works not only for those who already have assets but those who are aspirational, who are still striving to build a future, because the strength of Australia has never come from the privileged few; it has always come from ordinary working people. And that's who these reforms are designed to support.

As leaders, we have a responsibility to ensure the next generation can live a life that they're proud of—that they can build a life they aspire to. But it requires us, as a government, to set the building blocks for opportunity—the same opportunities as, or better than, we had. This budget lays down the foundations to deliver just that. It's about building aspiration. It's a budget about hope. It's a budget providing an ability to build a safe and stable home and a community for people across my electorate and across Australia. I commend the bill to the House.

Llew O'Brien (Wide Bay, National Party) | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. These bills break faith and break promises that the Albanese Labor government made to the Australian people. The 2026 budget increases taxes, increases debt, and makes life harder for Australian households and certainly harder for Australian businesses. Everywhere I go, people tell me that the biggest problem in their lives is the cost-of-living crisis. It's at the top of their list of concerns. This budget spends more, taxes more and borrows more, adding to inflationary pressure and making it even harder for households to make ends meet and for businesses to balance their books.

This budget is a direct attack on aspiration for older Australians who are being punished for working hard and saving for their retirement, for business owners who take on the risk of investing in themselves and creating jobs only to now have the Albanese government claim a bigger slice of their capital, and for younger Australians who are being denied the same incentives to save and invest that their parents enjoyed. The hypocrisy and dishonesty of this Albanese Labor government—which promised more than 50 times there would be no changes to capital gains tax and negative gearing—is absolutely staggering. If the government had the guts and the courage of its convictions, it would have taken these broken promises to an election. But it certainly lacks both guts and conviction.

These broken promises, disguised as intergenerational equality, mean that those who are investing in the share market to save for their first home will pay higher taxes and be worse off. Treasury modelling indicates that Labor's changes to negative gearing and capital gains tax could result in 35,000 fewer homes being built over the next decade. What a shocker! Restricting negative gearing to new builds only while grandfathering negative gearing on existing properties denies many Australians the opportunity to build their own wealth and blocks them from the opportunities that our very own prime minister has enjoyed to build his substantial portfolio of assets.

If this government were serious about helping generations to come, it would restrain its spending and not leave them to inherit Labor's $1.25 trillion debt bomb, costing $80,000 in interest every minute. With two million migrants coming into the country over Labor's term, if the government were serious about addressing intergenerational equity and improving housing and rental affordability for Australians, it would cut immigration and implement an immigration policy that worked for Australian citizens, not the Labor Party's political interests.

The income tax cuts announced in last year's budget will take effect this year, but with inflation running at 2.4 per cent, energy bills soaring by 39 per cent and bracket creep costing households $2,000 a year since Labor came to office, their value has been completely eroded. It's the same with the working Australians tax offset in this bill. By the time it comes into effect, in the 2027-28 financial year, any benefit will be completely gone. If the government were serious about tackling cost-of-living relief and bracket creep, it would adopt the coalition's plan of indexing tax rates instead of increasing taxes by a whopping $273 billion over nine years. The new minimum 30 per cent tax on discretionary trusts punishes the families, farmers and small businesses that use these structures for succession and estate planning, and the future tax on testamentary trusts amounts to a death tax, plain and simple.

I'm hearing from small-business owners across Wide Bay who are also outraged by the capital gains tax—an attack on enterprise and aspiration—contained in this so-called budget. One business owner told me that he's worked hard and taken risks to get ahead in life, and now that effort is going to be taxed into oblivion by this Albanese Labor government. He pays company tax, tax on wage earnings and payroll tax, and a further tax on dividends if he's fortunate enough to make a profit. The final death knell for his aspiration is the tax on his trust when he distributes his earnings. He said, 'If the government was so concerned for the state of the budget and the country, why hasn't it reined in its own spending and handouts?' It's a legitimate question: why hasn't this government been prudent in the way that it spends and manages our taxpayer dollars? There have been 15 interest rate rises since Labor was elected in 2022, and the cost of living has skyrocketed. Hardworking Australians are being expected to cut their personal spending, but this Labor government keeps on spending. The number of staffers in the Prime Minister's office has increased by 16 per cent. The number of public servants has increased by 26 per cent.

Under Labor, even the basics have become unaffordable for many Australians. Households are paying more for electricity. A loaf of bread costs 22 per cent more than it did before this government was elected. Milk costs 23 per cent more, tea and coffee are up by 19 per cent, fruit is up by 18 per cent and home insurance is up by a whopping 40 per cent. The $1,000 instant tax deduction for taxpayers contained in this bill won't even begin to cover the rising costs of groceries, fuel and mortgage repayments.

The 2026 budget removes incentives for saving. It's an attack on aspiration. It sets Australians up for intergenerational warfare. It holds everyone back and leaves everyone behind, and it breaks faith with the Australian people.

Rowan Holzberger (Forde, Australian Labor Party) | Link to this | Hansard source

I rise in support of the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026—which I learned today is affectionately known as TLAB—and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. In doing so, I acknowledge the work of my neighbour the Treasurer, the member for Rankin, who has led the Labor government's economic team to deliver a truly Labor budget and a budget which is aimed well and truly at the people that that the Treasurer and I represent in Logan and the people that that you represent as well, Deputy Speaker Claydon. It is a budget which speaks absolutely to the aspiration of working-class people, who have for too long seen their wages go backwards, their taxes go up, and the great Australian dream of owning their own home disappear under, effectively, 30 years of coalition government.

In fact, I think what this budget does more than any single act of this government is really demonstrate that at the heart of the philosophy of this government sits a rejection of the status quo. The public has had enough. The public is not going to put up with a broken system anymore, and it takes a government with guts to do something about it. I think the philosophy of this government was summed up in two things that the Prime Minister said recently. One was 'nobody held back and nobody left behind', but the other thing that he said, which really struck a chord with me—and he said it much more eloquently than I'm going to be able to say it—was: If you come across a broken system, what do you do? Do you just throw your hands up in the air and say, 'I wish I could do something about it, but I'm only the Prime Minister'? I think it is exactly that sort of attitude that Paul Keating used to describe when he talked about the coalition as presiding over the Rip Van Winkle years, where the country just goes to sleep but slowly falls apart as the rest of the world leaves us behind. It takes a Labor government to really implement Labor values, which are about improving the economic conditions of working-class Australians.

The thing that I also note about this budget is that it is very much where tax policy and housing policy come together. It is absolutely a statement of the blindingly obvious to say that. The two bills here really deal with housing and taxation, particularly the relationship between housing and taxation. The measures in these bills are not going to solve the housing problem on their own. That is going to be solved through the implementation of the most ambitious housing program that we have seen for generations—a $47-or-so billion investment to fix public housing, to create the infrastructure needed to build housing and to encourage incentives for first home buyers, such as a five per cent deposit. It is measures contained within the whole of government's housing policy, which is designed to deal with the supply problem, which will ultimately fix the housing problems. But they will mean nothing if all we are doing is creating supply for investors to just buy up existing homes.

Long before I got elected to this place, long before I even thought about running in the 2022 election, housing had very much been my No. 1 priority. I believe strongly that there is no greater productivity measure that a government can take than to provide affordable housing. That's why I think in postwar Australia what we saw was an investment in public housing from both Labor and Liberal governments, I've got to say. Both Labor and Liberal governments believed that by investing in public housing, not just for the people that were desperately in need of housing but for workers, we were able to keep the cost of living down. We were able to keep rents down. As a result, we were able to keep the pressure off wages, and that actually helped business as well. You saw car workers and railway workers and teachers and police officers and aged-care workers all living in public housing because it was actually part of the economic design of our system that you had public housing in order to keep the pressure off wages and to help business. That's one of the reasons we had a strong manufacturing industry. If you look at the suburb of Elizabeth, public housing is built around the old Holden plant there because it was absolutely part of the charter of the South Australian Housing Trust to aid in the economic development of the state.

We have seen over the last 30 years a complete rejection of those old Liberal Party values and a rejection of those Labor Party values. We saw it under the Howard government, and it even further decelerated under the Abbott, Morrison and Turnbull governments, where they built something like 373 houses over the 10 years that they were in government. We saw—surprise, surprise!—a housing crisis 30 years later. So, while the measures in these bills will not go immediately towards fixing the central problem for first home buyers today, which is that wages have not kept up with housing, it sits within the government's wider housing strategy, and, frankly, it sits within the government's wider philosophy of just not accepting a broken status quo. Look at health care, where the government, through one policy alone, tripled the bulk-billing rate, which more than doubled the number of bulk-billing clinics in Forde overnight back in November. It enacted a policy to keep the cost of medicines down, with PBS medicines at $25. I learned today that, had that policy not been in place, people would be paying $50 for those medicines. It takes tough decisions. This money really just doesn't come from anywhere. This money has been directed to the priorities of this Labor government, but it's meant that we have needed to make tough decisions in the process. And so it is that the measures around negative gearing and around the capital gains tax are designed to attack that particular problem where housing has become an investment vehicle rather than a family home, as we've seen since the capital gains tax discount at 50 per cent flat came in.

We've seen values of housing rise of multiples of about four or five times the median wage to eight to 10 times the median wage. It has become absolutely impossible for people to think about buying a home anymore. What we've seen as a result is homeownership rates, which were, for decades, steady around that 72 to 73 per cent of the population, fall to around 66 per cent of the population today. When you look at that age cohort between 25 and 45, they have gone completely off a cliff. It is not good enough. We know it in our electorate. People are hurting. I think the Prime Minister really summed it up well the other day when he said, 'It's hard to buy a house,' and there was an interjector from the other side who said, 'It's getting harder,' and the Prime Minister seized on that and said, 'Yes, it is getting harder.' There is a recognition in this government that the status quo is broken. We know it in our communities. You know it when you look at the numbers. You know it when you sit down, like I did over the weekend, with a 65-year-old woman whose lease is about to run out in three months time and who is desperate to find somewhere for her and her 13-year-old dog to go and live. It's broken when you look at the numbers. It's broken when you talk to talk to people. The underlying philosophy of this government is 'no more'. The status quo is not good enough.

These measures deal with the taxation treatments around housing as an investment, but they also deal with the other part of that problem—rising house prices compared to median wages, which is take-home pay. Today, we've seen, again, because of this government supporting a rises for minimum wages, take-home pay increase by 4.75 per cent for minimum-wage earners, which means, that since this government came to power, wages have gone up by $12,000 a year for minimum-income workers. That is a 12 per cent real wage increase. On top of that, it is not just how much people are earning but how much people are able to pocket. Once the measures contained in this bill that build on the tax cuts over the last few years are in place, the average worker's income tax cut will be about $2,816 compared to 2023.

We are doing two things. We are trying to take the heat out of the housing market. As the Prime Minister says, we expect prices to continue to rise but at a moderate level. At the same time, we are dealing with the other part of that equation—how much workers take home in their pocket. In some ways, the argument has been settled around housing, and it is very difficult now to hear cogent arguments from the other side about housing. They generally leave that alone, which I think is interesting for them, because they're creating a long-term problem for themselves again.

There are many reasons, including the good policies that we had, but the one mistake that the other side made was when the now opposition leader said that they would repeal our tax cut on the eve of the election. That was the moment where I actually thought: 'You know what? I've got a chance in Forde.' I just thought it was political as well as economic craziness to take that policy to the election. I credit that as the single biggest mistake they made on the other side. I can't believe it. Not only are they prepared to make that mistake again by not supporting the tax cuts in this legislation—are they seriously going to go to the next election promising to give tax breaks to property investors?

I'm not sure they've really thought that through. In two years time, are all of the people, all of the first home buyers who are already starting to be advantaged by this policy—all of the people that can actually start to see this dream becoming a reality again—really going to vote for a party that is promising to bring in tax breaks for property investors? I don't know. I don't know. I hope so, because I think it's going to cost them a lot of votes. I hope so, I guess, for my benefit—not to be selfish. I implore them not to, for the sake of the community.

You hear them talking about other things, like the member for Wide Bay mentioning that this is going to hurt people that are saving up, using shares as a strategy to save a deposit for a house, because a house is unaffordable for them, so shares become the only strategy. The irony in that is obvious to me, so I don't know why those on the other side keep bringing that up. The irony is that house prices have got so out of control that the only way that you can use the 10 grand that you might have disposable, which you can't now invest in a house deposit—you say you have to put it in shares. That irony is obviously missed on them, but the economics is also missed on them. It's a fact they don't like to talk about, but, if you look at the last 20 years, if you retrospectively applied a system of indexation, most people would have actually done the same or better out of an index system.

I urge people to support this. I urge the opposition to have another think about this. I would hope that all their shenanigans in trying to refer it to a committee is because they haven't properly settled on a position, but, when they do, I urge them and the others in the House to support this bill.

Melissa Price (Durack, Liberal Party) | Link to this | Hansard source

I rise this evening to speak on the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. It is in these pieces of legislation that Labor squarely attacks regional West Australians, small businesses, small-business owners, farmers, and younger and older residents. The coalition absolutely opposes the adjustments to the capital gains tax discount and negative gearing contained within these bills.

These pieces of legislation mark the end of aspiration in Australia and trust in government. Not one Australian voted for Labor's toxic taxes at the last election. Prior to the last election, the Prime Minister told us in his own words more than 50 times that there would be no change to capital gains tax or negative gearing. Is there anything this Labor government is not taxing? There is a death tax, a tax on family savings and a tax on renters. There is a tax on first home buyers and young Australians just trying to get ahead. That's on top of taxes on small businesses, startups and entrepreneurs—truly unforgivable.

The coalition has consistently said that if you tax something more, you get less of it. But don't trust me—Labor's own budget papers say that there will be 35,000 fewer homes delivered because of these new taxes. The Commonwealth Bank's chief economist says that these changes will raise government revenue but will not build more homes. How can Labor claim that this budget is about young Australians when all it delivers is a lower supply of houses, higher prices, higher rents and higher taxes on their deposit and investments? That is not helping first home buyers. That's kneecapping them.

The Financial Services Council data confirms that aggressive investors, typically Australians aged around 35, will be the hardest hit by these capital gains tax changes—not the ultra wealthy, as our Prime Minister wants us to believe, just ambitious young Australians. Gen Z and millennials are investing more than three times the share of their income than baby boomers. The government's response to this ambition: just tax it!

We've heard all of the contributions here today. But, no matter how much spin we hear from the other side of the chamber—that this budget is all for young people, young Australians—the facts, in their own budget papers, and from experts right across the country, tell the true story: that this budget is about limiting opportunity, not about increasing opportunity.

Small businesses now have a new 47-per-cent co-owner: the Albanese government. The government has taken on none of the risks and it will not work one day in these businesses, but now it wants nearly half of the business at the time the business is sold. Why would any Australian now start a new business when the government acts as a silent partner from day one? The young plumber or chippie or hairdresser or gym operator or yoga athlete—just trying to build wealth beyond a day-to-day income, and to get their business to a point of selling in the future—is now being cut down for just having a go. For many business owners, it's their retirement savings and their family legacy. And they're the first employer of many young people in our regional communities. Everyday Australians must start somewhere, and often, particularly in regional seats like Durack, they start working in a small or a family business. Now Labor are trying to take that start away.

Farmers—well, they're becoming Labor's No. 1 target. Labor views farmers as their personal cash-grab. Labor bowed to the Greens and the inner-city voters in ending live export—and we all remember that and those dark days. They provided inadequate compensation—still ongoing, by the way—wrapped it in red tape, and watched as the industry tanked. Now the future of WA's agricultural industry is at risk because of Labor's toxic taxes. The last thing our country needs—and I repeat: the last thing our country needs—is to make it harder for the next generation of farmers to stay on the land. We're talking about feeding our country—food, and fibre, for our country.

If hitting small business, farmers and young Australians wasn't bad enough, hidden away in the budget papers, hoping no-one would see it, was a 30 per cent death tax. The Prime Minister was asked in question time, in front of the Australian people, if he would rule out a death tax. He wouldn't rule it out, and now we know why—because it had already been announced; it was already hidden in the budget papers.

So you've got to ask yourself: how low can this Prime Minister go? Honestly! He fails to tell the truth to the Australian people during an election campaign; he attacks aspiration; and now he wants to insert himself into families' inheritance. By the way, the Prime Minister was asked, only the other day in Canberra, whether the family home was going to be the next capital gains tax victim. Well, he refused to answer that question, so I'll leave it up to those listening, playing along at home, as to what they make of that. Why wouldn't he just count that out and say, 'Of course the family home is not going to be the next victim of capital gains tax'? But I smell a rat.

This budget is not intergenerational fairness, as those opposite would have us believe. It is causing intergenerational war, fuelling fights at the dinner table between generations about what will be left and what the government will pocket.

Older Australians—well, they can't escape the Prime Minister's cash grab. Labor will hit them with higher costs for private health insurance. Nearly a quarter of residents in Durack will be directly affected by these changes. Regional Australians are already facing limited healthcare services, longer wait times and fewer specialist options. Yet Labor has shamefully prioritised politics over practical support, imposing increases of up to 21 per cent on essential healthcare cover for older Australians by reducing the tax rebate. The government has ignored a simple reality. Older Australians rely on health care more frequently than younger Australians.

At a stage of life when affordable and reliable access to health care matters most, Labor is forcing our older Australians—our senior Australians—to pay more. This is unforgivable. Older Australians on fixed pensions are telling me it is becoming nearly impossible to keep their private health insurance while managing the rising cost of living. Many are being forced to choose between keeping their insurance and paying for essentials like heating and groceries. There is a consistent theme in this budget. Labor simply does not care for Australians. They do not want you to get ahead. They do not want to support you. They only want to cut you down and tax you more. For what? It's purely to help feed an overspending government that has been reckless with our economy.

The coalition supports the introduction of the working Australian tax offset and the $1,000 standard deduction for work related expenses. We support an annual offset of up to $250 for all Australians. But the coalition is more ambitious. The coalition wants to give Australians a greater tax cut—one that is not wiped out by Christmas. We call on the Albanese government to agree to our proposed amendment. Why not? You want to give Australians more of a tax cut. Here's a chance to show that you really do believe in tax cuts for all Australians. Under our tax-back guarantee, the coalition will index income tax thresholds to inflation so that Australians are not taxed simply because prices have gone up. We believe that when you earn your money, risk your money and save your money, you should get to keep it.

From 2028-29, a coalition government will index the bottom two income tax thresholds to inflation, delivering relief of around $250 in year 1, growing to $1,000 a year by year 4. Now that is generational tax reform. A coalition government will repeal Labor's toxic taxes. The capital gains tax changes, negative gearing changes and the hidden death tax will all be gone. The more you tax, the less you get—less housing, less saving, less investment, less small business. We will always back aspiration and reward for hard work, starting with the scrapping of these taxes.

The coalition has always prioritised homeownership and wants to put it back at the centre of Australian values. We will restore common sense to migration and housing by only bringing in as many people as we can house. A coalition government will cap net overseas migration each year based on how many new homes are completed. Never again will we have a migration program that brings in more people than what our housing can support. It simply doesn't make sense.

The coalition values the contribution of migrants. Of course we do. Everybody in this House values the contribution of migrants. We've all come from somewhere else. But without a secure home to come to, it cannot be a great start to a life in Australia for new migrants. The key to getting more people into a home is more supply. That is why we will establish a $5 billion housing infrastructure fund to unlock up to 400,000 homes, funding critical last-mile infrastructure such as water, sewerage, power and access to roads. The National Construction Code will be simplified, ending red tape, making it easier—not harder, easier—for building companies to build more homes and cutting the cost of a first home by up to $70,000.

The coalition will always back small businesses and startups. We see the value of small business and want to help small businesses grow, not stall. We will make the $50,000 instant asset write-off permanent for any business with a turnover of less than $10 million. When a small business invests, it grows. And when a small business grows—well, Australia grows with it.

The difference between the coalition and Labor is clear. While Labor wants to move Australia away from being an ambitious nation, we want more ambition. We want young Australians to be able to get ahead, small businesses to grow and older Australians to have the support they need and deserve after a lifetime of hard work. We believe that, if you work hard, you should keep more of what you earn. That is why we will repeal Labor's taxes and give all Australians a fair tax system. I thank the House.

Louise Miller-Frost (Boothby, Australian Labor Party) | Link to this | Hansard source

These tax reform bills—the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026—are about reasserting Australian values and the Australian dream—an Australian dream that was conceivable for our parents and grandparents and which is now almost impossibly out of reach for our children and grandchildren. It isn't just a question of equity; it's about resetting standards and rebuilding foundations so all Australians have the opportunity to achieve the best of what this wonderful country promises if they work hard enough and dream big enough. It's about restoring a fair go.

I am the beneficiary of a fair go, a promise that was offered to my family and me all those years ago when we migrated to Australia as part of the wave of ten-pound Poms seeking better opportunity and a better life. We were economic migrants. I am the product of tradespeople and factory workers. My grandfather worked in the Holden factory in Elizabeth, north of Adelaide. My father was an electrical draughtsman for Simpson-Pope, a whitegoods manufacturer. By the fact of their own sheer hard work, they were able to buy a home and raise a family in the comfort of that home. Of course, when we migrated to Australia in 1968, the average cost of a house was about 2½ to four times the average wage, statistics that my children and grandchildren and their generations can only dream of. That I am able to stand here before you today is testament to the boundless opportunities that this country can afford for all Australians. To deny young Australians today—our children and grandchildren—these opportunities would not only be unfair; it would be un-Australian and giving up on the Australian dream.

The Albanese Labor government is committed to giving every Australian, young and old, a fair go. This budget is about giving every Australian a fair go—a fair go at homeownership and a fair go at working hard, earning a fair wage and getting ahead. These bills seek to restore the Australian dream, to make it an unquestioned truth that an Australian who works hard will be able to get ahead no matter where they start—the children of factory workers or the children of professionals. It should be available to us all.

There are four major planks in this tranche of the tax reform package: the working Australians tax offset for over 13 million working Australians; an instant $1,000 tax deduction; reforms to CGT, capital gains tax, to return the cost base indexation with a 30 per cent minimum tax; and reforms to limit negative gearing to new builds. These measures will make our tax system fairer, simpler and stronger and will benefit, in particular, low- and middle-income earners. This will benefit young Australians looking to get a leg-up in the housing market; it will continue our support for investment and innovation; it will provide for tax relief and tax reforms that actually work for Australians and businesses and not against them; and, because of the Albanese Labor government's responsible economic management, it will mean an improved budget bottom line that is sustainable into the future. This budget will make the biggest changes to capital gains tax and negative gearing in decades, because the reality is that massive changes are needed to reform an entrenched tax structure that has disadvantaged everyday Australians looking to get their foot in the door of buying their own home. The Albanese Labor government is prepared to take up the challenge because it is an urgent and pressing challenge.

In 1999, when the Howard government made the catastrophic changes to negative gearing and capital gains tax—changes that turned housing from being a home, a fundamental part of the Australian dream, to being an investment vehicle and that drove investors away from shares and other productive investments that build the country and into established housing, beginning the upward spiral of housing prices—the average house cost around three to four times the average wage, a tiny increase from the cost 30 years earlier in 1968, when my family arrived and bought a house. In 2026, less than 30 years on, it is now 10 to 16 times the average wage. The increase in house prices has massively outstripped the increase in wages. The average age of a first home buyer late last century was somewhere in their mid-20s. Today, the average age of a first homebuyer is in their mid-30s because it takes so much longer to save a deposit, and the downstream effect is that they're also likely, therefore, to delay starting a family and settling down.

A major cause of this asymmetry is the capital gains tax rule that Howard introduced in 1999. Howard's 50 per cent discount on CGT was intended to boost investment in shares. Instead, investors gravitated away from shares and towards low-risk, high-yield established properties. What this means is that more than $80 million of investment lending has been directed towards established homes. Investors have monopolised the established housing market, outcompeting first home buyers because of their taxpayer subsidies—that's subsidies that you and I, Mr Speaker, are subsidising—all of which has been further compounded by dramatic declines in new house builds.

Before 1999, Australians paid the difference between the purchase price and selling price of their asset, adjusted for inflation. Now we are returning to cost base indexation for CGT, which will be paid on real gains with a 30 per cent minimum tax rate, the marginal tax rate that most Australians pay on their income, because it's unfair and morally unsustainable that Australians should be paying more on their labour income, their wages, than investors pay on income generated from other assets. Why would we tax wages earned by workers, the people we want to continue to build our country, more harshly than other forms of income? How is that fair? How is that the Australian dream?

These changes will also prevent investors from delaying their capital gain to when they can exploit a low marginal tax rate. Under these new arrangements, all Australians will be obligated to pay their fair share when they make a capital gain. Exemptions will apply to those on means tested income support, including those on JobSeeker and age pensions.

The Albanese Labor government's reforms to capital gains tax will smooth out the distortion in the tax system that has allowed house price increases to massively outpace wages. The changes will also apply to all asset types, whereas previously the privileging of one asset type over another resulted in another wrinkle in the tax system. These changes will mean a redirection of investment spread across all asset classes, like units and shares, not just existing properties. Investors who have a stake in new builds can choose the tax arrangement that is more favourable to them: the 50 per cent discount or the new cost base indexation with 30 per cent minimum tax.

These tax reform bills will also limit negative gearing to new builds. Again, investors are overwhelmingly attracted to established properties because they're able to claim generous deductions for losses with negative gearing from day one. That's at the expense of the taxpayer, who is obligated to step in and reimburse the loss. And it's not been an uncommon scenario today—or at least a few weeks ago, before the budget—that everyday Australians at auctions would find themselves competing against investors who could outbid them. Because the investors have had the capital and money to spare, because they could invest in something, they could pay more than its value knowing they would make a loss—thanks to the taxpayer. We want people to invest in things that will actually build income, not make a loss. This simply isn't fair.

We are hearing from first home buyers that already, since the budget, they're able to buy a property at a fair price—now only competing with other first home buyers and not having to compete with investors, who can pay inflated taxpayer subsidised prices. Under these new arrangements, if investors currently have a property negatively geared, the previous tax arrangements under which they made their investment will continue to apply. I know this grandparenting is controversial in some quarters, but the rationale is that people who made valid investment decisions under the old regime shouldn't have the goalposts moved on them.

In the future, negative gearing for new investments will only be available for new builds, supporting an increase to the housing supply, something that this country desperately needs. The Howard-era changes apparently intended to achieve this but failed miserably. The old capital gains tax and negative gearing models have allowed investors to disproportionately buy established housing relative to other assets while leaving everyday Australians looking to get into the housing market by the wayside.

This government's reforms, broadly supported by independent economists, will spur investment in new builds while minimising the tax incentive that has favoured established property. All together, we predict that these reforms will increase housing supply by 30,000 over the next decade and get 75,000 more homeowners into the housing market. The reforms are about levelling the playing field, and they're about giving every Australian a fair go.

These bills will also facilitate another round of Labor tax cuts, allowing Australians to get ahead to make the most of the fair go with their own hard-earned wages. We want Australians to earn more and keep more of what they earn. Australian workers should not be disadvantaged by their wages income relative to income generated from other sources, such as investments. We have a shortage of workers in this country. Every business I speak to tells me how desperate they are for skilled labour and how they could expand and grow if only they could find more workers. So we want to incentivise workers to work and to earn more.

It's the Albanese Labor government that is intent on ensuring that Australians keep more of what they earn. Working Australians will receive a tax offset of up to $250 on their income, helping over 13 million hardworking Australians, including approximately six million women. This will effectively see the tax-free threshold increase for workers by $1,785 to $19,985 or, for workers eligible for the low-income tax offset, $24,985. There will also be a $1,000 instant tax deduction. Rather than claiming on work related expenses, Australians can now choose to claim an instant tax deduction directly on their income without having to keep receipts. Over six million workers—notably, low- and middle-income workers—will benefit from this deduction, with an average saving of around $205. Next month, 14 million Australians will get a tax cut of up to $268, and this will benefit around one million taxpayers in my home state of South Australia.

Speaker, I know you've been following along very closely, and you would have noted that I started by talking about four planks, and now I've now introduced a fifth. The fifth is in fact the new tax cut next month, which of course was locked in under the government's previous term. The next one is 1 July next year. Then we have tax changes to make housing more affordable, a $250 workers tax offset and a $1,000 instant tax deduction. All in all, the average worker will benefit by nearly $3,000.

These tax cuts are about giving all Australians a fair go, and that includes young Australians, who are overwhelmingly but not exclusively the aspiring first home buyers. Sixty per cent of the recipients in next month's tax cuts are the over eight million gen Z and millennials, the workers we need to build our shared future. Ninety per cent of young Australians will be better off because of these tax cuts.

The Albanese Labor government is in the business of giving all Australians a fair go. We're in the business of ensuring that Australians who work hard are able to get ahead—an essential value, the Australian dream. We're in the business of making the Australian dream a reality again—a reality that was generously afforded to my family and me as migrants to this country all those decades ago. We came here for a better life. We bought into the Australian dream: a home of our own; public education; public health; good, secure, well-paid work; and a fair go. At the heart of the Australian dream is the opportunity for all Australians to afford their own home—a home in which to feel safe and secure, a home in which to create memories, a home in which to raise a family.

The government's changes to capital gains tax, negative gearing and the suite of tax cuts will mean that a fair go will no longer be the mirage of times gone past. It will be reality again—something to aspire to, something real and tangible to work towards—because Australia, if nothing else, is defined by the fair go, and who are we as a country if we're no longer able to meet that promise. I commend the bills to the House.

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

The question is that the amendment be agreed to. I give the call to the honourable member for Groom.

Garth Hamilton (Groom, Liberal National Party, Shadow Assistant Minister for Energy Security and Affordability) | Link to this | Hansard source

From the bottom of my heart, thank you very much, Speaker. I rise with great joy and enthusiasm this evening to speak on these tax reform bills. From listening to the debate so far, I'm reminded of the old adage that the power to tax is the power to destroy. This comes from the 1819 Supreme Court of the US finding in McCulloch v Maryland. At that time, the states were trying to destroy the federation's ability to produce banknotes. This was the second Bank of the United States. When a government decides to destroy something, when it decides to bring something down, the most powerful tool it has is taxes.

So we have this adage, which in the US context speaks to the issue of states' rights and that contest between the state and federal government, but in the broader context we talk about it in regard to how a government can apply its taxation settings and the careful balance that every government must find in using taxation settings to generate some sort of societal good to shape the economy around the needs of those who are most vulnerable or to provide opportunity for areas in growth which the government wants the nation to build towards. That must be balanced with the power of taxation to disincentivise investment. When done to a certain extent, to its fullest extent, the outcome is the death of a certain industry. That's what that comes to.

I'm reminded of that when I hear my colleagues use the line, 'When you tax something, you get less of it.' That's just a modern way of saying the same thing. When you tax something, you get less of it. In the budget and the bill that we're speaking to tonight, we see a perfect example of that played out. I can remember very clearly reading page 158 of Budget Paper No. 1 with great surprise that that budget paper would include in it the explicit line that the result of applying these taxation settings as proposed in this bill would be 35,000 fewer houses built by the private sector. That is a perfect example of taxation settings being deployed—no doubt with good intentions. There is no doubt that the societal benefit that they sought to deploy was there. But the consequence is clearly a downward pressure on economic activity—in this case, in the housing sector.

The fact that that particular detail was included in the budget papers was rather extraordinary because it really does just lay bare the biggest counterargument to every speech we've heard so far on this debate—that these taxation settings are driving down the number of houses that will be built by the private sector. The only way possible the government comes up with offsetting that is that we'll build houses ourselves. We'll fund social housing. Well, where is that going to be paid from? From taxes collected by Australians, which means that taxation revenue that would have been used for other things—hospitals, roads, schools and who knows what other good things—will now have to be deployed into the housing sector to make up for the 35,000 fewer homes that will be built as a direct result of these taxation settings.

The worst bit about this isn't the outcome. The worst bit is that we all knew this was what was going to happen. It's exactly what happened in New Zealand when they did the same thing. As soon as you remove these, there will be a downward pressure. We will see less investment in the housing sector. When you tax something, you get less of it. So we will see less investment in the housing sector. We'll see fewer homes built by the private sector—35,000 fewer homes is the estimation of the government themselves, of Treasury. The number from Treasury is 35,000 fewer homes. That's what this is doing. It's as simple as that. In assessing the outcome of these bills, of these taxation changes, we will have fewer homes.

If the societal benefit were to produce fewer homes, sure. The societal benefit put forward by the government was intergenerational fairness—that we would create more opportunity for the next generation. Well, we're not doing that. It's clearly failing the very test the government set out. This does not provide more fairness for the younger generation. This does not create greater opportunity to enter into the housing market for the younger generation. What it does is reduce the number of houses that will be built. Very simply, when you reduce supply and maintain demand, the price will go up. That is what will happen. That is basic economics. We've seen that time and time again.

Debate adjourned.

House adjourned at 22:00