Tim Wilson (Goldstein, Liberal Party, Shadow Treasurer) | Link to this | Hansard source

It's so good to see all the Labor members in the chamber voting to make sure I can give this speech. I know the Treasurer himself has said he has come into this chamber to vote so that I can give this speech. On budget night, Australians who ordinarily may not pay much interest in politics or be interested in the budget, because they go, 'It's just the government managing its own finances,' got an earthquake. The self-starters and small businesses of the nation found out that they were being utterly betrayed by the Albanese government on so many levels.

The government has come along and broken promises to the Australian community which they took to the last election, from their family savings taxes to their death taxes, taxes on homes and taxes on rent. It doesn't matter what they are. The government is seeking to betray the Australian community in its higher taxing agenda. We hear from the members opposite, including the 'trainwreck Treasurer', about how good these new taxes are for the Australian community. Well, if that's true, have the courage to take it to an election, because we don't need a coward's castle of people putting policy after an election. It's time you actually own the consequences of it.

We heard the member for Maribyrnong before foolishly signing herself up to the Albanese Titanic, because she thinks somehow that this is going to be working for them. Well, as I've said before, it is a bastard budget of broken promises.

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

Member for Goldstein, we will withdraw that comment immediately.

Tim Wilson (Goldstein, Liberal Party, Shadow Treasurer) | Link to this | Hansard source

On what grounds?

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

Unparliamentary language—and you know that full well. Withdraw, please.

Tim Wilson (Goldstein, Liberal Party, Shadow Treasurer) | Link to this | Hansard source

I'll happily withdraw. But I've said it before: 50 times over, we had a prime minister who said that they would not introduce these taxes, and we had the deceit, dishonesty and misleading of the Australian people that have come from this prime minister. And now we have so many stories that have come through the Not the Tax We Voted For website that have told the stories of Australians and how they have been betrayed by this government and this budget. They know the full consequences of what this government is seeking to achieve. They know it's about taking from them and betraying their trust. And I can assure you: every single Labor member that goes to the next election is going to be tied to this trainwreck budget by this 'trainwreck Treasurer'.

There are four sections of this budget. The first one is the betrayal on capital gains tax. The second one is the betrayal on negative gearing. The third one is on the working Australians tax offset, and the fourth one is focused on their standard deduction for work related expenses. We absolutely oppose schedules 1 and 2, and we absolutely support schedules 3 and 4. But, of course, in their tricky, meanspirited way, just as they did before the last election, they're tying the two bits of the bill together to try and justify why they should be able to get away with it.

Well, the Australian people won't buy it. Just like they now see the deceit from the government, they will see the deceit through this legislation, because you just can't take this government seriously. You can't take this 'trainwreck Treasurer' seriously. He doesn't take the truth seriously. He doesn't take inflation seriously. And he certainly doesn't take interest rates seriously. We have the Treasurer, who continues to stoke an active inflation agenda, playing a game of interest rate chicken with the Reserve Bank governor. In the face of the problems that he's created, his only answer now is to crash the economy through higher taxes. Of course, this massive tax hike which is targeting Australians is going to be one that is going to hang as a millstone around their neck, because, while businesses are struggling to get ahead and while small businesses are struggling to pay wages and keep their doors open, the reality is the government is coming along and punching down on those businesses and making it harder for them to get ahead. It's not just in the costs they're imposing through higher taxes, but it is how they are acting every step of the way to stoke inflation, which is increasing business costs.

They have an active inflation agenda which involves stoking the inflation, taxing the inflation and spending the inflation then wash, rinse, repeat. The Treasurer might think it's funny to play a game of interest rate chicken with the Reserve Bank governor, but I can assure you the Australian people do not feel so. They know how bad inflation is because they're living with it, and they're living with higher interest rates as a consequence. What we hear instead—the government can't answer any questions.

We sat through question time, and the government couldn't answer what a new home was. The government couldn't answer the question of whether they had modelled how quickly inflation was going to take away their working Australian tax offset. They couldn't answer basic questions about their budget, but what they can do is throw around talking points thinking they can continue to perpetuate the deceit they are engaging on the Australian community. My favourite one is from the Treasurer, and he screams out, 'Anyone who disagrees with me must be talking down the economy.' Sorry, Treasurer, wake up. It's called the truth. You are running down the Australian economy. The Albanese government is running down the Australian economy, and now it is seeking to crash the economy, and this is a disaster, through their higher tax agenda targeting small businesses who are the most likely to employ and give people their first job and the most likely to be able to stand up and get ahead. His only answer is to punch down on those small businesses and the self-employed through this budget.

Despite everything this government are doing, they will not break the backs of the Australian people, and they most certainly will not break our backs. I can assure you, when Australians go to the next election, they will have an absolute choice between a government that is focused on growing the economy and giving Australians a chance to get ahead, empowering them through not just their own energy and aspiration but a sense of belief about what we can achieve together, or we can perpetuate the Albanese government, and we know full well where that is going to end, where renters pay more according to the government's own budget documents, where first home owners struggle to get ahead because the government is going to build 35,000 new homes while they continue to overreach on their migration targets so we have more people looking for fewer homes.

We can have a government that goes beyond the idea of simply being dependent on government or working for government or big business bureaucracies, because, in an environment of lower taxes backing self-starters and small businesses, they can get ahead. There is hope on the blue Liberal horizon. That starts with repealing these awful taxes that the government is putting forward. Whether it's their changes to capital gains tax, negative gearing or trusts, the direct assault on the self-starters of this country will end. We will make sure that those Australians who back themselves get ahead and it isn't simply if they cosy up to the Labor Party to be able to get ahead. Second, we're going to stop the Treasurer pouring debt petrol on the inflation fire. This treasurer is addicted to spending and cannot stop borrowing from tomorrow to pay for today, because he has no vision and no plan for the Australian economy. We're going to stop the Treasurer doing this and make sure that the budget is in a position where we can make sure that doesn't contribute to inflation.

Third, we're going to introduce our tax-back guarantee, which means we'll keep tax rates in check with inflation so the Treasury, the tax office and the Treasurer thieves can't steal wages by stealth. In addition to that, we're going to increase the instant asset write-off for small business to $50,000 and make it permanent. We can have a better future. We can have an Australia where those who work hard get ahead, where hard work pays off, where people feel respected and where they are in control of their lives. We can have an Australia where Australians who work hard, live out their dream and their aspiration through every stage of their life, from getting a good education to building their own effort, investing in their own future, buying a home, having a family and retiring with security.

But there's one sure-fire way we will not get this, which is the perpetuation of the Albanese government, because we have seen in this budget that they have declared open war on the aspirations of Australians. They have declared war on anybody who is saving to get themselves ahead and build a business.

We hear these cute little arguments about carve-outs or limitations or exemptions. But the only way you get those exemptions is if you age yourself out or if you're not as successful as you'd hoped you'd be. The reality of the government is that they actually want Australians to fail. They want limitations and shortcomings rather than success. If this government were seriously interested in boosting the aspirations of Australians, it would want them to do better than the exemptions under the small-business definition of the capital gains tax. They would want them looking to a blue liberal horizon with confidence and hope—unless, of course, you're a tech billionaire. Because the teals want to give an exemption to them, they're cosying up to the government and getting it.

I know most of this speech has been critical of the budget, but I'm sure, Deputy Speaker Claydon, you would remember, as I'm sure the member for Casey and the member for Cook do, and maybe even some of the Labor members remember, when the teals wanted a truth-in-political-advertising bill. Remember that?

Aaron Violi (Casey, Liberal Party, Shadow Minister for the Digital Economy) | Link to this | Hansard source

Yes.

Tim Wilson (Goldstein, Liberal Party, Shadow Treasurer) | Link to this | Hansard source

That involved telling the truth before an election. Yet somehow none of them seem even remotely interested in that, when, since the election, the Prime Minister has betrayed the Australian community and broken a series of promises. It's almost like they never really cared, just like they don't really care about integrity, because we have the member for Wentworth arguing for some of her biggest donors to have exemptions from the very capital gains taxes she advocated for. This is the deceit—the whole cabal of them working together to undermine Australian aspiration and Australians getting ahead, and they've been called out.

Shayne Neumann (Blair, Australian Labor 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 bill. We've just heard a diatribe of a half-a-trillion worth of unfunded commitments, which disqualifies the 'blue horizon'. I wonder whether he's ever looked at the result of the last election, the one before that or any polls since then—uncosted policies delivering much bigger deficits, higher debt and higher inflation. Of course, they're voting against the tax cuts that Australians will receive after what happens on Thursday.

I'm pleased to support this real reform from a reforming Labor government. Through this legislation, the Albanese Labor government are delivering a new $250 tax cut for every worker because help with the cost of living is our No. 1 priority. Combined with our previous personal tax cuts, it means $2,800, on average, back in the pockets of Australians from 2027-28. We're helping more Australians realise their dream of homeownership and supporting investments in innovation through a significant tax reform package, the most significant one we've seen in a quarter of a century. This package is pro aspiration, it is pro jobs, it is pro worker and it is pro homeownership. It's about helping workers, first home buyers and businesses like those in my community so that more people can earn more, keep more of what they earn, get in the housing market and get ahead.

I wonder why the tories over there, the Liberal and National parties, never want working-class people to get ahead. Every single time they've got an opportunity to vote for a bill that provides support for working people, they oppose it.

Before 1985 in this country we had no general taxation on capital gains. The Hawke and Keating government introduced a CGT to ensure arrangements couldn't be made to convert income into tax-free capital gains. It was prospective. Taxation was of course linked to inflation indexation. Contrary to what those opposite say, the biggest taxing government in the history of the Commonwealth of Australia was the Howard coalition government, and the biggest spending government was the Morrison coalition government. It goes against the narrative of those opposite—the reality of what happened.

Since the Howard government introduced the 50 per cent CGT discount for people who hold their assets for more than 12 months, it has been increasingly difficult for people to get into the housing market—if you're a young Australian trying to buy your first home. We've had 27 years of evidence and experience to know the Howard government got it wrong. John Howard and Peter Costello made a mistake in distorting investment and distorting the economy. We know that hundreds of thousands of working Australians don't know what it's like to live in their own home, because the conservative parties in this country never cease to kick down. They always want to help those on the up who are rich and powerful and wealthy, and they never want to support working and middle Australians. They do not believe that working-class people, fundamentally, should aspire to the dream of homeownership. Our government's listened, and we're acting on it. We cannot wait any longer. We have to build on what we've done in the past four years.

I would have more respect for those opposite if they had ever voted for one housing bill in our Homes for Australia plan— $47 billion to increase the supply of housing. But those opposite, the Liberal and National parties, couldn't be bothered to have a housing minister for most of their tenure—nearly 10 years on the treasury bench. On that front, we know supply is the main game. Those opposite fundamentally do not believe the Commonwealth government has a role in housing. They fundamentally do not believe it. If they had believed it, in that period of nearly 10 years they would have done something about it. Only hundreds of homes were built by them in those nearly 10 years—hundreds, not hundreds of thousands like we're supporting currently.

We know supply is the main game, as I say, but taxation is critical as well in terms of intergenerational equity, investment reorientation and equity between the efforts of labour and the efforts of capital and how they're taxed. Budget Paper No. 1, at page 142, makes it pretty clear, and I would encourage those opposite to have a bit of a look at the budget papers, not just look at the talking points. The budget papers make it very clear that people on average real incomes of about $800,000 per year during their peak earning years 'benefited from tax concessions worth more than $700,000 over their working life from a combination of the capital gains tax discount, negative gearing and discretionary trusts'. Budget Paper No. 1 says:

In many cases, these concessions mean that higher earning Australians can pay less tax than those with lower means, substantially undermining the progressivity of the tax system.

The progressive nature of our tax system is jeopardised by this. It goes on:

Without reform, the forgone revenue will continue to grow as the population ages, increasing pressure on the Budget to fund services Australians rely on and limiting the Government's ability to sustainably return bracket creep to Australian workers.

I'd encourage those opposite to read that budget paper, because it's crystal clear, then, that we need to do something about this.

This legislation is going to help 75,000 Australians, mainly young, realise the dream of homeownership over the next decade. There are new rounds of tax cuts for 13 million Australians, and we are making tax time simpler. And we are raising $40 billion over 10 years. This legislation is about cutting personal income taxes again and again and making it easier to buy a home, as well as better aligning the tax treatment of income from work with income from assets.

These bills deliver a number of things. One of these is a new working Australians tax offset, a WATO, to provide a permanent annual tax offset of up to $250 to every working Australian. The WATO will automatically reduce workers' tax liabilities on their income earned from working in the 2027-28 income year. The bills will introduce a $1,000 instant tax deduction from 2026-27 to allow workers to deduct up to $1,000 off their income tax without the frustration of receipt keeping, which I know really annoys people as they work. The bills replace the 50 per cent capital gains tax discount with a new discount based on inflation for gains accrued from 1 July 2027. Investors in new builds will have a choice between the 50 per cent discount and the new arrangements. The bills will introduce a minimum tax rate of 30 per cent on real capital gains accrued from 1 July 2027. Recipients of certain income support, such as age pensions and JobSeeker, will be exempt from the minimum tax if those payments are received in the year in which the capital gains are realised. Those opposite never mention that. Finally, this legislation will limit negative gearing for residential properties to new builds from the 2027-28 income year. Arrangements will remain unchanged for all existing investments made before 7.30 pm on 12 May 2026.

The changes are prospective. Capital gains on existing investments that accrue prior to 1 July 2027 will retain access to the 50 per cent discount while capital gains which accrue from that date—from 1 July 2027—will be subject to the new inflation based discount and the minimum tax. This will ensure everyone pays their fair share of tax. Capital gains tax is paid on the same rate of taxation as an individual pays in the year of its realisation.

If you were to listen to those opposite, you'd think that everyone's paying the 47c in the dollar. It's completely untrue. Most people will pay 30c in the dollar in tax. That's the reality, and that's why the 30c in the dollar is mentioned again and again in relation to what we're doing in this budget and these bills. The new revenue raised will return to workers and businesses in the near term and, together with substantial expenditure savings, will improve the budget's sustainability over the medium term.

Despite what those opposite say, the budget bottom line is better by $45 billion over the forward estimates prior to MYEFO, and the deficit in 2026-27 is actually $7.8 billion less than we inherited when we came to power in May 2022. So, despite what they say—I read the commentary before—the reality in the budget papers actually shows that we are better off, and the government's saving money through what it's doing. The WATO and instant tax deduction build on already legislated tax cuts.

On Thursday, those opposite will have an opportunity to vote to give people tax cuts. Last term, they voted against tax cuts. They went to an election saying they were going to reverse them. Now, they say they're going to reverse them if they win next time. That blue horizon seems to be a long way off. For the party that say they're all in favour of tax cuts, their actions in this House—in this place—and in the Senate don't indicate they're actually in favour of tax cuts.

The combined benefit for someone in my electorate as a result of what we're doing is $2,816, and 80,000 taxpayers in my electorate of Blair will benefit from this cost-of-living tax relief. This is the first step in a significant transformation of the tax system, and it really improves it. We know from Treasury modelling that most young people, around 90 per cent, will benefit from the combined effect of these tax reforms before impacts on the housing market are taken into account. This shows that, had the changes been made decades before, those under 30 years of age would be much better off financially. We're going to really support younger people in particular and people getting into their first homes.

What's more, the modelling indicates that people with significant share investments won't pay substantially more tax and will be able to make healthy post-tax profits. That's what the modelling shows. In terms of the broader impacts, OECD research suggests there's no clear evidence these reforms will reduce investment and productivity in the economy. The prophets of doom over there seem very keen on saying that somehow capital gains tax will increase massively. According to Treasury analysis, a modest increase in capital gains tax will be 19.3 per cent to 21.4 per cent over 10 years.

This is good news, and it means that the market—I think—will start to moderate. From what I've seen of the auctions on the weekend and the news we're seeing, more first home buyers are in the market. That evidence on the weekend is very encouraging. Those prophets of doom opposite really are saying that our tax reforms will crash the housing market, but that's not the evidence so far, and I doubt that's what will happen.

We've maintained, in our budget papers and our commitment, the small-business CGT concessions. Small businesses with an aggregate turnover between $2 million and/or net assets less than $6 million will still be eligible for substantial discounts on capital gains tax, notwithstanding the introduction of a minimum 30 per cent rate on real gains. The main residence is still CGT exempt. The existing 60 per cent CGT discount for eligible affordable housing is still there.

Some of the clearance rates I referred to before show that tax changes are not the only factors that people think about when considering participating in auctions. Broader economic conditions are also at play. Frankly, we're making it easier—in this bill and the accompanying bill—for first home buyers in my community to get a crack at those auctions. That's a good thing, and that's what reform is all about.

In terms of the sequencing of reforms, these bills are the first tranche of legislation to implement the government's tax reform. Legislating significant reforms in tranches is a standard approach, and past reforms such as CGT, GST and other major changes have similarly been implemented in tranches. We seem to have endless numbers of tax law amendment bills, or TLABs, in this place. Tax law reform seems to be an endless thing that occupies the Treasury, this House and the Senate. The government is consulting with stakeholders in the areas of trusts—their nature and operation—and the treatment of capital gains tax for small and start-up businesses. Where appropriate, those details will be provided, following consultation, in legislation.

These changes build on our existing home reform to help level the playing field for homeowners. They've come about, very much, because of the Treasurer's national reform roundtable in August last year. There was a strong consensus on the need for intergenerational equity, especially in the tax system. I held my own Blair Economic Reform Roundtable with representatives from local businesses, unions, government agencies, community groups and experts. Housing and property tax reforms, along with faster environmental approvals for housing projects, were some of the big takeaways from that discussion. I know this is important.

I want to say this as I finish. I got an email from someone which, I think, sums it up very well. Howard from Ipswich said:

Thank you for the CGT, negative nearing and trusts changes in this year's budget. My wife and I bought our first home in—

Ipswich—

… last year, after years and years of watching the housing crisis worsen and knowing that our younger siblings and friends are being progressively locked out of home ownership. This budget has earnt so much goodwill from us. Every year previously that the housing crisis worsened, every year that housing values grew faster than our savings did, we became more jaded and more angry towards … major parties. This budget is the first sign for us in a long, long time that the government actually cares about fixing the problem. Please don't sell us out …

Howard, we will not sell you out. We will continue to support you and others who want to get into first homeownership.

Aaron Violi (Casey, Liberal Party, Shadow Minister for the Digital Economy) | Link to this | Hansard source

There's a lot to talk about in this bill, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, and the related bill. I'll go through why and how this bill is actually not going to help young people get into housing, the failures in the bill and also the plans that the coalition are putting forward.

But let's be very clear to start with. This legislation is built on broken promises. The Prime Minister, the Treasurer and every member opposite promised their communities repeatedly that they would not change capital gains tax and they would not change negative gearing. They've all broken faith with their communities. It means that, going forward, it doesn't matter what they say. It's irrelevant, because no-one can trust any word that comes out of the mouth of any government minister or any backbencher. And that's the reality that they have to live with. It's interesting that they've decided, at a time where there is distrust in the political system, that the best way to earn trust is to break trust. But that, again, is a decision that they will all have to live with because the reality is these changes aren't actually about making housing easier. They are not about intergenerational equity or fairness. As I said, they will actually make the situation worse for young people.

The Treasury secretary, Jenny Wilkinson, let the cat out of the bag by accident, I assume, last week when she said, 'Revenue needs to be raised from somewhere.' And that is the reality of this broken promise by this government. It's about raising more revenue for their spending program. This government is taking $77 billion in increased revenue—that's taxes. That's more taxes on the Australian people—on mums and dads, on single parents, on families, on small-business owners, on community members doing their best, on 19- and 20-year-olds trying to get ahead. More taxes are coming for you under this government.

But, as a coalition, we want you to keep more of your money when you work hard and you get a pay increase or you work overtime. As you get paid more, you have to pay more tax through bracket creep. But the coalition has committed to indexing the tax rate to make sure that bracket creep does not happen. So every time you get a pay rise you will automatically get a tax cut.

There have been lots of questions and lots of talk about tests this week. Well, there's a test coming for those opposite, because an amendment to this legislation will put that tax-back guarantee to the vote this week, and every member opposite will have a choice. They talk about supporting workers. Well, if you want to support workers, you sustainably and systematically support them by indexing the tax brackets. Will they vote for lower taxes, or will they vote for higher taxes? We're about to find out from this government. That will make tangible differences, every time you get a pay rise—not waiting 12 months, begging the Treasurer, 'Please, Sir, I want some more; please give me a tax cut.' You'll get it no matter what. And it will force governments to be honest. It will force governments to either spend responsibly or, if they want to increase taxes, go to the Australian people and explain to them why they are increasing their taxes. No more smoke and mirrors from this government.

In addition, we'll have a future generations fund, which will make sure that, again, governments are held accountable and are honest. The trick this Treasurer likes to play when it comes to revenue is to set a price for commodities—and yes, rightly, it should be conservative—and then, when the price comes in higher and they collect more revenue, this Treasurer spends it all on his vanity projects, not in the best interests of the Australian people.

The coalition has said that, with our future generations fund, if there is an increase in the tax take because of commodity prices, 80 per cent, as a minimum, will be locked away to pay off debt to support the future generations of this country and to invest in nation-building infrastructure that will actually drive productivity and economic growth in this country. And of that investment in infrastructure, 25 per cent will go to the regions, because they represent 25 per cent of our country. They deserve their fair share. They also deliver so many benefits. They feed our country. They are a huge exporter in this country. So it's right that regional Australians get looked after.

That also will instil discipline in governments. They will not be able to just spend those revenue upgrades that they had nothing to do with. This Treasurer's books have looked better only because of bracket creep and commodity prices that he's had nothing to do with. And he's wasted it all. This will put fiscal discipline back into the budget.

But we will also make sure that we tie migration to housing, because housing is about supply and demand. The worst part about this legislation—and the member for Blair, who has now left the chamber, talked about the budget papers—is that the budget papers confirm that these tax changes will deliver 35,000 fewer houses for the Australian people. The government's own papers confirm that their changes to negative gearing and capital gains tax will deliver fewer houses for the Australian people. Yet we have the Prime Minister and the Treasurer, the housing minister and the member for Blair saying—and those following will say the same thing—that it's all about supply. Well, these changes will make it worse.

We saw this week the RBA confirm, through a paper found through FOI that the government wanted hidden, that migration is a key part of housing prices. It also showed that in the first four years of this government they have failed the Australian people when it comes to housing. It's what we already know. It's what every Australian already knows. The question for the Minister for Housing is, what's next? The minister was shuffled out of Home Affairs because the minister failed, and is now in housing but clearly failed. So let's see where the minister is shuffled to next.

We also know that backing small business is so crucial, because small business is the engine room of the economy. Small business creates jobs. It helps families. It helps communities. I spend a lot of time at sporting clubs in my community. There are a lot of sponsorship signs on the sides of those grounds. They're small businesses, family businesses, in my community—not big businesses. That's why we will have the instant asset write-off increased to $50,000 and put in permanently so business has that certainty to invest, driving productivity and economic growth.

But when it comes to these capital gains taxes, it will cruel small businesses that want to get ahead, particularly start-ups. For start-ups, one of their ideas is that they want to sell. They want to get bought out. They are looking to increase significantly, and these tax changes will decimate founders and tech startups and small businesses. But it's not just the owners that will pay the price. Those young people that are working at a large corporate organisation or who straight out of university that don't want to start a business but want to work in a small business or a startup or take stock options—it's something I did when I left Mars and a corporate career to go to a tech startup.

Stock options mean you're taking generally less salary, but you're taking a part of that business, hoping that that business will continue to grow and be successful. But, under these changes, young people will be punished for joining startups and taking stock options. It's going to make it harder for founders to recruit talent. It already has made it harder, because founders are talking about young people rescinding offers and saying, 'No, I can't come and join you, because of the uncertainty of these capital gains tax changes.' That is impacting small businesses and the tech sector today. But there are also young people that took the risk five or six years ago. They started at a tech startup. They've been there for four or five years. They've built options. They are literally on the verge of listing and going public, and their hard work is about to pay off so they can get a deposit for their house. These changes have undermined all that hard work, because suddenly the tax has been changed for them.

We also know that we need to continue to support people. The process of how we do these complicated tax changes is important. This government are rushing this through, and they are going to try and play a political game here this week. The backbench are going to wave it through, because they're not allowed to have their own opinion. Otherwise, they get kicked out, like Senator Payman. But it's the Australian people and it's the community that really pay the price. I want to quote from John Kehoe, the economics editor at the AFR and a former Treasury official, about this process and about this prime minister. He said:

Costello and Keating were interested in the principles of good tax policy.

Chalmers and Anthony Albanese don't seem to care. It appears to be all about politics. They don't have the political skills, technical understanding or policy interest to explain complicated tax policies to voters like Costello and Keating did.

They are approaching the task like the student politicians they once were.

That sums up very well from former Treasury official John Kehoe, the economics editor—we also saw, last week in the Australian, that government backbenchers were confirming that they didn't understand the changes that were happening.

They themselves do not understand the tax changes that are happening. They're taking the word of the Prime Minister and the Treasurer. Good luck with that. What chance do business owners have? What chance do small businesses have to understand these changes, if government backbenchers are going to vote for them sight unseen, unknown? In their own words, they don't understand it. That's probably why they don't understand that it's going to make it worse—35,000 fewer houses will be built because of the changes to negative gearing and capital gains. As I said, these are the Treasury's own words. They're actually going to make this situation worse.

As a coalition, we know that supply is a key part of the housing challenge, and that's why we're investing and committing $5 billion to build that critical infrastructure that will get more houses into the system. It will get more houses built. It will actually make it easier for young people to get into a house. We have a lot of spin from this government. One of the lines they like to use is that they're consulting. We've had Premier Minns and Premier Cook, both Labor premiers, say that this budget needs to change and is wrong. The member for Parramatta, the member for Bennelong and the member for Chifley have all spoken out against these changes. They've forced the Prime Minister to admit that he's going to consult. However, we know that this is going to be a sham consultation, because the Treasurer himself confirmed it in his own speech where he literally contradicted himself when he gave his speech introducing the bill.

Let me explain to those business owners and small business owners that are hoping this government might listen—they're not listening. I'm going to quote the Treasurer:

Returning to indexation across all asset classes ensures investments are treated in a neutral way and that we don't create a new distortion.

There it is. The Treasurer confirmed that he does not want to make any changes. He does not want to create a new distortion. But look at the hide of this person! In the same speech, he contradicted himself. He said:

As outlined in the budget papers, the government is consulting with stakeholders on the treatment of capital gains of small and startup businesses …

Treasurer, you can't have it both ways. Either you're either having no distortions or you're consulting. Again, this treasurer either does not understand his own policy, his own economic plans, or is misleading the Australian people and small businesses and startups in this country. But we see it again in the fine print. In the same speech by this treasurer, he said:

Where appropriate, these details will be finalised in subsequent legislation following consultation.

'Where appropriate'—there's a fair chance that, after they rush this through, the Treasurer is not going to think any changes are appropriate and he's been misleading the business community, startups and his own backbench.

But, even then, can we really trust this treasurer? Can we trust this prime minister, a prime minister that said, 'My word is my bond'? He said that he wouldn't break faith with the Australian people. He has continued again and again, time after time, to break faith with the Australian people. The hubris, the arrogance and the disrespect to the Australian people are staggering. It will stain his legacy as a prime minister. It will stain the legacy of all those opposite that blatantly misled their communities at the last election and have blatantly walked into their caucus and sat quietly and followed orders from the Prime Minister and the Treasurer. They've betrayed themselves. They've betrayed their communities. They've betrayed the Australian people. And, just like Icarus, when hubris catches you, you pay the price.

Tom French (Moore, Australian Labor Party) | Link to this | Hansard source

Budgets are ultimately about choices. They are choices about what we value, what we reward and what kind of economy we want to leave behind. This bill makes a clear choice. It backs workers. It backs first home buyers. It backs productive investment. It backs a tax system that is fairer, simpler and better aligned with the country Australia needs to be. I rise to support Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the related bill. This is a significant tax reform, but its purpose is practical. It cuts taxes for working Australians. It makes tax time simpler. It supports more Australians into homeownership. It begins to remove distortions in the tax system that have, over time, worked against fairness and productivity.

I speak in this debate as the member for Moore. Moore is one of the best places in Australia to raise a family. From Ocean Reef to Iluka, down through Mullaloo, Kallaroo, Hillarys, Sorrento and Duncraig and across to Joondalup, Woodvale, Padbury, Heathridge, Kingsley and Currambine, people work hard to build decent lives. They do not go looking for special treatment. They are looking for a fair go. They want to work, save, invest, raise their children, start businesses, retire with dignity and leave something behind for the people they love. That is aspiration, but aspiration needs a fair starting point. For too many people in my electorate, particularly younger working people and families trying to buy their first home, that starting point has moved further and further away. A young couple in Moore, both working full time, can look at the suburb they grew up in and realise they are not simply being asked to climb the property ladder. They are being asked to reach for a first rung that keeps moving. That is not a failure of effort. It is a system out of balance.

Before entering this place, I was a qualified electrician, and I worked on building sites across Perth and in the resources sector in the Pilbara and the Goldfields. I know what it means to buy tools, keep receipts, claim deductions and hope there is still something left after the bills are paid. I later worked as an industrial lawyer representing firefighters and electricians who were not asking for favours; they were asking for decent wages, secure jobs and a system that didn't quietly shift more and more of the burden onto people who work for a living.

I also come from a small business family. My parents ran pubs and run a small painting contractor business. So when small-businesses owners in Moore write to me about tax reform, I do not see a line in a spreadsheet; I see payroll, risk, family pressure, debt, long hours and the kind of unpaid work that rarely makes it into the economic commentary.

Since the budget, my office has heard from many constituents. I've heard from young people trying to save for a deposit. I've heard from parents worried their children will never be able to buy near the community where they grew up. I've heard from small-business owners concerned about capital gains tax, trusts, succession planning and the sale of businesses they have spent decades building. I've heard from retirees who are anxious because some of the claims being circulated online have been designed to frighten rather than inform.

Those concerns deserve to be heard properly. But hearing concerns does not mean defending every part of the status quo, because the status quo is not neutral. It is a set of policy choices. It is a set of tax rules. And, over time, those rules have increasingly rewarded passive asset ownership over work and investment in existing housing over investment in new supply. That is the problem that this bill begins to address.

This legislation contains four central measures. First, it introduces the working Australians tax offset. Second, it delivers a $1,000 instant tax deduction for work related expenses. Third, it reforms capital gains tax by returning to cost based indexation, with minimum tax on capital gains accruing after 1 July 2027. Fourth, it limits negative gearing for future residential property investment into new builds. These measures fit together. They cut taxes for workers. They make tax returns easier. They support homeownership. They direct investment toward new housing supply. And they begin to make the tax system more even handed between income earned from work and income earned from assets.

The working Australians tax offset is a tax cut for Australians who earn income from work. That matters for most Australians, for whom income does not come from complex structures or passive capital gains. It comes from shifts, rosters, apprenticeships, small businesses, classrooms, hospitals, workshops, building sites and offices. In Moore, it comes from nurses at the Joondalup health campuses, the teachers in our local schools, the tradies on site before sunrise, the retail and hospitality workers, the police officers, the aged-care workers, the small-business employees and the parents working hard to keep their household moving. This measure recognises that work should be rewarded. It is permanent tax relief for working Australians. It helps people keep more of what they earn. And it builds on the tax cuts this government has already delivered.

This bill also introduces a $1,000 instant tax deduction for work related expenses. That is a practical reform. Anyone who has ever lodged a tax return after buying tools, uniforms, safety gear, stationery, training materials or other work related items knows how quickly tax time becomes more complicated than it needs to be. For many workers, the question is not whether they have work related expenses; they do. The question is whether the paperwork, receipts and recordkeeping are worth the return. This measure makes the system simpler.

Workers with more than $1,000 in genuine work related expenses can still claim more. Charitable donations, union and professional association fees and other deductions can still be claimed on top. This is not taking anything away from workers with higher genuine deductions. It is saying that millions of Australians should not need to maintain a small forensic archive in the glove box just to lodge a tax return. That is sensible reform. It saves time, it lowers compliance costs, and it puts money back into workers pockets.

One of the most contested parts of this bill is the housing tax reform, and I want to deal with it directly. Supply remains essential. We need more homes, we need more affordable homes, and we need more diverse housing near transport, schools, shops, services and jobs. In Moore, we need housing options for young families, key workers, older Australians looking to downsize and people who want to stay connected to the community they know.

But supply cannot be the only answer, when the tax system continues to help investors to compete against first home buyers for homes that already exist. Negative gearing will continue to support investment in new homes, because supply matters. But we should direct that support to homes that add to supply, not to investors competing with the first home buyers for those existing houses. That is the principle. Existing investment decisions are protected. If someone already owns an investment property, or made an investment decision under the existing rules, they can continue under those rules. Nobody is having the rug pulled from under them. What changes is the direction of the incentive. Future support through negative gearing will be directed to new builds. That is fairer and a more productive use of the tax system. If the Commonwealth is going to support housing investment through tax settings, then that support should help create new homes.

On the capital gains tax, the government is returning to a fairer principle: tax real gains, not inflation. The current 50 per cent discount is blunt. It does not accurately measure inflation, and it can overcompensate some investors and undercompensate others. It also creates distortions in investment decisions. Cost base indexation is more coherent. It recognises that not every increase in the value of an asset is a real increase in wealth. If part of the gain is simply inflation, the tax system should recognise that. Under this reform, investors are taxed on real gains, not merely inflationary gains. That is not an attack on investment; it is a better way to tax investment.

Some people will pay more under the new arrangements; some may pay less. It will depend on the asset, the holding period, inflation and return. That is how proper tax design works. It does not treat every nominal gain as though it is the same. It looks more closely at the real economic position.

The capital gains changes apply across asset classes, because the government is not trying to create new distortion while fixing an old one. If we change the rules for one asset but not the other, capital would simply move towards the next tax advantage. That would not be reform; that would be administrative whack-a-mole. And the tax system already has enough moving parts. The objective is to make investment decisions more neutral. Investment should flow to where it earns the best real return, not to where the tax preference is the greatest.

I also want to address the concerns raised by small-business owners in Moore. The existing small-business capital gains tax concessions remain. That matters. Eligible small businesses can continue to access concessions that may reduce or eliminate capital gains tax when a business is sold. The local family business, the contractor who has built something from scratch, the small employer with staff to pay, the tradie who has spent decades building goodwill, the business owner who has put their house on the line to keep people employed—those people deserve certainty and respect. They should not be casually dragged into a scare campaign that pretends every small business will be hit the same way. That is not accurate. There will be, also, further consultation on more complex cases, including firms with low or zero cost bases, start-ups and small businesses. I welcome that.

Tax law is complex. Anyone who says otherwise has either never read it or has been unusually brave in public. Major reforms are often legislated in stages. That allows the core policy settings to be established, while the more technical issues are worked through properly. That is not a flaw; that is responsible lawmaking.

I also want to address the misinformation directly. This bill is not a tax on inheritance. It is not a tax on the family home. It is not the end of aspiration. It does not mean every Australian will pay more capital gains tax. It does not abolish investment. It does not punish work, enterprise or small business. It is a reform that says that the tax system should work in the interests of more Australians. It says that workers should keep more of what they earn. It says that first home buyers should have a fairer chance. It says that investment should be directed toward real economic value, including new housing supply. And it says that we should not keep leaving the hard problems for someone else to fix later.

Some constituents have raised another issue with me. They've said that these reforms were not all put to the electorate in this form. That concern should not be dismissed. Trust matters in public life. When people feel blindsided, we should listen. But government also has a responsibility to govern. Housing affordability has become one of the defining economic challenges of our time. Tax settings that may have seemed sustainable in one era can become unfair and distortionary in another. The responsible course is not to pretend the problem is smaller than it is. The responsible course of action is to act, explain, consult and be accountable for the decision. That is what I'm doing as the member for Moore. I'm not pretending every person in my electorate agrees with this bill. They do not. I'm not pretending that every concern is unreasonable. It is not. But I am saying the government's position is defensible, necessary and directed at a very real problem.

We cannot keep telling young Australians that homeownership is central to the Australian dream, while refusing to examine tax settings that make it harder for them to compete; we cannot keep saying we value work, while allowing the tax system to increasingly favour asset income over labour income; and we cannot keep saying we support housing supply, while providing the same tax advantage to the purchase of existing homes as to the construction of new ones.

This bill cuts taxes for workers; it simplifies tax time; it protects existing investment decisions; it directs negative gearing toward new housing supply; it taxes real capital gains, not inflation; it maintains existing small-business capital gains concessions; and it provides a framework for further consultation on complex issues. That is responsible reform.

There is always a reason to avoid tax reform. There is always a reason to wait. There is always another report, another scare campaign, another vested interest and another person insisting that the system is broken but their particular part of it must never be touched. But the workers carrying the tax burden have waited long enough. The first home buyers competing against tax preferred investment have waited long enough. The young families in Moore, looking at house prices and wondering whether the system still has a place for them, have waited long enough.

This bill will not solve every problem in the housing market or the tax system. No single bill could. But it makes a clear and necessary choice. It backs workers. It backs first home buyers. It backs new housing supply. It backs productive investment. It backs a fairer and simpler tax system. That is a fair choice, that is a Labor choice, and I commend the bill to the House.

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

This bill, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, goes to the heart of what kind of country Australia wants to be. It also goes to the heart of who these two political parties are. From the Labor Party, what we have heard is that this is a bill to allow workers to keep more of what they earn. Nothing could be further from the truth. The next generation will be taxed far more than my generation ever has been. Every year, there is a tax increase under this Labor government through bracket creep tax. Every single year, inflation takes an increasing amount of taxes from Australian workers. They get poorer every single year, by design—through a built-in tax hike. Under the coalition, by abolishing Labor's bracket creep tax, we will give every taxpayer a tax cut every year for the rest of their lives.

In the Labor Party they believe in taxing and taking more of what you earn and redistributing it. Fundamentally, their party believe that that money is better in the government's pocket and not yours, and they know where to put it better than you do. And they're looking for increasing amounts. How much? There has been $77 billion of extra taxpayer revenue taken from households across Australia—ripped out of your bank accounts, ripped off your kitchen tables, ripped out of your small businesses and thrown here in Canberra, for the people in this parliament to decide where that money goes, not where you think it should go.

At the heart of the Liberal Party, we believe not only is that $77 billion more; we believe in putting another $22½ billion more in your pocket through giving you a tax cut every year for the rest of your life, because fundamentally we believe that that money is better decided and used by families, by working individuals and by businesses because you have earnt it. The government is not doing a good enough job with what it's already taking to warrant being given more.

Now, what's almost even worse is that no-one voted for these new taxes. Not only did they not vote for them; the Prime Minister himself promised on more than 50 separate occasions, actually looking at reporters with disdain and distaste when asked if he would touch CGT or negative gearing—condescendingly looking at reporters through the election campaign—saying, 'I could not be any clearer.' This is not just a white untruth; this is a bald-faced untruth.

Australians made their decisions in good faith. Families planned retirements in good faith. Young families planned saving for a deposit, buying a house and investing in ETFs in good faith. Small-business owners built their businesses in good faith. Property owners provided rentals in good faith. Then, after the election, the Prime Minister has pulled the rug out from under the feet of Australians and their businesses while breaking a promise he made no fewer than 50 times. If this was such a good idea, why was the Prime Minister not honest about it twelve months ago, on one of those 50 occasions? Why not even give us a hint that there may have been doubt there? I suppose he may have been worried about an election. Well, that's weak, and it's not truthful.

The Prime Minister might try and dress this up as fairness, but Australians are starting to understand and see it for what it really is: more tax on incomes, more tax on the next generation than there was on the last, more tax on housing, more tax on savings and more tax on investments. It's more tax on people who worked, saved and sacrificed and more tax on the very people who did exactly what governments told them to do: take responsibility, work hard, provide for themselves and their families and then not be a burden on others. At the very heart of this is an untruth said 50 times. I'm not sure how the Prime Minister can have the gall now to look the Australian public in the eyes knowing the heart of that untruth.

It's almost artistry by which he does it. And I admire great artists. Picasso was a great painter. Henry Moore was a great sculptor. But Anthony Albanese is a different kind of artist, if you know what I mean. He's an artist of untruths. Picasso had his blue period, his rose period and his Cubist period; Henry returned again and again to his reclining figures through his periods. Anthony Albanese had some interesting periods of his own. There was the early Sydney Uni period—the young artist flirting with Marxist ideas at Sydney Uni, trying to paint Gough Whitlam as anything other than an economic vandal. Then came his opposition period: broad brushstrokes, soft colours, very little detail and a fair amount of finger painting. He promised that mortgages would come down, power bills would be lower by $275 and life would be easier. Australians were invited to admire the picture long before they were asked to look at the fine print in the paint.

Then came his government period. Across this period the colours became a lot darker, the lines harsher and the artistry a little less truthful. Australians started paying more and getting less. It's more at the supermarket, more on your power bills, $32,000 more in mortgages and now up to $80 billion more in tax. This was when the Prime Minister created what he thought would be his great masterpiece and what he would be celebrated for: the CGT backflip and the broken promise on bracket creep. He thought Australia would stand back, clap and admire his pieces. He thought they'd applaud his CGT hike. But art, of course, is in the eye of the beholder, and the Australian public can spot a fake. They can spot a fake in this Prime Minister and his 50 broken promises. They can spot a fake masterpiece. The Prime Minister is out there selling it, carpet bagging from electorate to electorate to electorate. Where the Prime Minister sees a masterpiece with this CGT backflip, Australians see it for what it really is: vomit on a page. It's not art. It's not reform. It's dishonest economic vandalism.

I want to read a letter from a constituent in my electorate. They asked to remain anonymous when we reached out to them, and I will respect that. But their words deserve to be heard in this parliament because behind this bill are real Australians who have real anxiety and are in real distress. They wrote:

We are writing to you in a state of hopelessness and extreme distress. It's a feeling where you feel so trapped and overwhelmed because your future has been turned upside down.

My husband and I are "baby boomers". We are part of the group that is now hated, vilified and considered the cause of all of Australia's problems.

We didn't have superannuation until it became law on 1st July 1992. We were encouraged by our parents to work hard, be frugal with our lifestyle, save wages and buy property in order to secure your retirement. We followed that advice and worked six days a week. Sunday was for church, grocery shopping, housework and gardening. We didn't travel overseas, we rarely went out for dinner or had takeaway except on special occasions, we don't do social media or streaming, we don't have gym memberships. Our two cars today are still 1990 models.

When we got married we couldn't afford to buy a house in Sydney so we lived with my parents and saved our money. We ended up buying a block of land in Queensland and thought we would build a home there when we could afford it. As I said previously we worked hard and saved our money and ended up being able to afford a deposit on a house in Sydney and we eventually paid off our block of land. Around 15 years ago we bought a one bedroom unit in Sydney and eventually and paid that off.

We recently retired and were so proud of ourselves and happy that our parents would also be proud of us as we felt confident that we would be secure in our "senior" phase of life. Our plan was to sell our land so we could travel, buy a newer car (still second hand of course), help our families and ensure that we could afford to be self-sufficient and look after ourselves in our old age.

This dream and feeling of security came to a bitter end when the budget was released. We have been trying to sell our land for sometime now but due to escalating building costs, labour shortages etc, it's not selling anytime soon. We have never received any income on this land. We are now in a situation where we must sell by the end of June 2027 June otherwise we may as well give it away.

Why does this government keep lying and changing the goal posts and not be held accountable for its despicable decisions? They are ruining people's lives. This government is causing a cataclysmic divide between races, younger and older Australians, rich and poor, workers and retirees, overseas investors and Australian investors, "mum & dad" investors with large portfolios. We used to be a unified country.

… Who Is Championing Retirees? There is very much an ageist agenda occurring. Retirees are being targeted as well as the young….There seems to be so much emphasis on negative gearing but what about capital gains tax changes and the 30% minimum tax on the net capital gain? These are affecting cash-poor retirees, retirees in general and people still working who may be close to retirement. Does anyone in politics or the media champion us?

In addition to capital gains tax changes, the government's ageist agenda has also included:

1.A reduction in the higher rebate for seniors which has been justified on intergenerational equity grounds. How ridiculous! My husband and I paid more for private health insurance all our adult life, knowing that we were funding our parents, grandparents and older Australians and one day it would be our turn. Will "baby boomers" be blamed when the public hospital system implodes because we can no longer afford to pay for private health insurance? Does anyone in politics or the media champion us?

2.Optional Hotel and Enhanced Living Fees (HELF), charged by Australian aged care providers became subject to 10% GST on November 1, 2025. This was done very quietly by the government. Shame on you. I don't know how Labour ministers sleep at night. Does anyone in politics or the media champion us?

I do not want our names or emails identified, we want to remain anonymous. We do not want to be further vilified or considered selfish or the cause of all of Australia's problems. We just want to live out the rest of our life as we envisioned, not a burden on anyone else and self-sufficient. More importantly, we made many sacrifices in our life to now be forced to give our hard earned money away to the government to supposedly help young people. Why can't we choose which young people we would like to help i.e. family and friends. Why is it being taken from us?

I am just writing to you to ask does anyone in politics or in the media champion us?

Thank you for reading this email. Hope you can do something to help us in this situation.

This letter wasn't from a wealthy caricature. It's not from some political stereotype or a political hack; it's from Australians who worked hard, lived modestly, saved carefully and tried to provide for themselves. They didn't want to live off the government. They didn't want handouts. They're not asking for someone else to pay their way. They did what generation after generation of Australians were told to do: work—work harder than your peers—save, be careful, don't go on holidays, and leave yourself secure. Now Labor looks at that lifetime of sacrifice and sees a money pot to be raided. It's a moral failure at the centre of this bill. Labor is turning Australians against one another. They hurt retirees who planned under one set of rules and are now being punished under another.

You don't fix a housing crisis by building fewer homes—35,000 fewer, from Labor's own budget papers. You don't help renters by driving investors out of the rental market. Your own budget papers' analysis shows rents will go up. You don't help first home buyers by increasing rents on one side and taxing their invested deposits with new CGT on the other. This bill is being sold as fairness, but it's about betrayal. Before a young Australian buys their first home, they usually rent. If rents rise, it becomes harder to save. If their savings and investments are taxed harder—with, in some cases, CGT doubling—it becomes harder again to get that deposit. Labor's kneecapping younger Australians twice—once as renters and then as they save for their deposit. And then Labor has the audacity to tell this country and these young people it's about intergenerational fairness. It's not intergenerational fairness; it's intergenerational fraud. This doesn't help young people. Income tax is higher for them than it ever was for me, thanks to Labor's sneaky bracket creep. CGT is up, housing taxes are up and car taxes are up.

Small-business owners know this better than anyone. For many of them, their business isn't a job; it's a retirement plan and their family legacy—the result of years of risk, stress and sacrifice. Now these small-business owners are facing taxes of up to 47 per cent. Labor says: 'Don't worry. Don't stress. You don't understand it. Trust our modelling. Ninety per cent of you will be better off.' Well, where have we heard that before? I remember Chris Bowen and Prime Minister Albanese holding up the RepuTex modelling as the most comprehensive modelling of all time.

Steve Georganas (Adelaide, Australian Labor Party) | Link to this | Hansard source

The member for McEwen on a point of order?

Rob Mitchell (McEwen, Australian Labor Party) | Link to this | Hansard source

The member's been here long enough to know to refer to members by their correct titles. That's the third time he's done that.

Steve Georganas (Adelaide, Australian Labor Party) | Link to this | Hansard source

The member for McEwen will resume his seat. I heard the member say 'Prime Minister Albanese'.

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

The Prime Minister and the energy minister. (Time expired)

Alicia Payne (Canberra, Australian Labor Party) | Link to this | Hansard source

I'm proud to rise in support of this landmark legislation that delivers the most significant overhaul of Australia's tax system in a quarter of a century—and a much-needed one. For my community of Canberra, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 is genuinely transformative, particularly for first home buyers. It's making our tax system work for the Australian public.

This legislation implements four key pillars of the government's tax reform package announced in the budget: a new working Australians tax offset, providing 13 million working Australians with tax cuts; a $1,000 instant tax deduction for work related expenses; fundamental reforms to capital gains tax; and reforms to limit negative gearing to new builds. Together, these measures will build a better, fairer, simpler tax system, reducing the tax burden for working people, helping more Australians into homeownership, delivering $3.5 billion in new measures to support businesses, including startups, and cutting compliance costs by $540 million each year. Treasury modelling released this week shows that the cumulative impact of these reforms would benefit around 90 per cent of young Australians and that, had these settings been in place since the year 2000, 90 per cent of Australians would have been better off by the time they turned 30.

Canberra is home to tens of thousands of working Australians: APS employees; nurses and midwives at the Canberra Hospital; teachers at our schools, tradies building our city; retail and hospitality workers; and the many small-business owners who are the backbone of our city. Every one of those workers deserves to keep more of what they earn. Schedule 3 of this bill introduces the $250 working Australians tax offset, a permanent structural tax cut for 13.3 million Australians who receive income from work, commencing from 1 July 2027. That includes approximately 6.3 million women. This is a lasting improvement to the architecture of our tax system. It will increase the effective tax-free threshold for working Australians by $1,785 to $19,885, or $24,985 for those also eligible for the low-income tax offset. When combined with our three previous rounds of tax cuts and the instant tax deduction, the average Australian worker will be almost $3,000 better off in 2028. Crucially, this measure is deliberately designed to support younger Australians. Millennials and gen Z are expected to make up around two-thirds of those who benefit. For many Canberrans who are early in their careers, renting in our city, paying off their HECS debt and trying to save a deposit, this is real and meaningful relief. This measure recognises the fundamental truth that, for most Australians, income comes from work. Our tax system should reflect and reward that.

Schedule 4 delivers on one of our key 2025 election commitments: a $1,000 instant tax deduction for work related expenses from the 2026-27 income year. Canberra workers spend money to do their jobs—on uniforms, tools, home office equipment, professional development and more. Every year, millions of Australians spend hours gathering receipts and filling in ATO forms to claim those costs back. That is time they could spend with their families or doing anything other than tax administration. The $1,000 instant deduction changes that. For 6.2 million workers in 2026-27, with an average tax saving of $205, this measure puts money back in pockets and takes the headache out of tax time. The ATO estimates it will save individuals $380 million in compliance costs every year. Importantly, workers with more than $1,000 in expenses can still claim the full amount. Charitable donations, union fees and professional association memberships remain fully claimable on top. This is a floor rather than a ceiling, and it makes the system simpler for everyone.

Of all the challenges facing young Canberrans, none are more acute than housing affordability. Canberra consistently ranks among the least affordable cities in Australia for first home buyers. The median house price has placed ownership out of reach for a generation of people who grew up here and want to build their lives here. The causes are many and complex, but our tax settings have been a significant part of the problem for too long. In 1999, the Howard government replaced capital gains tax indexation with a flat 50 per cent discount. The reporting of the Senate Select Committee on the Operation of the Capital Gains Discount this year found that this concession, in combination with negative gearing, has skewed housing ownership away from owner-occupiers towards investors. It has distorted investment decisions and encouraged speculative leverage into established properties, driving up prices at the expense of aspiring homeowners.

The evidence is damning: house prices have risen far faster than wages. The proportion of young Australians who own a home has collapsed. Canberrans who rent because they cannot afford to buy are doing so in a market shaped in part by tax settings that reward property investors over working families. Schedules 1 and 2 of this bill fix that, not by punishing investors but by redirecting the incentive structure towards new supply and away from established property speculation.

Schedule 2 limits negative gearing on residential property to new builds from 1 July 2027—the properties purchased after budget night. This is a sensible, targeted reform. If you already own an investment property or have already entered a contract, nothing changes. The government is fully grandfathering the existing arrangement for those who already made decisions based on current rules. There is no retrospective impact. For new investment, the message is clear. We want to incentivise building new homes, not bidding up the price of existing ones. Negative gearing will remain available for new builds. Commercial property and other asset classes like shares are unaffected. The modelling shows this reform, combined with the CGT changes, will support 75,000 more Australians into homeownership over the next decade. For Canberra, where the housing market has been particularly tight, this is a meaningful shift. More supply and less investor competition for established dwellings mean more opportunity for first home buyers in suburbs like Curtin, Narrabundah and Watson.

Schedule 1 replaces the 50 per cent CGT discount with cost base indexation for gains accrued from 1 July 2027, accompanied by a 30 per cent minimum tax on net capital gains. This reform returns the CGT system to what it was originally designed to do: tax real gains not inflationary gains. Under the new arrangement, investors will index the cost base of their assets in line with inflation. They will only pay tax on what they have genuinely earned above the rate of inflation. That is fairer. The 30 per cent minimum tax ensures that investors cannot simply defer capital gains to years when their income is low to minimise their effective tax rate. It ensures gains are taxed at a rate commensurate with what most workers face throughout their working lives. Importantly, no gains accrued before 1 July next year are affected. The 50 per cent discount will apply to all gains up to that date, using the asset's value at 1 July 2027 as the new cost base. There is no retrospective tax. These are changes to how future gains are treated.

Property investors who buy new builds will have the option to choose either the 50 per cent CGT discount or the new indexation and minimum tax arrangements when they sell, ensuring the reform continues to incentivise investment in new housing supply. Recipients of certain government payments, including the aged pension and JobSeeker, will be exempt from the minimum tax, protecting those on fixed or low incomes. The four existing small business CGT concessions are preserved in full. The vast majority of small businesses are eligible for these concessions, meaning they can pay reduced or no capital gains tax on the sale of their business. The government has also committed to further consultation on how the new arrangements apply to startups and small businesses with low cost bases, which is a recognition that these sectors need tailored treatment. For Canberra's substantial population of public servants and professionals who hold shares or investment properties as part of their long-term savings, it is worth noting modelling shows that, for someone who invested in the Australian share market over the past 10 or 20 years and received average returns, they would have done the same or better under the indexation system than under the 50 per cent discount.

This bill puts in place the core provisions that apply to the broadest range of taxpayers, providing certainty to individuals and market participants while the government continues consultation on more complex and specific issues. The new revenue raised will be returned to workers and businesses in the near term and, together with expenditure savings, will improve budget sustainability over the medium term. This is responsible reform. It's a rebalancing of a system that has, over decades, drifted away from its original purpose.

The coalition has chosen over the past few weeks to side with the status quo, with a tax system that has contributed to housing unaffordability for generations of Australians. It is a choice to protect the 1999 distortion rather than to fix it. It's a decision to keep more young Australians out of the housing market. It's a decision to back those with the most against the interests of those with the least. It's disappointing but not unsurprising. The Albanese Labor government is choosing differently. We are choosing to back working Australians over the tax advantages of the already wealthy. We are choosing to help young Australians into homeownership rather than entrench investor advantage. We are choosing to reform. For the people of Canberra—the young professionals sharing a house in Ainslie who can't save fast enough to keep up with rising prices, the nurse doing a double shift at North Canberra Hospital, the teacher spending their own money on classroom supplies or the small business owner who has worked their whole life to build something worth selling—this bill is about a tax system that finally works for them. It builds on everything this government has done—the stage 3 tax cuts, the cost-of-living relief and the housing investments. It is the next step in making our economy work in the interests of more Australians and in taking our intergenerational responsibilities seriously, rather than leaving these problems for the next generation to solve.

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

Let me take your mind back to just over a year ago on 3 May 2025. I don't know about you, but I remember organising a whole lot of volunteers to stand outside designated polling booths, holding material for members of the public to take, telling them what I, as the member for Mallee, had done and, importantly, was committing to do for them if the coalition were elected in the 2025 election. I'm just checking with the House, because, in many ways, it seems like the election never happened. As far as I remember, parties normally take policy positions to the election, and we all remember the Prime Minister swearing that there would be no changes to CGT, no changes to negative gearing and no changes to trusts.

When I look at the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, all of those promises are broken. Our Australian democracy relies on parties taking promises to the electorate and implementing them if they're elected, not talking a whole lot of baloney at the election and doing something else when they get a thumping majority.

This bill represents two things. Firstly, it represents the single biggest threat to our Australian democracy because it upends global precedent whereby the party that forms government does a whole range of things it swore it would do in the lead-up to the election. This bill turns 3 May 2025 election into a sham. Labor's election win was a hoax on the Australian people. In the spirit of Winston Churchill, I say that Labor has engaged in terminological inexactitude. They have put on a masterclass in 'factual Jim-nastics'.

We know that Bill Shorten's tax plans—actually taken to an election; credit to him for doing that, as John Howard did with the GST—were comprehensively rejected by the Australian people. Labor lost. So, instead, Labor spread a whole lot of fairy dust at last year's election while they secretly plotted to roll out the Bill Shorten tax agenda. The Treasurer shrugs and smirks and thinks the government can burn off some one-term Labor MPs, burn off some primary vote and do this dirty, dirty deed two years out from a federal election, taking the Australian public for mugs.

Labor thinks the Australian public won't remember this insult. Labor thinks they'll use the supposed rivers of revenue from these measures to advertise on social media and hire the influencers—just as they did in the budget lock-up—to gaslight Australians, saying, 'These broken tax promises are good for you and in your best interests.' It's absolute rubbish.

Secondly, this bill represents the Treasurer drawing to himself ever-increasing power and showing contempt for the parliament, as though the rest of us are just a rubber stamp. The bill contains so many elements for the Treasurer to later decide on at his whim. It makes me wonder whether his next budget saving is to shut down the parliament. Clearly, he doesn't think he needs us. It's little wonder current community sentiment on voting intention is 'a pox on all their houses'. The Albanese Labor government is trashing the reputation of this place and of members of parliament while burning trust on a bonfire of our democracy.

Parliament must reject these bills, and I make it very clear the coalition will be repealing these tax changes when we come to government. They are undemocratic, they are economically destructive and they are just plain wrong. Having run out of money, as the highest spending government in 40 years outside of a recession, Labor is coming after more of yours. Labor's core belief, in its socialist heart, is redistribution of wealth to those who didn't work to create it.

Peter, from south of Horsham in my electorate of Mallee, raises a perfectly valid question as a self-funded retiree. If he was to earn a salary, he would get the $18,400 tax-free threshold, but, by earning money from modest share investments, he will be up for paying a minimum of 30 per cent tax on the very first dollar he earns. There will be widows and widowers who were set up for their retirement, living very modestly indeed in self-funded retirement. They are the people we should be upholding for not being a burden on the taxpayer purse despite having every right to put their hand out for an age pension. Labor is targeting these same older men and women. They are to be taxed from the very first modest cent they rely on to survive. It is another disgrace. Little wonder the Treasurer is adding powers in this bill to have second thoughts—an oopsie, if you like. 'I hadn't thought of that, and, trust me, I'll take your earnings and tax them fairly.' I would strongly suggest that this is simply not true. The Albanese Labor government and their Treasurer are not worthy of anyone's trust.

Speaking of trust, in their politics of envy, Labor have long harboured their dream, their passionate desire, to crack open trusts and get at the money inside them. And here it is, in its gory detail, taxing trusts such as testamentary discretionary trusts. They are much more common than you might think, and underpin a great many small to medium family businesses—arguably, hundreds of thousands—including in my electorate.

Leader of The Nationals Matt Canavan and I met with Peter Knights, an accountant, in his Knights Norfolk accounting offices in St Arnaud this last month. Peter describes the taxes in this bill as 'underhanded' and 'a death tax'. Peter explains:

These assets were previously exempted and so from a family farming point of view, we have to make sure we can take assets through to the next generation, to those most capable of producing for the benefit of everyone else.

When times are tough, traditionally, family farms still show up, but corporate farming doesn't.

He continues:

So this is also now a productivity issue. If we put a tax barrier to those making the transfer of say, a farm, it puts that business at risk. This will put a lot of farms at risk and even food production at risk.

I've already had one family farmer say they'd scaled back their farming activity in recent years, due to Labor's attacks on the profitability of their farm, to what they now call a hobby farm. Now they aren't sure whether, with these new changes, it's worth farming at all.

Amid Treasury's fairytales and fantasy stories told in the budget papers on estimates and assumptions—under the thumb of the Treasurer—are unbelievable revenue projections from these tax measures. If you believe that revenue will materialise, you believe in fairies at the bottom of the garden. Cause and effect, basic physics and economics—the market will respond. Has the government modelled the rush to the age pension, part pension or full pension, to escape Labor's tax-grabbing clutches?

There is a Senate inquiry into this bill, reporting later this month. But, in Labor's contempt for debate and transparency and for this institution, they will no doubt seek to slam this bill through before we have the Senate report. As I said last sitting week, this is more than a lawyers' picnic; lawyers and accountants will be popping the bubbly at all the advice they will have to give, with more compliance and red tape for business. But, more seriously, lawyers and accountants will be feeling morally challenged because they will have farmers and small businesses coming to them saying, 'I can't afford to deal with this.'

The statistics show that, in my home state of Victoria, a huge number of regional small businesses are ready to close their doors. In fact, many in my electorate are closing or have closed. This bill is likely to be the last straw. Businesses will close. They'll just give up. Farmers will say, 'Maybe I will sell to the big corporate who wants my property, or take the money from the foreign owned energy company for wind turbines or solar panels, or take the money from the Victorian government for the transmission line and land access.' Do you now see the cunning masterfulness of this smirking treasurer? Put farmers and small businesses on the edge of the financial cliff so that they just jump into the manufactured ocean of government dependence.

Let's remember that as many as 25 per cent of Australians receive direct welfare payments, and 18 per cent of Australians work in the public sector. That's as much as 43 per cent of Australians that depend on government for their incomes. If you add in all the government subsidies, there would only be a small minority that receive no government payment at all. Yet these are the people Labor has gone after with this bill: the self-funded retirees and the small businesses built by hardworking Australians—families who have worked for generations for long hours to establish what they now have.

The bill confers sweeping powers on the Treasurer on CGT, negative gearing and the working Australians tax offset, where the Treasurer gets the final say.

As shadow minister for regional communications, I have to add that the communications minister has done this as well with the universal outdoor mobile obligation bill, or the UOMO bill—given herself powers to ultimately determine what's in or out, not the parliament. Labor are cunning with marketing, terrible in government. They're not just moving the goalposts; they're putting them on wheels for the Treasurer to move wide enough to ensure enough revenue is going through the big sticks.

These bills grant extraordinary discretionary powers to the Treasurer, perhaps unprecedented in their scale, for the Treasurer to decide so many aspects of these laws—I'm going to coin them collectively as 'Chalmerama', and you might imagine how you'd spell that: what is a 'new residential dwelling', the apportionment method for 'transitional gains', adding CGT asset classes for the 50 per cent discount and exemptions from income support payments from minimum tax. That's interesting given Peter from south of Horsham's concern. If he isn't on any form of income support payment, he'll pay the minimum tax on the first cent he relies on as a self-funded retiree. But, if he's on any support payment, say the bare minimum part pension, he's safe. What a mess!

Another one in the 'Chalmerama' is the exemptions from—

Steve Georganas (Adelaide, Australian Labor Party) | Link to this | Hansard source

I ask the member to refer to people by their correct titles.

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

Another one in the Treasurer's portfolio of decision-making is the exemptions from quarantining for additional dwelling uses or their purposes, or their exclusions as residential dwelling, similarly additional business or enterprise exemptions, entity class exemptions.

But wait, there's more. The Treasurer is also giving himself power to set an alternative method for working out the maximum amount of the working Australians tax offset: the WATO. This is the wage offset of allegedly $250. But, remember, bracket creep will see the average worker pay $2,000 more annually, so that's as useful as Labor's $275 energy bill relief—which basically didn't happen—where your energy bill is now thousands of dollars higher. But the Treasurer wants to shift the goalposts on the WATO as well.

The coalition has promised with our tax back guarantee that we will index the tax brackets and halt bracket creep once and for all, putting more of what you earn in your pocket—a fixed change, not something up to the Treasurer of the day to determine. The Treasurer, today in question time, repeatedly said 'we're bringing back bracket creep' like it's a good thing. It is not. And, in case you missed it, we will repeal all the unmandated tax grabs in this bill. This is an attack on aspiration.

Even for their income tax deduction, announced well before the budget, of $1,000 annually without receipts, I hear that, on average, people might get $250 at best from that measure. It's little wonder the Treasurer wants easily movable goalposts, and it's little wonder small businesses are using AI to photoshop the Prime Minister in as their new 47 per cent business partner.

These are terrible, undemocratic bills that set a shocking historical precedent. The coalition opposes them. We support lower taxes for working Australians and will be making that point in this debate and at the next election.

Carol Berry (Whitlam, Australian Labor Party) | Link to this | Hansard source

I rise today to speak in support of these two important bills, which mark the first stage of the most significant transformation of the tax system in over a quarter of a century. These bills deliver on three key objectives: cutting taxes for every Australian worker, making it easier for people to buy their first home and better aligning the tax treatment of income associated with labour and income associated with assets.

The first bill, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, amends taxation legislation to replace the 50 per cent capital gains tax discount for individuals, trusts and partnerships with cost based indexation and a 30 per cent minimum tax rate on capital gains accruing from 1 July 2027; limit negative gearing for residential property investments to new builds from 1 July 2027; introduce the working Australians tax offset, a non-refundable tax offset for Australian residents who earn labour income; and introduce a $1,000 standard deduction for work related expenses for Australian taxpayers. The second bill, the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026, amends the Income Tax Rates Act 1986 to impose a minimum 30 per cent tax on capital gains that are realised on or after 1 July 2027.

The reforms contained in these two bills will build a better, fairer, simpler tax system by reducing the tax burden for over 13 million workers, supporting 75,000 more homeowners into the housing market and delivering $3.5 billion in new measures that lower taxes for businesses and startups. It's important to remind the House that the Albanese government has already delivered tax cuts for every Australian taxpayer by bringing rates down and pushing thresholds up from 1 July 2024. Another tax cut will come into effect from 1 July this year, which is only four weeks away, and a third tax cut will be introduced from 1 July next year.

This bill introduces two more tax-relief initiatives: the $250 working Australians tax offset and the $1,000 instant tax deduction for workers. Together, the Albanese government's five tax cuts mean the average Australian worker will receive a combined benefit of almost $3,000 in 2028. The coalition voted against our tax cuts last year, which perplexed millions of Australian taxpayers across the country. We urge them not to make the same mistake again, because what we are proposing is responsible tax relief targeted to working people. It will benefit teachers, nurses, tradies and other Australians who earn salaries and wages.

The $250 working Australians tax offset will be available for every working Australian taxpayer for income years starting on or after 1 July 2027. It will provide a benefit for over 13 million Australian workers, including over six million women. Importantly, this is not a temporary measure. It is a permanent structural improvement to the tax system that will help Australian workers keep more of what they earn, delivering targeted cost-of-living relief.

Our instant tax deduction, which delivers on a commitment we made before last year's election, will make life simpler for millions of time-poor workers and put cash into their pockets as well. Eligible individuals will be able to claim an instant tax deduction of up to $1,000 instead of claiming individual work-related expenses, saving time and money. The Australian Tax Office estimates this measure will save Australians $380 million in compliance costs each year. Over six million people will benefit—more than half of them women—with the average worker receiving an extra $205 at tax time.

It's important to note that taxpayers will still be able to claim more than $1,000 in work related deductions if they are entitled to, and they will still be able to claim non-work-related deductions on top of the instant $1,000 deduction. This includes charitable donations, superannuation contributions, union and professional association membership fees, and income protection, sickness and accident insurance premiums.

The second key objective of this legislation is to make it easier for people to buy their own home, because, for too long, too many Australians have been locked out of the housing market. I note that the previous speaker referred to 'the politics of envy' in relation to these measures and, can I say, the desire to own your own home has nothing to do with the politics of envy. To suggest that it does, I think, is an offensive statement.

The Albanese government's $47 billion investment in housing includes expanding the five per cent deposit scheme to all first homebuyers and introducing it earlier than originally scheduled. I'm delighted to say that more than 1,800 people in my electorate of Whitlam have been able to buy their first home thanks to Labor's expansion of this scheme in October last year. We launched the Help to Buy scheme for low- and middle-income earners, with 10,000 places available each year for the next four years. We're delivering 55,000 new social and affordable homes by mid 2029 through the $10 billion Housing Australia Future Fund, our HAAF program, and the Social Housing Accelerator Program. We're extending the ban on foreign investors—investors buying existing homes—until mid 2029, helping more Australians into homes. And we're delivering the biggest back-to-back increase in Commonwealth Rent Assistance in more than 30 years, which benefits more than 9,000 people in my electorate who currently receive Commonwealth Rent Assistance.

Labor's primary focus, as we work hard to tackle the challenges associated with housing, continues to be on supply. That is why we are investing a further $2 billion in housing-enabling infrastructure to address one of the key barriers holding back more housing supply. This funding will establish a new local infrastructure fund as part of the Housing Support Program to unlock the enabling infrastructure needed to finish housing projects that otherwise wouldn't go ahead due to a lack of enabling infrastructure that includes roads, water, power and sewerage. This funding will be provided to local governments and state utility providers, with $500 million reserved for regional Australia.

As I mentioned, the Local Infrastructure Fund will support up to 65,000 additional homes over 10 years. However, supply cannot be our only focus, because our distorted tax system has resulted in property prices far outstripping wages growth, and the dream of homeownership has become increasingly out of reach, particularly for young people. One of the issues raised most often with me by people in my electorate since I became the member for Whitlam just over a year ago is the affordability of housing. This issue is not raised just by young people but also by parents and grandparents who are concerned for the future of their grandchildren and their children. There is widespread acceptance that Australia's housing market is not working. Young people on lower incomes are half as likely to own their own home than they were in the year I was born. Many young Australians are putting off having children because of housing insecurity.

We cannot accept this unfair status quo. That is why we are taking action to fix it. Our reforms to capital gains tax and negative gearing will help 75,000 more homeowners to enter the housing market over the next decade. From 1 July 2027, the 50 per cent capital gains discount will be replaced by cost based indexation for assets held for more than 12 months, with a 30 per cent minimum tax on net capital gains. These changes will apply to all CGT assets, including pre-1995 CGT assets held by individuals, trusts and partnerships. The changes will apply prospectively, with the 50 per cent discount applying to gains accruing up until 1 July 2027 and the indexation and the minimum tax used to calculate the CGT on gains accruing from 1 July 2027.

Under the changes that take effect from 1 July in 2027, investors will index the cost base of their assets in line with inflation, so they pay tax only on their real gains above inflation. The effective tax rate on capital gains will vary depending on an individual's marginal rate, their nominal returns and the inflation rate over the period the asset has been held. This means that not everyone will pay more tax under these changes. Some will pay less. It will depend on their circumstances.

A key change is that the introduction of the minimum tax reduces the benefit for taxpayers who defer capital gains realisation to years in which their marginal tax rates are low. It ensures their gains are subject to a tax rate closer to the rate that applied to them during their working life. Importantly, recipients of certain government payments, including the aged pension and JobSeeker, will be exempted from the minimum tax if they receive any of these payments in the financial year in which they realise the capital gain. In line with our goal of supporting new housing supply, investors who buy new builds will be able to choose either the 50 per cent CGT discount or indexation and the minimum tax when they sell their property. The existing CGT discount of up to 60 per cent that applies to qualifying affordable housing will also be fully retained to preserve incentives to invest in those assets. I want to stress that the four existing small business CGT concessions will remain in place, allowing eligible small businesses to reduce or remove tax on any gains when they sell.

These reforms limit negative gearing for residential property investments to new builds and key government housing priorities. From 1 July 2027, losses related to existing residential investment properties purchased after 7:30 pm on 12 May 2026 will only be deductible against other income from residential properties, including capital gains. Excess losses can be carried forward to offset residential property income in future years so investors can continue to claim a deduction in the future for costs such as maintenance. Residential properties held on the date we announced these changes will be allowed to be negatively geared in future years until they are sold. This ensures that arrangements for taxpayers who have already made investment decisions based on the existing rules for negative gearing will not change. It's important to state that new builds can continue to be negatively geared after 1 July 2027, ensuring the benefits of negative gearing are directed to investments that support growth in Australia's housing stock. Negative gearing will continue to support residential properties which genuinely add to supply, such as dwellings constructed on vacant land or where existing properties are demolished and replaced with a greater number of dwellings.

I note these changes to negative gearing will only apply to residential property. Commercial property and other asset classes, including shares, will remain subject to existing arrangements. Further exemptions to the negative gearing changes will also be available for private investors who support government housing programs, for example through the provision of affordable housing. I note that, while these two bills put in place the main provisions of our tax reforms, the government will consult on the most complex policy issues, including the application of capital gains tax changes to small and start-up businesses.

These bills will reduce the tax burden for over 13 million workers, help 75,000 Australians realise the dream of homeownership, deliver $3.5 billion in new measures that lower taxes for businesses and start-ups, and reduce compliance costs by $540 million a year. These reforms will make our tax system better, fairer and simpler and make our economy and our tax system work in the interests of more Australians. They build on the tax reforms already delivered by the Albanese Labor government, consolidating our record of responsible economic management. Our tax reforms are pro aspiration, pro worker and pro investment. They are the right reforms even though they involve difficult decisions. They take our intergenerational responsibilities seriously and don't leave those problems for the next generation to fix. For all of these reasons, I commend these bills to the House.

Nicolette Boele (Bradfield, Independent) | Link to this | Hansard source

I rise to speak on the government's proposed tax reforms, Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. I want to start by commending the government for showing grit and determination to attempt something genuinely brave. Since the last election, many of us in this chamber have called on the government to use its mandate to do something courageous and meaningful. Real reform is hard. It's politically costly, and too often governments simply avoid trying. Whatever my reservations about the details of these tax changes—and I'll get to those reservations shortly—I commend the government for attempting to address the structural inequalities that have been embedded in our tax system for a generation.

These bills go to the heart of what kind of country we want to be. Who should bear the burden of tax? What kind of wealth building do we want to encourage, and what realistic chance do young Australians have to own their own home and to get ahead? These are serious questions, and I'm glad that the government is finally trying to answer them. But let me briefly explain what is in front of us, because the public debate has not always been clear.

The bill has four main elements. The one that has received the most attention is a change to the capital gains tax discount. Currently, you receive a 50 per cent discount on capital gains tax, and that's being replaced with the discount based on inflation, so you only pay tax on real above-inflation gains. Based on historical data, for some assets, like detached housing, that's likely to reduce your discount. But, for other assets, like some apartments or shares, your discount may actually increase. It depends, of course, on how much your capital gain is due to inflation or due to real gains. There will also be a minimum tax rate of 30 per cent on real capital gains.

The second element of this bill limits negative gearing on residential property. Investors who purchase existing properties will only be able to offset their rental losses against rental income, not against their wages or other income. Investors in new builds, however, retain the full negative gearing benefit. This design is clearly intended to tilt investment toward new housing supply, and, of course, I welcome that. The third element of the bill is a tax cut of $250 for working Australians, and the fourth is a $1,000 instant tax deduction, allowing you to claim up to $1,000 in work related expenses without having to keep all of those receipts.

I want to focus today on the CGT changes and negative gearing, because they are the most consequential for restoring fairness for Australian workers and for backing business to take risks, employ Australians and contribute to productivity. I'm constantly listening to people in my community in Bradfield speak about housing. The system just isn't working. I speak to young people who grew up on the North Shore but who simply cannot see a path to owning, let alone renting, a home there. I talk to parents who are watching their adult children move further and further away. I see a generation that has done everything right and is still shut out of the market and the opportunities that were afforded to their parents.

The capital gains tax discount, combined with negative gearing on investment properties, has contributed to this broken system by distorting the housing market. For decades, these tax arrangements have encouraged investors to treat property as an asset class. Over the years, we've learnt to accept this as normal, but it's not. People in other countries find our relationship with property, quite frankly, bizarre. This drive to treat property as a financial asset has been damaging. Since the capital gains tax discount was introduced in 1999, property prices growth has dramatically outpaced wages growth. Houses have become unaffordable to just too many people, and far too much money has been redirected from productive investments to sit passively in properties.

Doing nothing about these taxes would mean that we continue to face persistent and worsening problems of housing affordability and inadequate shelter. Doing something is necessary, and some of the government's changes will indeed help. By limiting negative gearing for existing investment properties while preserving the full benefit for new builds, the reform steers capital toward where it is actually needed—new housing supply. The CGT changes, when applied to property, are defensible on similar grounds. So, in relation to housing, I want to emphasise that change is welcome, and my electorate broadly supports this.

In a survey that I conducted earlier this year, people in my electorate overwhelmingly supported reforms to capital gains tax discount for housing, even if they themselves held investment properties. People recognise that change is needed for their children and grandchildren to live prosperous lives, and I share that support. But, alongside many colleagues on the crossbench, I have a number of reservations about the design of the government's proposed changes. I have concerns about the way that the government has conducted this process. Why? Because the government is trying to sell this as a housing policy, but it has extended CGT changes to every asset class, not just real estate but also shares like ETFs, bonds, larger small businesses and startup equity. The government's stated rationale is that it doesn't want to replace one distortion with another. Consistent tax treatments across asset classes is a legitimate policy goal, and I accept that in principle. But the case for extending these changes beyond property, at this time, has not been clearly made to the Australian public, and the result has been confusion and concern and, in some cases, anger.

I've had constituents contact my office who genuinely thought that the changes were only going to be about investment properties; they were blindsided when they realised their other investments were going to be affected too. The government hasn't communicated well enough on this. I've heard from self-funded retirees who are too old to be completely funded entirely through superannuation and who were intending to sell shares as a retirement strategy. I've heard from young people who are using ETFs to save. I've heard from small-business owners with no super who are planning on selling their business to fund their retirement. And I've heard from young parents who are banking on selling some shares to get through an extended parental-leave period. These plans are now all in doubt.

That's why I came out, right after the budget, to call for the government to ring-fence the reforms to residential property and to slow down on the other changes—to consult first, consult widely, and make sure other changes do not result in unintended consequences. I still hold that view now.

Then there are the concerns being raised by business. As someone with a background in venture capital, I see how these proposed reforms threaten to place a significant tax burden on this important part of the finance sector that takes risks and backs business. A VC fund will back 20 entrepreneurs with their ideas or business models, knowing that only one will likely net them any profits in five or 10 years time. The proposed tax changes mean that government will reap rewards when profit is made, but they leave all the downside risk with VC investors.

Now let's talk start-ups, particularly those without formal VC inputs—people who take a loan from the bank or from family or from friends. The sector has a unique relationship with risk and reward. Founders spend years building their companies, and, often, forgoing wages or super, in the hope that their risk-taking will yield long-term rewards. But the financial and time investments in these high-growth assets will be punished under the new scheme. This will likely disincentivise people from engaging in the years of hard work that go into start-ups, or it will push them to take their businesses elsewhere—overseas.

I surveyed constituents about this issue as well, and three in four people who responded supported a CGT carve-out for founders. They recognised that passive property gains and active business gains are different and that the government's tax reform should reflect this. These start-ups are not just the unicorns that we hear about in the news—the companies that will end up worth over a billion dollars. Those are rare. This is also about the far-more-numerous smaller start-ups, that you don't hear about but which also do such valuable work: driving innovation, employing talented people and making our economy more productive.

I'm particularly concerned about the climate tech sector. This is one of the most important emerging parts of our economy. Helping it grow will help us tackle the climate crisis and improve energy security, and make us more prosperous in the process. We're fortunate to have such a burgeoning climate tech sector: 800 companies employing 12,000 people, with world-class researchers and entrepreneurs working on all kinds of important issues, from energy storage to clean agriculture to industrial decarbonisation. Many of these companies manufacture products right here in Australia. And over 30 of these companies are on track to reach a $1 billion valuation in the next two years.

Now, the government claims to want to see this sector thrive, but its tax changes undercut that goal. These are companies like MCi Carbon, which decarbonises cement and steel production and turns CO2 emissions into valuable products; or Allume, which is helping residents in apartment blocks to install solar and electrify—companies doing innovative, valuable decarbonising work, towards an economy that is going to prosper, and unlocking economic opportunities.

Bradfield is home to many people working in and investing in climate tech. We want to see these companies stay in Australia; we don't want to see a brain drain. The government says that they want this too, which is why they've committed to consulting on possible exemptions for start-ups—and I welcome this. But it raises an important question: why the rush? The government's asking the parliament to pass a fundamental framework for this reform, while acknowledging that significant design questions remain unresolved. Why legislate the framework before these thorny issues are settled?

Despite all of the resources that it possesses, the government has chosen to develop something behind closed doors and spring it unexpectedly on voters who are expecting to see targeted changes to property taxes. This process just doesn't cut it. We saw another example of these rushed and opaque processes in the budget, with the government's announcement of separate tax reforms on foreign investors that would disproportionately affect the renewables industry—again, problems that could have been foreseen and resolved but were not, because the government didn't engage with the industry players before setting out legislation to make changes impacting those groups of people.

I support fellow crossbench member Allegra Spender's motion last week to refer this bill to the Standing Committee on Economics for a report by the end of July. The government voted down this motion. I'm pleased to support amendments today which call on the government to limit CGT reforms to property, but the government will almost certainly vote those down too. A Senate committee is looking into these bills, but it'll only have a couple of weeks to do so. That's not enough time to properly scrutinise these reforms, nor is it enough time to build support amongst the public. Why not take the time to build genuine community understanding and support that would help ensure that any changes endure beyond this government?

I want to say again that I welcome the government's bravery, but I ask it not to rush. Consult properly and return to parliament later this year with reforms that have been properly scrutinised and designed, and take the time to explain to Australians clearly what these changes mean for their own financial lives. Take the time to consider people's views and genuinely listen. Continue to be brave, but have the humility to change the design of these reforms in order to mitigate unintended consequences.

I genuinely believe in the direction of this reform. If this bill were only about housing—if the negative gearing changes were paired with the CGT reform and ring-fenced to residential property—I would vote for it without hesitation. But that is not what is before us. What we have been presented with is a change that applies across all asset classes and is introduced ahead of consultations that the government acknowledges it still needs to conduct, and it's happening with design questions still unresolved and without the broader public having been brought along on the journey. I will, of course, hold the government to account on its ongoing consultations with the startup and small-business sector, and I will keep pushing for more information and clearer communication about the impact of these changes. I commend the government's appetite for reform, but just because a policy is courageous doesn't mean it has been well designed or that the process has been thoughtful or transparent. For those reasons, and with genuine regret given how much I support the housing elements, the tax deductions and the tax cuts of this bill, I will not be supporting this legislation today. I urge the government to take the time to get this right, because this cause is just too important to continue to get wrong.

Lisa Chesters (Bendigo, Australian Labor Party) | Link to this | Hansard source

No. 3 Melaleuca Avenue, North Bendigo—North Buderim. I'll say that again: No. 3 Melaleuca Avenue—m-e-l-a-l-e-u-c-a—North Buderim, for the benefit of Hansard. Why I know that so fluently as it rolls off my tongue is that that was my family home. That was what my parents built back when Bob Hawke was prime minister. Every home in that street was built about the same time. For $45,000, my family built a home in North Buderim, a suburb on the Sunshine Coast. When I look at photos online, it's still quite similar to what my family had. The pool is still there. It's still a three-bedroom. We turned the carport into a rumpus room for us kids because we didn't want to watch news every minute of the day, much to my father's disappointment. The garden's the same. I can remember planting the trees in the front yard and the garden that we had, with the two sheds out the back because my father was a mechanic and he liked to repair his own cars. That home today is valued at $1.2 million. My sisters and our friends at school could not afford to buy their family home. That is a property market on steroids.

In less than 35 years, our property prices are at a level we never would have imagined when we were kids. We are here today debating these reforms because the Australian dream for so many in our younger generation has been broken. At no time when we were kids, or when we finished high school or when we went to university, did we ever think that homeownership would not happen. If you worked hard and you saved, you could still live in the suburb where you grew up or another suburb.

These aren't just houses in Melaleuca Avenue, North Buderim, or any other house in North Buderim. This is the story of so many houses that were built in the late eighties and early nineties as Australia expanded. It is true of the story of homes in my electorate of Bendigo and all throughout regional Victoria and the outer metros. For example, a home on Honeysuckle Street, Bendigo, in 1982 was $6,200. That was the price back then to enter the market. In 1999, with some of the changes we're debating today, it was $79,900. Today it's valued at just under $700,000. That has been the progression of our housing market in a generation. That is why we need to step back and think about where it all went wrong.

I acknowledge that some have made a lot of money—and good on them. But to the ones who want to do what their parents did, here's a cautionary warning: it was a once off. Your family home that was $45,000 or that was $70,000 that your parents built and then sold for $1.2 million or thereabouts, if you bought that home for $1.2 million, you're not selling it for the same mark-up. That has happened in one generation. It's a once-off opportunity where people have made some money and have done quite well, but we need to talk about nation-building policy that helps everybody.

I have another example of a more recent time in Bendigo. In my time since being the federal member, this particular home on Sternberg Street in Bendigo was sold in 2013 for $285,000. That's reasonable a decade ago. Ten years later, in 2023, it sold for $1.1 million. That is a property market on steroids. How does somebody in Bendigo on an average income afford a home on an average street in a suburb in Bendigo? How does a first home buyer compete with a self-funded retiree for that home? It's a beautiful home. It's been renovated. The previous owners did a glorious job. But even they were surprised at the price tag and the windfall that they got. We're not saying that we're going to crash the prices back. That's not what we're saying at all. We're saying that we have to address the system that has enabled this to be, to create a fairer playing field for first home buyers.

These reforms before us are about helping workers, first home buyers and businesses so that more Australians can earn more, keep more of what they earn, get into the housing market and have the opportunity of the Australian dream and get ahead. We're changing it—except for the examples that I've established—to demonstrate that we need broad tax reform to make our tax system fairer. We need to look at how we can readdress the balance that income earned on investments is disproportionately seen more generously with tax concessions than the income you earn through your labour and hard work.

Currently, if you sell an asset you've owned for more than 12 months, like shares or an investment property, you pay the tax at the marginal tax rate on half of that profit. It's known as the 50 per cent capital gains tax. The discount is meant to compensate investors for inflation so that they only pay tax on real gains. Up until 1999 the indexation was applied to capital gains so that people only paid tax on their real gain, the part of the gain over and above inflation. In 1999, under Howard and Costello, the government replaced the inflation indexation with a 50 per cent discount, arguing it would be simpler to calculate. At the time, they thought that this would spur investment in shares and productive investments, but this was not true. As history now tells us, it encouraged more people to get into property. Shares declined and more people invested in property. And now we've seen the situation that we're in today. The examples that I shared are examples that all of us have.

What we're proposing is to level the playing field, to encourage and to support first home buyers. People will still have the opportunity, in regard to negative gearing, if they contribute to our property portfolio as a nation by investing in new builds. What we're proposing in this change means that, from 1 July 2027, we'll see future gains taxed adjusting for inflation—rather than a flat discount. This means that investors will only get taxed on the profits above the adjusted amount, going back to the system that existed from 1985 to 1999.

The additional 30 per cent minimum tax rate will be applied to the real capital gain. This is the same as the marginal tax rate that most Australians pay on their wages. That is the crux of this reform. Your gain—whether it be investment, property or wages that you've earned through your labour—should be taxed the same. That's what we're proposing here.

I should note—and this is a conversation that I've had with a lot of people in my electorate—that there is grandfathering involved in these changes. So if you owned a property before budget night, it won't change for you. This is about future gains and future properties. The reason why this is important to raise is that there is a lot of mis- and disinformation out there.

These aren't the only changes that are being put forward in this bill. The government's reform package before us today is also about building a better, fairer, simpler tax system by reducing the burden for income tax workers; 13 million across Australia will receive a further tax reduction. We are delivering to them the worker bonus, the working Australia tax offset, which is a new tax cut. We're delivering a $1,000 instant tax deduction, saving time and money for millions of workers when it comes to their tax time. These are ways that we are helping workers, particularly those on the lowest income, earn more and keep more of what they earn.

The proposal that's before us today is about correcting the impact of a legacy of Howard and Costello that they made in 1999. It's about restoring hope to a younger generation so that they may be able to one day own a home, to have that same opportunity that their grandparents had and that their parents may have had. We hope that they will have that.

The changes before us limit negative gearing to residential properties that are new builds. That is incredibly important for electorates like my electorate, where we do have the opportunity to build more homes in town through infill and more towns in our growing suburbs. That is why this announcement that has been made has been welcomed by the small businesses involved in construction in my electorate. They see any way to encourage people to invest in new builds as welcome. The government is grandfathering the change. So if you're already negative gearing or own an investment property, you can continue to do so. The changes are also affixed to the tax treatment on capital gains so that the system operates as it was originally intended and helps direct investment to where it is most productive. And I think that's what disappoints me the most about those opposite. Acknowledge a mistake was made. Go back to the original intent of the discount. It was about making sure that we directed investment towards investment that was the most productive. The changes that are before us are about the future. They're about encouraging investment. They're about encouraging investors to look at where we can be the most productive and grow our economy. The distortion that's happened with the coinciding of house prices increasing at a much faster rate than wages is a long story that started back in the late eighties, as I have suggested, which was super-turbocharged in 1999 to where we're at today.

I encourage those opposite to rethink their opposition to this and to join Labor in correcting the problem that was created by a previous generation of politicians. I encourage them to support the introduction of the $250 working Australian tax offset and to support our lowest income earners to receive a little bit of offset. For those who dismiss it, for someone in my electorate, that's their kid's school fees for a primary school. It could go towards swimming lessons. It knocks out one of those bills that they're struggling to pay. $250 can go a long way for a family on a small income. This will benefit 13.3 million Australians and disproportionately more women, because women earn lower incomes, and people living in regional areas who are also on low incomes. This is on top of the other tax cuts that we've already legislated. Combined, the average worker will be just under $3,000 a year better off by 2028, because of our Labor government and the changes. That $3,000 by 2028—it should be noted—has been opposed by the Liberals and Nationals every step of the way. This is real money back into the pockets of working Australians to help them pay bills. This is real cost-of-living relief to those who need it most.

These measures that are before us, as I have said, are about restoring fairness to our tax system. They're about correcting or giving opportunity to a next generation of first home buyers. These reforms are about helping workers, first home buyers and businesses so more Australians can earn more and keep more of what they earn. They can get into the housing market. They might have the opportunity to live in the neighbourhood where they grew up or a new neighbourhood that they now call home, but it's about giving hope to the next generation and recognising that the income that they earn as a worker is taxed and valued the same as income that their landlord or the investor earns.

Andrew Wallace (Fisher, Liberal National Party) | Link to this | Hansard source

Before coming into this place, I made my living out of being a builder and a construction lawyer, so essentially I was involved in the building industry for 35-odd years before I came in here. I like to think I know a little bit about the building industry and how it operates. This bill, this budget, is going to be an absolute disaster for the Australian economy. It's going to be an absolute disaster for mums and dads. Over the weekend, I went home, and I had the Maleny Agricultural Show on Friday and Saturday. It was a beautiful couple of days, and I had so many people coming up to me and talking to me about how this budget was going to impact upon them personally. There was not one person spoke to me favourably about this budget, and there's a good reason for that. When we look at some of the changes that this bill seeks to introduce—I'll touch on the first one: negative gearing.

We've read this book before, and we know how it ends. In the 1980s, Paul Keating got rid of negative gearing. What happened to rental prices in Melbourne and Sydney? They absolutely skyrocketed. That so-called reform did not last two years before he had to capitulate on that. No-one, not one person on the other side—not even the Cabinet Secretary, with all of his brilliance as an economist—has been able to demonstrate to anyone in this country why what we will get today will be any different to what happened in the 1980s. They say that to keep doing what you've always been doing and expecting a different result is the definition of insanity. I think Einstein said that. But the reality is that we know how this is going to end. It's going to end in tears.

And, if rents go up, what is the one challenge that so many young people talk to us about when it comes to them buying a house? It's saving a deposit. It's a lot harder to save for your deposit if you're shelling out more money in rent. I've seen some suggestions from different economists that say that these changes will increase rents in Sydney by $160 a week and in Melbourne by $130 a week. They're talking about potentially up to 20 per cent increases in residential rents. When young people are finding it increasingly difficult to save for a deposit, I don't know how these changes are going to make it any easier for them to get into a house. This government has consistently said since the budget that this is all about 'intergenerational fairness'. Well, this has nothing to do with intergenerational fairness. This is a cash grab. The reality is that this government has run out of their money and now they are coming after everyday Australians for more of their money. This is the biggest attempt to redistribute wealth in this country that certainly I have seen in my very short lifetime.

Australians are angry, and they should be angry, because they weren't expecting this. They were told repeatedly by this prime minister and his frontbench that there were going to be no changes to housing tax, no changes to superannuation and no changes to trusts. They breached that when they tried to bring in their tax on unrealised capital gains on superannuation funds, and eventually the Treasurer backed down, because I think he was the only person in the world who thought it was a good idea. But then they continued. The Prime Minister and the Treasurer continued. Even before the 2022 election, they went to the election saying there'll be no changes—no changes to CGT, no changes to negative gearing, no changes to trusts and no changes to superannuation. They said that again in the lead-up to the 2025 election, repeatedly. The Prime Minister castigated a journalist in a presser at one stage saying: 'How many times have I got to say this—50 times? There'll be no changes.' And yet here we are, less than 12 months after the 2025 election, when they've won a thumping majority—an absolute thumping majority—by giving those representations.

The member for Fadden is a colleague of mine as a lawyer. We would call those misrepresentations—actionable misrepresentations. It's a fair enough position for the everyday Australian to rely upon a representation made by the government of the day that they will not change something. When the Prime Minister stands up, particularly when he says things like, 'My word is my bond. I'm not going to make these changes'—

Cameron Caldwell (Fadden, Liberal National Party, Shadow Assistant Minister for Housing) | Link to this | Hansard source

A fraudulent misrepresentation.

Andrew Wallace (Fisher, Liberal National Party) | Link to this | Hansard source

Well, certainly a misrepresentation.

I took some time to look at alternative ways we could describe the changed position of the government on these tax policies. I'll run through them. You could be excused for using words like 'falsehood'. They were untruths. They were—I think this is generous—inaccuracies. It was a misrepresentation, a fabrication, a distortion, misinformation, an incorrect statement, a misstatement, deception, a misleading statement, a departure from the truth, not accurate, not correct, at odds with the facts, inconsistent with the truth, lacking accuracy, a contestable claim, a questionable assertion, a dishonest claim, a false assertion, a plainly untrue statement, a patent falsehood, a gross mischaracterisation, intentional distortion, reckless disregard for the truth, egregious inaccuracy and an extraordinary misstatement. It just doesn't stack up. It doesn't hold water. It's not supported by the facts. It's simply not true, demonstrably false, clearly inaccurate, factually wrong, widely contradicted, easily disproven, an unsustainable claim, a broken promise, a reversal of position, a contradiction of previous statements, a backflip, a complete departure from earlier commitments, a rewriting of history, a convenient reinterpretation and a failure to be upfront. Most importantly, it's a breach of trust.

Australians have a right to believe it when their Prime Minister stands up and says, 'I am not going to do X, Y and Z; I am not going to change the laws in relation to capital gains tax, negative gearing, the taxation of trusts or superannuation.' Australians have a reasonable expectation that those promises will be kept, and they were not. The Australians I spoke to at the Maleny Show are not just disappointed in this government; they are palpably ropeable. No-one voted for these toxic taxes. Bill Shorten at least had the courage to take these policies to a general election. This government, despite having made those representations that it would not make these changes, has done exactly that. I think Australians have every right to feel deceived.

The bill itself in schedule 1 introduces changes to the capital gains tax regime. Schedule 2 introduces changes to the negative gearing regime. Schedule 3 introduces the working Australians tax offset. Schedule 4 introduces the $1,000 standard deduction for work related expenses. The coalition opposes schedules 1 and 2, and we will fight these steps every single step of the way. If this government had any sincerity, ethics or moral clarity whatsoever, it would split schedules 1 and 2 from schedules 3 and 4.

We would like to support schedules 3 and 4. We in the coalition believe in lower taxes. We don't believe in the government's $77 billion worth of additional taxes. The government and the Prime Minister crow about this working Australian tax offset that will provide $250 a year. But, in the same breath, they are taxing Australians $77 billion, and they're doing it under the guise, as I said, of so-called intergenerational fairness. But the Treasury's own documents reveal that these policies, if they become law, will result in 35,000 fewer homes over the next 10 years.

There's not one sector of the general community that benefits out of this budget. The older members of my community are up in arms because hidden in the bowels of the budget documents is this egregious provision which will rip away the concession for private health insurance holders once they turn 65. Now, Deputy Speaker Freelander, I'm not going to suggest that you're anywhere near that age group—

Mike Freelander (Macarthur, Australian Labor Party) | Link to this | Hansard source

How kind of you!

Andrew Wallace (Fisher, Liberal National Party) | Link to this | Hansard source

but you and I both know that we were told when we were youngsters, 'Invest in private health insurance and look after yourself. The benefits will flow if you get sick. You get your choice of doctor. You can go to a private hospital. You don't have to go on a waiting list. You don't have to wait for years to get a knee replacement or a hip replacement.' I'm not wishing that on you, Deputy Speaker. But that's what we were promised. We were promised that those concessions for private health insurance would last into our later years, when we need it the most—and I'm getting there.

A lot of my constituents in Fisher—it's an old electorate—are getting there or they're already there, and they feel ripped off. A couple on gold private health insurance will be paying up to $1,600 a year extra in their premiums because of the decision by this government to rip away those concessions. Shame on this government. These are people at their most vulnerable, our aged—when they need private health insurance the most. These people have been paying premiums for decades, and now this government says, 'We're not going to worry about that anymore. We're just going to change that. If you can't come up with the money, you go onto the public health system.' Well, that'll work well for the states, won't it? That'll work well. It'll blow out waiting times.

People in Australia are very angry with this government, and they have every right to be.

Kara Cook (Bonner, Australian Labor Party) | Link to this | Hansard source

I rise to speak on the Treasury and income tax bills. At the heart of these bills is fairness. It's about recognising that, while Australia has changed, too many parts of our tax system have not changed with it. It represents the first stage of the most significant package of tax reforms Australia has seen in a generation. These bills are making sure aspiration and opportunity are not reserved for a fortunate few but remain within reach for every Australian prepared to work hard and build a future.

These bills have three clear objectives: to deliver more tax relief for Australian workers, to make it easier for people to buy their first home and to better balance the way our tax system treats income earnt through work and income earnt through assets. It does this through four key reforms. There's a new $250 working Australians tax offset for more than 13 million Australians, and a $1,000 instant tax deduction to make tax time simpler and put more money back in workers' pockets because Labor wants you to earn more and keep more of what you earn. It also reforms future negative-gearing arrangements so they better support new housing supply from 1 July 2027, and it makes changes to capital gains tax that restore its original purpose, ensuring that Australians are taxed only on real gains rather than on both the real and inflation driven gains.

One of the clearest messages I hear in Bonner is that people want a system that rewards effort. People understand that success should be encouraged but also understand that fairness matters. They understand that, if working Australians feel like the system is stacked against them, confidence in the future begins to erode. That is why these bills deliver practical tax relief for workers, including the new working Australians tax offset of up to $250 each year for more than 13 million Australians. This includes many people working across Bonner, where there are more than 80,000 people employed. This is permanent tax relief directed at working people. It's not temporary support or a one-off payment. It's permanent relief. It will make a real difference to working Australians, including the nurse in Carindale working long shifts, the teacher in Tingalpa, the tradie in Murarrie travelling between jobs, the truck driver in Hemmant keeping goods moving and finally, down to the southern end of my electorate, the office worker in Mount Gravatt who might be trying to balance the rising costs of a mortgage or rent.

People who work hard deserve to earn more and keep more of what they earn. This government believes that, when it is responsible to do so, we should reduce the tax burden on working Australians. We have already delivered tax cuts to every Australian taxpayer by lowering rates and lifting thresholds, and the relief does not stop there. Another round of tax cuts will begin on 1 July, with further reductions commencing again the following year. Combined with the measures in these bills, the average Australian worker stands to receive up to $2,816 in tax relief by 2028. That is meaningful support.

These bills also introduce a $1,000 instant tax deduction for the 2026-27 income year. Tax law is not always exciting, but I think most Australians can agree that making tax time simpler is a good thing. Millions of Australians are currently keeping receipts, logging expenses and navigating complicated claims for relatively small deductions. Under these reforms, eligible workers will be able to claim a standard deduction instantly. It will be simple and straightforward, involve less paperwork and less complexity and, importantly, put money back in their pockets. For the average worker, that means hundreds of extra dollars at tax time. More than a quarter of those who benefit will be under the age of 30, and more than half of them will be women. For many people, that might mean helping cover school costs, paying a bill, buying groceries or simply taking some pressure off. For those with more than $1,000 in work related expenses, they can still claim those as they usually would. That includes things like charitable deductions, superannuation contributions and union and professional association fees. This reform is practical and reduces red tape.

These bills are also about one of the biggest challenges facing Australians today: housing affordability. Too many people feel locked out. Too many young Australians feel like homeownership has become something to aspire to rather than something realistically achievable. Too many families are worried about whether or not their children will have the same opportunities that they did. Labor does not simply accept that as the reality. Housing is not an abstract economic debate. It is fundamental and should not become a privilege reserved only for those already ahead.

There was a time when homeownership was simply what happened if you worked hard and saved. It was within reach, and it was expected, and governments at every level understood their role in keeping it that way by building homes, investing in communities and making sure that supply kept up with demand. Over the course of decades, governments retreated from building. At the same time, the rules around private construction became so layered and complex that getting a home built became an achievement in itself. Approvals slowed, land releases stalled, and the construction industry fell behind. The result was a system that made it harder and harder to build the homes Australians needed.

Then, in 1999, the Howard government introduced the capital gains tax discount, a decision that compounded every one of those supply failures. It was designed to drive investment into the share market. Instead, it made established residential property the most attractive, low-risk investment in the country, and investors flooded in. Today, more than 80 per cent of investor lending flows into existing homes rather than new construction. A generation ago, buying a home cost around three times what the average Australian earned in a year. Today, that ratio is more like eight times. That is the situation that Labor inherited, and that is what these bills begin to fix.

Under these bills, future negative gearing arrangements will focus on new builds. And I want to be really clear about what that means. Existing arrangements remain in place for current property owners. People who have made decisions under the current rules are protected. There is no retrospective change. But, for future investment, incentives will be targeted towards increasing housing supply because, if negative gearing is going to be supported through the tax system, it should support the building of more homes. It should help increase supply. It should help Australians compete for more housing, not simply compete harder against one another for the same housing stock. If we are serious about affordability, we have to be serious about building more homes.

While this government is focused on fixing the problem, the opposition have made a different choice. They have said that they will fight these reforms. They have been clear: if they win the next election, they will reverse them. Those opposite are not just opposing the solution; they are promising to recreate the problem. They would take taxpayer dollars and use them to subsidise property investors over first home buyers. They would wind back the five per cent deposit program, saying to the 515 people in my community of Bonner that they don't get to own their own home. They would scrap Help to Buy. They would slash social and affordable housing programs. They even want to scrap housing targets and the reform that sits underneath them. That is not an alternative; it is a step backwards, just like their appointment of Tony Abbott as president of the Liberal Party last week. They are not just determined to send their own party backwards; they want to send all of Australia backwards.

Despite what some headlines might suggest, many people in Bonner are telling me that they support reforms aimed at making the system fairer and helping young Australians get ahead. I heard from Lee in Carindale, who wrote to me saying:

Thanks for your action on housing in the recent Budget! Well done! Younger people I'm sure will be most appreciative.

Tony, another local resident, said:

Stick to your guns. This budget has taken the right path …

I think those comments reflect something important. People in my community understand that young Australians deserve a fair chance. They understand that, if we want the next generation to thrive, we cannot simply continue with settings that leave too many behind. They understand that reform is not always easy, but sometimes it is absolutely necessary.

These bills also reform capital gains tax by returning it closer to its original intent. Again, I want to speak plainly about what this means. There has been a lot of misinformation, and Australians deserve facts. Firstly, we are not introducing a tax on inheritances or inherited assets. That claim is simply false. Secondly, this reform ensures Australians are taxed on the real gains they make, not inflation driven growth. Under the reforms, the base cost of assets will be indexed. In simple terms, tax will better reflect actual profit. That is a sensible principle, and it is a fair principle. Importantly, many Australians may pay the same amount of tax or, in some cases, even less depending on circumstances such as inflation, rates of return and how long assets have been held.

These reforms also protect important concessions for small business, including capital gains tax concessions. In Bonner, we have more than 5,000 small businesses in our community, employing locals and supporting our local economy. These local businesses will benefit from the practical support this budget delivers, including $3.5 billion in new business tax relief and making the $20,000 instant asset write-off permanent. We are also making the two-year loss carry back permanent, supporting startups, delivering tax relief for sole traders and reducing red tape through a new 'tell us once' approach. Importantly, we are cutting regulatory costs across the economy by $10.2 billion and removing 497 nuisance tariffs to reduce compliance costs for business.

This morning the Fair Work Commission handed down its annual wage ruling, and it is good news for working Australians. From 1 July, the minimum wage rises by 5.97 per cent, to $26.44 an hour, and award rates rise by 4.75 per cent. Nearly three million Australians will see that reflected in their pay packet.

Who are those three million Australians? They are disproportionately women. More than half are casual employees. More than a third are low paid. They work in aged care, in child care, in retail, in hospitality. In Bonner, we have more than 1,200 people working in aged care and over a thousand working in the childcare sector. This will be a pay rise for them. These are the people who show up, who work hard and who keep this country running. For too long, their wages have not kept pace with the cost of living.

This government went to the Fair Work Commission and argued for an above-inflation pay rise for the lowest paid workers in this country, something that those opposite have never done. That is what we do as the Labor Party: we fight for those who need it most. And that runs through everything we are doing—a fairer tax system, more pathways into homeownership and wages that actually reflect the contribution working Australians make every single day.

This is the government that we are—a government that cuts taxes for workers, that makes tax time simpler, that fights for first home buyers, that invests in new homes and that goes to the Fair Work Commission and argues for the lowest paid workers to get a fair go. That is not about punishing success. It's not about politics. It's about something more important than that: it's about our core values and it's about making sure that in Australia, if you work hard, if you save and if you contribute, we want you to earn more and keep more of what you earn.

Julian Leeser (Berowra, Liberal Party, Shadow Minister for Indigenous Australians) | Link to this | Hansard source

The people of Berowra are disappointed, deceived and angry about this government's unfair and dishonest tax policy. Let me state the central fact plainly. Labor took these taxes to the 2019 election and was defeated on them. Bill Shorten, the then Labor leader, was so confident of his success in that election he told Arnold Schwarzenegger he was going to be the next prime minister. But then people got a hold of this tax policy, and they saw what a dog of a policy it is. The present prime minister promised repeatedly on the record he would not introduce these taxes. When asked directly, he said:

Yes, how hard is it, for the 50th time?

More than 50 times he made the promise, and then he turned around and broke every single one of those commitments.

When John Howard changed a major tax policy, he took it to the people first. This prime minister is too scared to do that because he knows he would get the same answer that Labor got in 2019. Instead, he misled the Australian people and is now governing through the deception as if it never happened. The crime is never the problem; it's always the cover up.

The Australian people aren't fooled. There's a Billy Joel lyric that captures the mood—and, unlike my friend the shadow Treasurer, I'm not going to sing! He says: 'But I don't want some pretty face to tell me pretty lies. Honesty is such a lonely word and mostly what I need from you.' And that's the message the people of Berowra have for a prime minister who has deliberately deceived them.

The coalition opposes schedules 1 and 2, the CGT and negative gearing changes, and will fight these toxic taxes tooth and nail. And a coalition government will repeal them. This is the highest taxing government in Australia's history: $50 billion in higher taxes, $273 billion Australians didn't vote for. Debt is heading to $1.25 trillion. Today's debt is tomorrow's taxes, and the next generation is being handed the bill.

Strip away the rhetoric and what we have is a death tax, a tax on family savings, a tax on renters, a tax on first home buyers, a tax on small businesses and a tax on entrepreneurs—the engine room of the Australian economy. Labor can't manage money and they're coming after yours.

In the weeks since budget night I've listened to people who trusted this government to get the basics right: to ease the cost of living; to support those who plan carefully for the long term; and to provide incentives to take risks, to employ people and to get ahead. Their hopes have been dashed. What I heard from the detailed survey of nearly 2,000 in my community should trouble every member in this parliament. The government's own budget papers admit that their tax changes will result in 35,000 fewer homes being built over the next decade. That isn't our number; it's their number. When you tax something, you get less of it. That's not ideology; it's economics 101. The more you tax housing investment the less housing you get, and this government has decided that's the price young Australians should pay.

On rents, the government's own budget papers admit that its tax changes will increase rents. An independent economist suggests that rents could rise significantly in our major cities. Shane from Cherrybrook put it clearly. He said that, for younger Australians trying to buy their first home, non-property investment was one of the few remaining paths to building deposit wealth, but these tax changes have closed the door.

Phoebe is a public schoolteacher. She's not wealthy. She doesn't travel overseas for holidays. She's someone who made careful investment decisions under the existing rules. She wrote to me with a concern not for herself but for the next generation. She said that the two strategies so many people who want to save for a house are using—rent-vesting and shares—are no now so highly taxed they're barely worth pursuing. Phoebe made a further point that every housing economist already knows but that this government refuses to act on: We need more supply. We need more apartments genuinely designed for families, not studios and one-bedders. That's the path forward, not demand-side tinkering that inflates prices for the very buyers it claims to help.

Nicole, from Dural, asked a question, and I can't improve on it: how does penalising mum-and-dad investors who own one or two properties help younger people get into the market? And she raised the other side of the equation: fewer investment properties means fewer places for people to rent. This government can't simultaneously claim to be helping renters and have punishing policies that shrink the pool of rental housing available to them.'

Our community survey confirmed that this concern is broadly shared. Sixty-five per cent of respondents believe that Labor's proposed changes to capital gains tax and negative gearing will make it harder for Australians to invest, save and build for the future. FSC data confirms that aggressive investors, typically younger Australians aged around 35, will be hit hardest by the CGT changes. Young Australians with the most ambition have the biggest target on their backs.

Small business insolvencies are running at eight closures every business hour. The Treasurer is surveying the damage his own policies are causing and declaring victory. The government is coming for small business with a 47 per cent stake claim. They've done none of the work, taken none of the risk, but they want nearly half of the business. The Prime Minister is that person in every group assignment who never shows up but expects the same grade at the end. Small business isn't just the backbone of the economy. For many owners, it's their retirement savings, their family legacy and the first job for the kids in the community. The government isn't just taxing business; it's taxing a life's work.

Alan from Galston, with 36 years of lived experience, captured this. He and his wife started their business with one assumption: that they could one day sell it and retire. That's not greed; that's planning. This budget has shifted the ground beneath them at precisely the moment they were preparing to step off it. Robert from Pennant Hills puts it plainly: 'This budget is political spin. It adds complexity, does nothing for productivity and, above all, removes certainty, the lifeblood of business confidence. When a government sacrifices certainty for political positioning, it isn't managing the economy, it's gambling with it.'

The Albanese government has buried a 30 per cent death tax in these papers, deliberately hidden, hoping no-one would find it. The Prime Minister was asked questions directly in question time to rule out a death tax, and he wouldn't. We now know why. He couldn't rule it out because he'd already announced one. This is a government that told untruths more than 50 times before the election about not introducing new taxes on homes, on rentals, on investments and on family savings and then tried to sneak a death tax through on top of it all. The deception is breathtaking.

This government has tried to frame its trust tax as a technical question. It's not. It's a question of principle. It's a question of whether this government can be trusted to honour the assurances it gives to Australian families who are trying to do the right thing. Our survey put the question directly: do you support or oppose Labor's proposed minimum 30 per cent tax rate on discretionary trusts? Opposition won by a significant margin: 67 per cent. And when asked whether these proposed changes amount to a death tax by stealth, 65 per cent agreed. These are not the responses of tax avoiders; they're the responses of families who structured their affairs carefully, in good faith and under the rules as they existed.

I recently met with a family from my electorate who run a well-established local business. After our meeting, they followed up in writing. I want to bring their words into this chamber. They'd gone to their accountant, following the government's proposed changes. His advice was measured. Their current structure is as well-positioned as it can be, but distributing funds from these structures is now materially less tax-effective than it was. For a family business like theirs, that affects decisions around reinvestment, around remuneration and around the generational transition of the business that is actively, right now, underway. Think about what that means in practice: a family that has spent decades building something is now trying to pass it to the next generation, and, at precisely the moment that that transition is happening, the government is changing the rules.

Judy from North Epping said that these changes will negatively affect Australians who've worked hard all their lives to provide for their families and themselves in retirement—people who find the retirement they'd planned now made much harder by a government that has moved the goalposts. Nicole from Dural put a human face on what these structures actually are. She and her husband bought a property through their trust, so that their child—who has a disability and can never earn enough to keep up with the rent or mortgage—would have somewhere to live when they're gone. That's not a tax lurk; that's a parent's love, translated into a legal structure. And this government's changes effectively impose what Nicole rightly calls a death tax on that arrangement. I ask every government member to sit with that for a moment. Tony from Cherrybrook is equally clear: these changes are a breach of promise and will drive investment offshore. These families are not asking for a special exemption; they're asking to be heard. And I make that commitment every day—that I will hear them, I will stand up for them and I will take their concerns to this parliament.

Nearly 2,000 residents, as I say, took time to complete the survey—a number that speaks about how much is truly at stake. The response has cut across all age groups, property owners and renters, business owners and employees. Of the 18 per cent who identified as small-business owners, almost all expressed serious concerns. Of the 66 per cent who own shares, the vast majority believe that their investments will be materially worse off. Of the 37 per cent who own investment properties, the message was the same. I should say again: Berowra is the electorate with the third-highest number of people in the country that have taken advantage of the negative gearing arrangements, in order for people to build wealth.

Our survey identified the groups most affected by these changes: family trusts, with 61 per cent of respondents; small businesses, at 51 per cent; property investors, at 60 per cent; retirees, at 44 per cent; and even young investors, at 42 per cent. These people are the backbone of communities like Berowra's.

But what stayed with me was not the statistics. It was the loss of confidence that hard work would be rewarded, that rules wouldn't change without warning and that government was competent at the basics. As one small-business owner wrote: 'I don't expect the government to solve all my problems. I just want them to stop making new ones.' A nurse who owns a home in Berowra Heights wrote to me: 'I did everything right. I worked hard, I saved, I bought a house. Now I feel like I'm going backwards.' And she isn't wrong. Frank from Normanhurst said it plainly. He said: 'This government is not just damaging household finances. It's damaging morale.' And that's why this set of tax laws that are before the parliament need to be opposed.

The people of Berowra deserve so much better. They deserve a government that understands that a discretionary trust is not a tax lurk; it's a legitimate structure for families like Nicole's to secure a child's future. It's a legitimate structure for Alan, who built a business over 36 years, on the promise he could retire from it; and for Judy from North Epping, who worked hard all her life, only to find the rules changed at the final hour. That's a betrayal of trust, and I won't let it go untested.

These people deserve a genuine housing plan—not tax changes that close investment pathways that first home buyers were using; not tax changes that drive up rents and deliver 35,000 fewer homes, by the government's own reckoning. They deserve a government that backs small business—one that understands, as Alan from Galston does, that building a business over decades and selling it to retire isn't greed; it's actually the Australian dream. They deserve the certainty that Robert from Pennant Hills identifies as the lifeblood of confidence. And they deserve a government that understands what Frank from Normanhurst, what Judy from North Epping, what Robert from Pennant Hills and what nearly 2,000 residents of my electorate took time to say: that confidence matters—that, when government keeps breaking the compact with the people who plan, who save and who build, the damage goes well beyond the hip pocket. It goes to the heart of what this country is supposed to be.

This is a series of bad-faith measures. They are an assault on aspiration. They pull up the ladder of opportunity from young Australians before they get the first foot on the rung. This isn't intergenerational fairness; it's intergenerational fraud.