Scott Buchholz (Wright, Liberal Party) | Link to this | Hansard source

What an absolute debacle. We just saw the Manager of Opposition Business come into this place and move a motion that compelled every senior minister, every member of Labor on the other side of the chamber, to speak to this bill—so that they owned it—and he was gagged. He was voted down. He was told that is not going to happen under a Labor government. I find that procedure in the House absolutely appalling. Nevertheless, I acknowledge and compliment the Manager of Opposition Business for the work that he has done.

I want to associate myself with this bill with my colleagues from the LNP—the Liberal-National Party—who have made contributions, and I want to be really clear, for the people of Australia, on what our position is when it comes to this bill. This bill has four schedules. The first schedule introduces changes to the capital gains tax regime. Schedule 2 introduces changes to the negative gearing regime. Schedule 3 introduces a working Australian tax offset. Schedule 4 introduces a $1,000 standard deduction for work related expenses. The coalition oppose schedules 1 and 2, and we support schedule 3 and 4. The reason I'm coming in and I'm making sure that this is on the record—and I'm looking straight down the camera when I make these pledges—is that we will support schedules 3 and 4, the schedules that reward hardworking Australians. But what we cannot do is support the changes that were articulated to negative gearing and the capital gains regime.

They were not road tested with the Australian public. The way our system works, the way democracy works, is that you go to the Australian public at an election and you campaign on the issues that you believe in. You campaign to convince the Australian public that you have the greater policy platform. I share with those in the chamber that that courtesy was not extended to the Australian public on these measures. Previous Labor governments, such as under previous leader Bill Shorten, did that. They took these measures to the Australian public, and the Australian public overwhelmingly said, 'We do not support those measures,' and as a result his leadership finished. So the Australian public is right to be suspicious. The Australian public is right to be cautious about a leader who says, for the 50th time, 'We're not going to touch capital gains,' and then the government delivers a budget that does exactly that. That is deceitful. That is taking the Australian public for mugs.

My job here today as a member of the opposition is to get it on the record that we will support parts of this. The way we will support that is that, when it comes to voting on this bill, the Manager of Opposition Business will walk in and he will ask for the bill to be separated so we can vote with the government on schedules 3 and 4. But do you think they will support us? Do you think they will let us split the bill? That doesn't suit their clandestine ruse. They will not support that. The reason we want to split the bill is so that we can show our support to the Australian public and take these principles to an election.

I'm really concerned about the number of government members who have come in and spoken to their talking points but have mentioned nothing—I have heard zero—in the way of an apology to the Australian public for betraying their confidence—for saying one thing before an election and doing completely the opposite afterwards. We will hold this appalling government to account. Labor says that this is good policy. If they believe that it is good policy, that's great. That is within their right. That is within their purview. If it is so good, test it with the Australian public. Let them be the deciders of that. MPs gave lectures on ambition during this debate. None spoke of honesty. None spoke of transparency. None spoke of integrity.

I have heard the Treasurer and the Prime Minister during this debate and prior to it speak on these issues and acknowledge that there will be collateral damage. They know there will be political collateral damage as a result of what they are doing—the way they are handling this. I ponder what collateral damage looks like. What does political collateral damage look like? Is it the new members on that other side and those members on low margins that the Prime Minister and the Treasurer are prepared, as collateral damage, to cluster up and lose because of the strong majority that the government has? Is the sense of hubris and arrogance now so awful on the other side of this parliament—it's shameful—that they are now openly talking about political collateral damage? I fear for our country.

It's not my intention to hold the House up. I didn't want to speak other than get on the record the coalition's support for schedule 3 and 4. What I will be doing is making sure that Australians in my electorate get extracts of our support for those schedules. Then I will cut, when we bring to the House for the bills to be separated, that those on the other side may or may not support it. My instinct is that they will not support the measures to separate the bills, but I would counsel those who, on the other side, are potentially political collateral damage that, if they want to save themselves, when we bring the motion to the House to separate the bill, they should consider supporting us and consider walking across the chamber and saying, 'If they're going to support parts of the bill that we like'—guess what? This has all being broadcasted. You're not going to be able to walk back on this. This coalition will keep hammering today the fact that you did not road test this with the Australian public and that you did not seek a mandate on these issues. In fact, it was quite the opposite. The government, the Treasurer, said, 'We're going to touch tax laws, we're not going to touch capital gains, and we're not going to touch negative gearing,' 50 times. 'How many times do I have to tell you?' were the words of the Prime Minister.

Every day between now and the next election, I will continue to remind the Australian public of the deceit of those on the other side and watch with anticipation how many frontbenchers, how many Labor ministers, refuse to come into this chamber and defend what is possibly one of Labor's most appalling policy positions. Watch how many of them refuse to put their name to this bill. I can already see the speaking list of those waiting to come into this chamber and speak. The speaking list on our side runs off the page. For government members, there are only a couple left. That was what the motion, moved by the Manager of Opposition Business, we just dealt with before was about,. It compelled government members to come in and put their name to this disgraceful piece of legislation. I will keep the fire on you because the people of my electorate of Wright, the great people of Queensland, deserve a better government than what they've got at the moment.

Clare O'Neil (Hotham, Australian Labor Party, Minister for Housing) | Link to this | Hansard source

I'm really grateful for the chance to contribute to this debate, and I acknowledge other members who have had their say in the parliament. I'm really proud today to speak in support of the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. This package of bills represents four of the key measures in the recent federal budget. The first is the working Australians tax offset, providing a new tax cut for every single one of Australia's 13 million workers. There are an instant tax deduction of $1,000, reforms to capital gains tax and reforms to limit negative gearing to new builds.

There is a lot about this bill that is technical in the operations of the tax system, and I don't want to focus my comments on that today. I actually want to talk to you, Speaker, about the deep meaning of what the parliament is debating at the moment. So much of the language that we use to talk about public policy in this chamber has this dryness and this sense of avoidance of any kind of emotion or meaning. As housing minister, I get to see what happens when housing goes wrong in our country. I get to see the pain, the distress, the discomfort and the incredible damage that this can do to the lives of people who are wound up in everything that is going wrong in our broken housing system. But I also get to see what happens when housing goes right—the transformative effect that stable housing has on Australian families, allowing them for the first time to be stable, to set down roots, to build a life in a new community and to know that no-one can move them on from something that is theirs. That deep meaning is why Australians, for almost our entire existence since the postwar period, have fought and aspired to homeownership.

But, whatever you may see about what's going on in our country today and whatever different views there may be around this chamber on what to do, we should all be able to agree on one thing, and that is that our country has a broken housing market. We have got homeownership rates falling through the floor for Australia's young people. Of course, this is not just about Australia's young people. We see more and more older Australians who are heading into retirement with a significant mortgage. All of us, if we're being really honest, can see in the parks and the streets of our own suburbs an increasing number of Australians who do not have a roof over their heads. Finally, we have a Commonwealth government that is standing up and saying that we are going to do something about this.

We're having our usual argy-bargy as we have in politics in the chamber, but outside the chamber Australians are having a very similar conversation across households in their lounge rooms and at their kitchen tables. They're talking about whether they will ever be able to buy a home of their own. They're sitting around a table and saying, 'How can we map our way out of this existence?' They're stuck in rental queues, paying too much of their income in rents and bouncing from short-term rental to short-term rental, all the while likely paying off someone else's mortgage rather than their own. We want to change the opportunity for Australians like that.

I want to tell you about Mika and Matt, who are a couple that I met pretty recently with the Prime Minister. We visited their home in Canberra, and they just recently bought into the market under the five per cent deposit scheme. We saw the transformative effect of having homeownership for this family. They are setting up a life together, a productive, beautiful life in our great country. They told me about the first night that they stayed in their new home. They had an experience that I want every Australian to experience. They sat on the floor in a home without chairs, and they ate pizza out of the box with their friends. What a beautiful moment for that family, and our government was so proud to have been part of making it happen for them. But we're not seeing enough Mikas and Matts, and I want to see more of them. Increasingly, Australians are seeing that future slipping out of their reach. For decades, homeownership rates have been falling but falling particularly quickly for those young people whom I am so concerned about.

The tax system is not the whole story when it comes to what's going on in housing, but it's certainly pretty relevant. If we look at what has happened to our housing market since the tax changes were made by John Howard and Peter Costello all the way back in 1999, house prices and incomes decoupled. We saw this huge growth start to emerge in our housing market, yet wages were not able to keep up. That was partly the effect of the tax changes that we are unwinding and revising today. If you've got any doubt about what's going on in housing today, I want you to remember this. We are at a point in our country today where the average time that it would take to save a 20 per cent deposit in your home city of Sydney, Deputy Speaker Freelander, is now up to 17 years. We cannot let this go on without intervention, and that is why our government is standing up and making this change.

No-one is suggesting that what's going on in housing happened in the last five years or indeed the last 10 years. This is a long-running, chronic problem for our country which has been building since, effectively, I was born. For too long, governments around our country have failed to ensure that enough homes get built. We've seen planning systems around the nation get more restrictive. We've seen infrastructure fail to keep pace. And, alongside all of those failures, we've seen a government that decided to tilt the housing market away from first home buyers and towards investors. Over time, Australia has allowed this tax system, which encouraged huge additional amounts of investments to flow straight into existing housing stock, to continue. When we look at where investors are investing in housing in Australia today, more than 80 per cent of their investments are in homes that have already been built. Explain to me the public policy reason for the tax system to support such a thing.

Of course, the results have been pretty predictable: more pressure on prices and fewer people being able to buy their first homes on a Saturday morning all around Australia. That's exactly why this bill is levelling the playing field for first home buyers in relation to investors. At a time when housing affordability around our country is under such tremendous pressure, we just can't sustain a system that actively tilts things away from first home buyers who desperately need our help.

The reforms in this budget will make our tax system better, fairer and simpler and deliver an Australian tax system that takes our intergenerational responsibilities seriously. By replacing the 50 per cent discount on capital gains tax with a cost base indexation system and by limiting future negative gearing to new homes, we're going to get an additional 75,000 Australian households out of the rental queue and into the property market. The reforms have been really carefully designed. Existing arrangements for current property investors will remain in place. If Australians out there want to invest in housing, they'll still be able to access these tax concessions, but we're changing the incentives. If you want to be a property investor, our government will back you in, but we want you to do something important for our country: build a new home. We want more Australians to own the home they live in, we want more homes built and we want first home buyers to have a fairer opportunity to compete.

These reforms of course form a part of what is easily the most ambitious Australian government agenda on housing that we've had for 70 years—the $47 billion Homes for Australia plan that is building more homes, making it better to rent and backing in first home buyers, just as an Australian government should. Part of this plan is our five per cent deposit program. In this budget we are not only levelling the playing field between investors and first home buyers; for the first time, we, the Australian government, are standing behind the first home buyer, backing them in and helping them into the market in exactly the way that we should.

We've seen new builds in Australia—new commencements—up 26 per cent on where they were last year, and you've heard me talk about those 55,000 desperately needed social and affordable homes. It's the most important thing the Commonwealth can do to address that rising homelessness that I've talked about.

We're working with states and territories to deliver a better deal for renters. This is an absolutely massive housing agenda, but, before this budget, we were not yet doing enough. We needed to fix the critical problem of what investors versus first home buyers are facing at auction. I honestly, truly believe—having been in this debate and looked at this problem over a long period of time—that doing nothing about this is not an option for our country. If we want housing to be fair for Australians, we have to make the changes that are in this bill before us.

We're having a really important debate in the parliament at the moment about aspiration, and I want to be really clear about where the government stands on this. There is no greater aspiration in this country than the aspiration to own your own home. For most Australian families, this is without question the most important financial decision that they will make in their lives. We will fight every day for Australians, to make sure that you get ahead and do it in a home that you own.

These reforms to our unbalanced tax system are about helping Australians build financial security for themselves and for their families. We don't have to look too far to find survey data telling us that there is a majority, in some cases, of young people around our country saying that they actually don't think that homeownership is ever going to happen for them in our country. If you want to talk about an aspiration killer, that's it—a broken housing market that tells the young people of this country: 'It doesn't matter what you do. It doesn't matter how much you save. It doesn't matter how hard you work and how hard you study. The thing that you want most will still be out of your reach because the housing system is broken.' That's what a lot of young people are looking up and seeing today, and that's what we are seeking to change here.

I think every member of parliament in this chamber knows about the housing difficulties faced by their constituents. I truly believe that, because you have to know; you don't have to be talking to a voter for very long before housing comes up. It might be housing for them. Very often, it's not for them but for someone they love—a young person in their life who they are desperately worried about. They wonder if they're ever going to have the opportunity to set down roots in this country. I want people to understand what's happening right now in the parliament—a Labor government that is seeking to change. We stand for change. We do not want this broken system to continue hurting Australians. Those opposite are making speeches about everything except the housing difficulties faced by Australians because they are out defending the status quo, and I do not understand how in good conscience you can do that given the pain that this is causing Australians today.

It is, of course, not just the tax changes that those opposite are opposed to. Their commitments basically amount to ripping up every single piece of the $47 billion program, which is helping Australians right now. They want to wind back the five per cent deposit program. They want to scrap Help to Buy, which is getting into the market 10,000 Australians who in all likelihood would have had no realistic chance of getting in there. They want to scrap the Commonwealth's building of homes for people who would otherwise be homeless. How could you do that in the middle of a housing crisis? On this side of the House, we refuse to sit on our hands. We're not going to ignore the hard decisions and the difficult problems our country faces—and, if we're looking for hard decisions and difficult problems, we don't have to go much further than housing.

I will say very quickly that I've spoken about my portfolio but I do want to touch on the tax reform that is in this, which is about benefiting Australian workers. This bill contains tax cuts for every single Australian worker, and we are so proud as a Labor government to be delivering that. When we look at what Australians are confronting right now, we see people who are working harder than ever and are struggling to get ahead. I want to say to Australians: we want you to get ahead and we want you to do it in a home of your own, and that's what this bill is all about.

Tom Venning (Grey, Liberal Party) | Link to this | Hansard source

The government tell us they are building an economy that works for all Australians where they can earn more and keep more of what they earn, but this is plainly not true. They are breaking the economy. They are hurting workers, families and businesses. It is plain to see Labor can't manage money, so they are coming after yours. Australians did not vote for these big new taxes. The Prime Minister promised before the last election that he would not introduce them. He said this on more than 50 occasions, but he broke every single one of those promises. He showed disregard for the people of this country.

This budget is designed to manage the decline of the economy. It is not designed to grow it. We now face a death tax. We now face a tax on family savings. We now face a tax on renters. We face a tax on first home buyers. We face a tax on young Australians who are just trying to get ahead. We face a tax on small business and startups, the engine room of our economy. This is a budget of broken promises. This budget breaks the Australian dream. It is an assault on aspiration. It pulls the ladder of opportunity up from young people before they get their foot on the rung. It does nothing to improve intergenerational inequality. It makes the problem worse. It is intergenerational fraud. I repeat: Labor cannot manage money, so they are coming after yours. It makes sense. On that side of the house, no-one has started a business, worked in the private sector or taken risks. They are all union hacks.

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

Order! I think that's unparliamentary.

Tom Venning (Grey, Liberal Party) | Link to this | Hansard source

I withdraw, Deputy Speaker.

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

Good. Thank you.

Tom Venning (Grey, Liberal Party) | Link to this | Hansard source

This budget is unravelling. Every week, another broken promise surfaces. A death tax is buried in the fine print. We see dodgy inflation data. We see a secret $200 billion income tax hike. The Treasurer cannot keep track of his own—let's call them 'porky pies'. His economic modelling has one setting: stroke inflation, tax inflation, spend inflation—wash, rinse repeat: stroke inflation, tax inflation, spend inflation. Australians—in particular, regional South Australians—are living with the consequences. We face the mainland's highest inflation. They feel it at the supermarket. They feel it on their mortgage. They feel it in their pay packet. They feel it in their power bill.

Deputy Speaker, you're going to get sick of this, but I will say it again: Labor can't manage money, so they're coming after yours. This is the highest taxing government in our history. The budget locks in $77 billion in higher taxes. The Prime Minister has confirmed $273 billion in taxes that Australians did not vote for.

Debt is heading to $1.25 trillion. The interest bill will be $80,000 a minute. That is 12 credit cards being issued per Australian, behind their backs. Today's debt is tomorrow's taxes. And the next generation is being handed the bill.

We will fight these taxes. If they become law under Labor, a coalition government will repeal them. We want lower taxes. We want lower inflation—indeed, we need lower inflation. We want an economy designed to back the self-starters of the nation, not put them in handcuffs. Under a coalition government, you work, you risk, you win. Under Labor, you work, you risk, you pay, because they can't manage money.

This budget is built on broken promises, higher taxes, lower living standards, and fewer homes. The government's own budget papers say that 30,000 fewer homes will be built as a direct consequence of these new taxes—those are their numbers, in black and white. When you tax something, you get less of it; it's economics 101. The more you tax housing investment, the less housing investment you get. But this government has decided that that is the price young Australians should pay instead.

Their budget narrative is built around 'intergenerational fairness'. But strip away the rhetoric and look at the budget papers: they confirm lower housing supply. If you combine that with the government's migration overshoot of 90,000 people, it can only mean higher demand. Lower supply plus higher demand equals higher prices—again, it's economics 101. That is not fairness; that is a housing disaster hiding behind a spin doctor's catchphrase.

The government is getting both supply and demand badly wrong. The government's push to increase borrowing capacity for first home buyers will again just push up prices and saddle young Australians with more debt.

And young Australians are also investors. Labor's Robin Hood narrative, that it is only taking money away from the billionaires, away from the greedy boomers, is pure-gold spin. Young Aussies are smart and are investing in ETFs, shares and crypto—although I don't think crypto is necessarily a good investment.

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

Thanks for the advice.

Tom Venning (Grey, Liberal Party) | Link to this | Hansard source

They are trying to bring forward the day they can own their own home and retire self-sufficiently in the future. This government has looked that ambition and aspiration right in the eye and said: 'You know what? We can tax that.' That is not a housing policy or an ambitious tax reform; that is betrayal. Again, they can't manage money, so they're coming after yours; it is that simple.

But it isn't just investors and young Australians feeling it from Labor. The government is coming for small businesses, staking a 47 per cent claim despite doing none of the work. Small businesses are the self-starters of our nation. They work weekends, they work nights, they sacrifice holidays—they do everything to put themselves in a position to get ahead. The government's answer to that sacrifice is to come along on the trip with them, all the way to the finish line, and then tax. The Treasurer is cranking up the tax rate on small businesses, when they go to sell. Unless his ambition is to keep small businesses small, to encourage failure, these measures do not come close to meeting the needs of small businesses across the country—indeed, quite the opposite.

The rules of the economy are rigged against the self-starters. The compliance burden of industrial relations law, tax law and regulatory law falls on small businesses with the same weight as it does on big businesses, but small businesses do not have the HR departments, the legal teams or the lobbyists. Labor can't manage money, so they're coming after yours, and they're coming after small businesses and start-ups.

Small businesses are the backbone of our economy. For many owners, it is their retirement savings. It is their family pride. It is the first job for kids in their community. The government is not just taxing a business; it is taxing a life's work, a legacy. The government also hid a 30 per cent death tax in their budget like a sneaky little Easter egg. It was hard to find, but it is there. It really is there, buried deep in the budget papers. They hoped no-one would find it, but, eventually, it did surface. The Prime Minister was asked in question time here in this place, on the record, to rule out a death tax. He would not. We know why. He could not rule it out, because he had already planned one, buried in the papers he would hoping no-one would read. Taxing what families pass on to the next generation is not fairness; it is the government inserting itself between grandparents and grandchildren, claiming a cut of a lifetime's worth of blood, sweat and tears. That is not tax reform—it is a midnight raid. They can't manage money, so they're coming after yours and your family's.

The coalition will fight these taxes. If they become law under Labor, a coalition government will repeal them. We will repeal the CGT changes and the death taxes hidden in the trust rules. When a government taxes something, you get less of it—less housing, less savings, less investment and less small business. We will back aspiration and reward hard work by scrapping these taxes. The self-starters built this country. Our message to those targeted by this budget is simple: we will back you to be the future. You work, you risk, you win.

The coalition's tax-back guarantee will index income tax thresholds to inflation. We are forced to live by our means—so should the government be. Australians will not be taxed more simply because prices have gone up. When you earn your money, risk your money and save you money, you get to keep it. From 2028-29 the coalition government will index the bottom two income tax thresholds to inflation. This will protect around 85 per cent of income earners and deliver relief of around $250 in year 1, growing to more than $1,000 by year 4. From 2031-32, the top two thresholds will also be indexed, protecting all taxpayers.

The government's tax cuts will be wiped out by Christmas, owing to the inflation failures. Ours would not be. We will stop the cycle at the source. The coalition will restore normality to housing and migration. We will make sure Australia brings in only as many people as it can house. It's simple stuff. A coalition government will cap net overseas migration each year based on the number of new houses completed, not approved. Never again should a government bring in more people than a housing system can support.

A coalition will establish a $5 billion housing infrastructure fund to unlock up to 400,000 homes. We will fund essential, last-mile infrastructure: water, sewerage, power and access roads. We will simplify the construction code, cutting up to $70,000 off the cost of a new home. The first home buyer deposit scheme will be reserved for Australians. Labor has allowed 50,000 non-citizens to access it—this ends under a coalition government. The coalition will make a $50,000 instant asset write-off permanent for any business with a turnover less than $10 million.

When a tradie buys a ute, they can do more jobs. They can take on an apprentice and they can grow. When a small business invests, it grows. When a small business grows, Australia grows. We are launching the Stand with Small campaign and consulting on a new Small Business Act. This is built around four pillars: a single definition for 'small business' across the Commonwealth, a right to be paid on time by government and big business, a right to be heard at the RBA, ASIC, ATO and Fair Work, and a right to bid on government procurement. We will realign the tax system to promote risk, reward ambition and back self-starters. We will protect Australians' way of life and restore their standards of living.

This government is breaking our economy. It promised to protect Australians but instead it has delivered a budget of broken promises, crushing inflation, and a relentless assault on aspiration. The truth is simple: Labor can't manage money, so it's coming after yours. From hidden death taxes and punishing grabs on family savings to attacking the young Australians desperately trying to get a foot on the property ladder, this is the highest taxing government in our history, and it is rigging the system against hard work. It is stifling our small businesses, the engine room of our nation, with impossible compliance burdens and a staggering 47 per cent claims on life's work. We will not let this stand. We believe in the fundamental promise: you work, you risk, you win.

Matt Gregg (Deakin, Australian Labor Party) | Link to this | Hansard source

I rise today to speak in support of the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. Like every budget, there will be measures that attract debate. There will be people who would have allocated funding differently, and there will be those who would have preferred the government to avoid difficult decisions altogether. But governing is about making choices. It's about balancing competing priorities, responding to the economic circumstances before us and making decisions that are in the long-term interests of the Australian people.

One of the great strengths of Australia has always been the belief that each generation should have the opportunity to do a little bit better than the last one. My parents generation generally assumed that, if you worked hard, saved consistently and acted responsibly, homeownership would eventually be within reach. That assumption is no longer shared by many young Australians. Increasingly, young people and Australians more broadly are questioning whether the economic system is still working for them, and they wonder whether the opportunities available to previous generations will still exist for them.

Governments cannot solve every challenge, but governments do have a responsibility to ensure that public policy does not make those challenges harder than they need to be. If we're serious about preserving the Australian dream, then we must be willing to examine whether existing policies are helping or hindering the next generation. When I look at the budget, what I see is a government attempting to deal with some of the biggest structural challenges facing our country: persistently weak productivity growth, housing affordability, cost-of-living pressures, an ageing population in need of services and the need to maintain sustainable public finances while continuing to invest in the services Australians rely on. These are not challenges that emerged overnight, nor are they challenges that can be solved with slogans, wishful thinking or short-term political fixes. They require serious policy responses and a willingness to confront issues that have too often been deferred.

For the people of Deakin, housing affordability remains one of the most significant concerns I hear about. In Deakin, I regularly meet with young professionals—nurses, teachers, tradies and small-business owners—who are doing everything society has asked of them. They're working hard. They're saving. They're making sacrifices. Yet many still feel as though the goalposts keep moving further away. They're not seeking special treatment. They're not asking for a free ride. What they want is a fair opportunity. They want confidence that their efforts will be rewarded, and they want confidence that owning a home is still achievable. They want confidence that, if they work hard and contribute to their community, then they can build a secure future for themselves and their families.

Those are reasonable aspirations. They are aspirations that transcend political allegiances, and they are aspirations that deserve the attention of this parliament. Families are worried about housing costs. Renters are concerned about the availability and affordability of rental accommodation. Parents worry what their children might face in the future ahead. We're seeing fewer younger couples having children, contributing to a fertility rate that is now below replacement levels. A growing body of research suggests this is not simply a reflection of changing preferences. Many Australians continue to express a desire to have children, but they face financial and practical barriers to doing so. Access to homeownership is increasingly recognised as one of those barriers, alongside childcare costs, cost-of-living pressures and broader economic insecurity.

The aspiration to get a good job, earn a good living, own a home and retire with financial security has been part of the Australian story for generations. Yet, for so many, that aspiration is becoming harder to achieve. That's why I find some of the criticism of these reforms unconvincing. We're told that any attempt to revisit longstanding tax concessions is somehow a war on aspiration. I reject that proposition. Aspiration is not a tax concession. Aspiration is not a legal structure. Aspiration is the belief that hard work, reasonable choices and effort should allow people to build a better life for themselves and their families.

The reason I support these reforms is not that I oppose investment success or wealth creation—quite the opposite. I want young Australians to believe that, if they study hard, work hard, save diligently and make responsible decisions, they can still buy a home, raise a family and build a secure future. That's what aspiration means to me. And, if we're honest with ourselves, that aspiration is becoming harder for too many Australians. The question before us is not whether Australians should be encouraged to invest, build wealth or start a business. They absolutely should. The question is whether every aspect of the current system continues to serve that purpose.

Over time, some tax settings have increasingly rewarded existing asset ownership, particularly housing, while making it harder for young Australians to enter the housing market for a home, to build wealth and to get ahead. They have also contributed to distortions in the way that capital is allocated across the economy, encouraging investment to flow disproportionately towards existing housing and asset appreciation, rather than towards new productive activity, innovation and business investment. The result is that investment decisions can become driven as much by tax treatment as by underlying economic value and long-term economic benefit.

If we're serious about aspiration, we should be asking whether the next generation has the same opportunities that previous generations enjoyed, not whether every tax concession should be preserved indefinitely. A ladder of opportunity only works if people can still reach the first rung. The truth is that preserving exactly the same rules does not necessarily preserve the same opportunities. Our obligation is not simply to defend arrangements that worked for some in the past; it is to ensure that opportunity remains available into the future.

That's why these housing reforms matter. They're expected to support an additional 75,000 Australians into homeownership over the coming decade. They complement the government's broader housing agenda, including an additional $2 billion investment in enabling infrastructure, to unlock up to 65,000 more homes, and the broader Homes for Australia plan, which now exceeds $47 billion. This is not about punishing investors. It is about restoring balance. It is about ensuring that aspiration is not reserved for those who already own assets but that it remains available to those trying to buy their first home.

Housing isn't simply a social issue. It is an economic issue, it is a productivity issue and it is increasingly becoming a national competitiveness issue. When workers cannot afford to live close to employment opportunities, businesses struggle to attract staff. When families are forced to spend an ever larger share of their income on housing, they have less capacity to invest in education, skills and entrepreneurship. When capital is disproportionately directed towards bidding up the price of existing assets rather than creating new productive assets, the entire economy becomes less dynamic. That is why housing reform and tax reform cannot be viewed in isolation. They form part of a broader effort to ensure that investment flows to where it generates the greatest economic value.

One of the most important challenges Australia faces today is productivity. For too long, productivity growth has been weaker than we need. That matters, of course. Over the long term, productivity is what drives wages growth and improvements in living standards. We cannot sustainably increase living standards simply by borrowing more, spending more and hoping conditions will improve. We need an economy that produces more value from the skills, effort and capital we already possess. That is why this bill matters. It is not simply about immediate tax relief. It is also a bill about strengthening the foundations for future prosperity.

Our tax reforms, the housing reforms, the investments in infrastructure and the measures to reduce compliance costs all contribute to that objective. They're designed to make our economy more efficient, more productive and more competitive, because ultimately the best form of cost-of-living relief is sustained growth in wages and living standards—and it was great to see another announcement yesterday, handed down by the Fair Work Commission, that there will be another real wage increase, which was of course supported by the government. It's also important to recognise that these reforms are being delivered in the context of responsible fiscal management.

Another important feature of these bills is the support they provide to working Australians. Millions of Australians earn their income through work. They get up early, they contribute to their communities, they pay their taxes and they deserve a tax system that recognises and rewards that contribution. That is why I welcome the introduction of the $250 Working Australians Tax Offset. This is a permanent measure that will provide additional tax relief to more than 13 million Australians who earn income from work. It recognises a simple principle: that Australians who work hard should be able to keep more of what they earn. Importantly, it is not just a one-off payment; it is a permanent structural improvement to the tax system. For younger Australians in particular, it sends an important message that work remains the primary pathway to opportunity and economic security.

We're also introducing a $1,000 instant tax deduction for work related expenses. That's a practical reform. It reduces paperwork. It will simplify tax time. It will save millions of Australians the burden of keeping receipts and navigating complex deduction rules—and I know it will keep the gloveboxes of many of my friends and family cleaner!

The bill complements the investments we're making through the budget as well, such as through health care. It makes Medicare stronger. It makes medicines more affordable. It supports public hospitals. It locks in Medicare urgent care clinics as a permanent part of Australia's health system. For families in Deakin and communities across Australia, access to affordable health care is not a luxury; it's a necessity. The budget also makes important investments in aged care. But it also requires reform and a long-term commitment to building the broader support infrastructure that older Australians and their families increasingly rely on. While important progress has been made, I will of course continue to harass the Minister for Aged Care, who sits in front of me in this chamber.

The budget also recognises the increasingly uncertain world in which we live. Australia faces a more complex strategic environment, and this requires continued investment in defence capability, national resilience and the security of our nation. Again, these are not optional expenditures; they are essential responsibilities of government. A strong economy requires a secure nation, and a secure nation requires a government that is willing to make long-term investments in Australia's defence and national capability.

This budget is about aspiration. It is about setting Australia up for future prosperity. It is about fairness. And it is about getting the balance right. I commend this bill to the House.

Henry Pike (Bowman, Liberal National Party, Shadow Assistant Minister for Mental Health) | Link to this | Hansard source

The previous speaker spoke to that great Australian promise that I think has probably existed since 1788: that each generation of Australians is able to pass down to their children a stronger and more prosperous nation. We've had our fair share of challenges in this country. We've been through world wars. We've been through depressions. We've been through gold rushes and we've been through economic collapses. But it has always been the experience in Australia that each generation can, despite those challenges, pass on to their children a stronger, more prosperous, better country and that each generation of Australians can expect, as the previous speaker said, that little bit more than what their parents were able to achieve.

But I think all members here, if they were honest with themselves, would appreciate that probably this is the first generation—certainly in my view—where we can't actually make that promise to our children. The aspiration of homeownership is beyond the reach of too many Australians. Economically, we don't have the same opportunities that I think previous generations had, and I fear that my nine-year-old and my six-year-old will not be able to enjoy the same economic opportunities we've been able to enjoy.

The question before the House, and probably more so in this bill than in any other legislation I've seen in my four years here, is: how do we actually deal with that? Do we start to rejig tax settings and decide on different ways to share the pie? Or do we try to actually grow the pie? Can we grow the Australian economy? Can we create more wealth here? Can we get to a point where Australia is charging ahead with so much prosperity that we are seeing more opportunity created?

I think that's where the fundamental difference is between both sides of this chamber. On my side we're of the view that we should be trying to supercharge small business in this country. We should be giving them more opportunity, more benefits, more capacity or more confidence to invest and create jobs and wealth. Unfortunately, what we see through these changes is the exact opposite, and we think this is completely the wrong direction.

Let me start by, firstly, making some comments on the broken promise that this bill represents. A lot has been made in this chamber, and outside it, of the very nature of the fact that the Prime Minister promised so many different times that these tax changes wouldn't be implemented. We remember the 2019 election, when these tax changes were a prominent part of the Labor government's election platform and they suffered a defeat. This is one of the main areas that people point to now and say that they lost the 2019 election because of these and other tax changes they were trying to implement. There is a distinct reason why so many frontbenchers, including the Prime Minister, were at pains to say in the lead-up to the last election, 'No, no, no—we wouldn't be possibly be bringing in changes to negative gearing or to CGT.' Well, here we are.

I think it's incredibly disappointing for the dignity of this House that we have such a blatant distance—I want to be careful with my language here, because I don't want to be unparliamentary—between what was said before the election and what's being implemented now. I don't think it reflects well on any of us. I pointed out the fact that I feel this is an assault to aspiration. At a point when we should be encouraging business growth, the ultimate outcome of these changes will be $77 billion in higher taxes. When those opposite talk about trying to implement very, very modest tax changes or very, very modest tax cuts through this bill, we need to point out that headline: $77 billion in higher taxes. The Prime Minister has also confirmed that we'll potentially see $273 billion in taxes that Australians didn't vote for over the next nine years.

In relation to the specific provisions within this bill, schedule 1 introduces changes to the CGT regime. The coalition opposes those. Schedule 2 introduces changes to the negative gearing regime, and the coalition opposes those as well. Schedule 3 introduces the working Australians tax offset. We support that. Schedule 4 introduces the $1,000 standard deduction for work related expenses. That's another measure that we support. A lot has been said by previous speakers, and I won't dwell on the point that this bill has obviously been glued together in order to try to create a wedge. However, in its totality, we cannot support this bill because of the massive increases in taxes that we're going to see.

We're going to see a death tax. We're going to see taxes on family savings. We're going to see taxes on renters, first home buyers and young Australians trying to get ahead. We're going to see taxes on small businesses, startups and entrepreneurs—the people who are the very engine room of the Australian economy.

I want to speak on a couple of emails that I've received in my electorate office from local business owners on their response to this budget. I have an email from Nick. I won't mention Nick's business, but it is in a sector where Australia is not competing very well, and he's an individual who is creating employment in the Redlands in a very, very difficult industry. I'll read directly from it:

Quite simply, the changes to CGT and trusts will have a devastating impact to our business. All these years we have played by the rules, paid our taxes along the way and now the government wants to completely change the game, never mind the rules of the game. The change to trusts means that we now must consider possible changes to our corporate structure, but no matter what changes we make, the result will be higher taxes. It is completely unfair to introduce what is effectively double taxation on discretionary trusts. We are already being taxed at the company rate so why should distributions to a company be taxed a second time? It's not like multinational companies moving profits offshore to avoid tax—we have paid tax all these years, and we are in an extremely competitive industry where we cannot increase margins to adjust to this extra tax grab.

He goes on to say:

To put it bluntly, this budget has us seriously considering selling or even closing the business before June next year as there is no longer any reward for ingenuity, hard work, or effort.

I think that sums it up incredibly well.

I've also got a note here from Mark, who runs another business in my electorate that I won't name. He says:

Day in, day out, small business owners are the ones putting everything on the line. We're the ones taking risks, creating jobs, backing ourselves, and trying to build something meaningful not just for ourselves, but for our staff, our families, and the broader community.

…   …   …

When you start talking about changes to things like CGT and trust structures, it sends a pretty clear signal: that long-term effort, delayed gratification, and building something over time are no longer being encouraged but are instead being targeted.

That's always been my biggest concern when I go around my electorate. When I doorknock local businesses and I ask them about their outlook, I ask them, 'What's the next challenge for you guys?' Over the course of the last four years, I have gotten disheartening responses where people just tell me it's not worth the risk anymore. This just doubles down on that general sense of: 'Why am I taking these risks? Where's the reward? It's not worth it anymore.' That, of course, is terrible news for the Australian economy.

We'll put aside the business stuff for a moment. I want to talk about the impact on housing. The government's own budget papers say that this will produce 35,000 fewer homes. That'll be a direct consequence of these new taxes. So, when those opposite talk about wanting to ensure that first home buyers or aspirants can get their first step on that property ladder, I ask: can you explain to me the economics of the situation where if you have 35,000 fewer homes we're going to end up with more opportunity?

I'll also note that we had an interesting joint statement last Friday from the Property Council, the Real Estate Institute of Australia and Master Builders Australia. They've taken their own analysis of what the impact of these changes will mean for the sector that they represent. If I can be entirely honest, I think I've got more faith in their capacity to tell me the impact than I do in the government. They said:

… the Federal Budget will see new home construction go backwards, and higher than anticipated rental inflation.

Their modelling, which only goes for four years, says that the federal budget will cause new supply to fall by over 8,700 homes in that four-year period. Rents will increase $9 per week. There will be a reduction in the GDP of $864 million. On the day we're getting our national accounts figures, that should alarm everyone. They also say that construction jobs are to fall by 3,800. These do differ from Treasury's results, which are representing a more modest impact, but I think that that makes for quite sober reading.

Also, in the budget papers, it makes it clear we're not just going to get fewer homes. We're actually going to get higher rents. They acknowledge that in Budget Paper No. 1. To me, that isn't about intergenerational fairness. What that's actually doing is pulling up the ladder of opportunity for young Australians. It's not just about those young Australians who want to get their first step on the housing ladder. It's also about those Australians, and many of them aren't property moguls by any stretch of the imagination. When you look at the ATO lists of the occupations most likely to utilise negative gearing, right up the top there are police officers and nurses—the sort of people who we expect the Labor Party usually would advocate on behalf of. These are the people who are utilising this tax arrangement to try to do the right thing, build their wealth and set their family up for a position where they're going to have a comfortable retirement. Instead, all this does is bake in the advantage that those who've been able to utilise these arrangements have been able to enjoy for many decades and pulls the ladder up on that next generation of aspirational Australians.

People talk about the impact of negative gearing. Negative gearing has been part of our tax system for a very long time, long before we had a housing crisis. The problem is supply and the problem is demand. We've allowed too many people to come to this country without homes for them to live in, and that's why the coalition has adopted a policy that the opposition leader outlined in the budget-in-reply. We're going to peg those two figures together. We're only going to let in enough Australians to meet the—

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

If housing goes up, does migration go up too?

Henry Pike (Bowman, Liberal National Party, Shadow Assistant Minister for Mental Health) | Link to this | Hansard source

Well, we're going to allow demand to meet housing supply. And, of course, we're going to have to keep that significantly lower than that figure over that period of time because we've got so much to catch up. I'm interested in the interjections from the member for Forde, and I'm wondering whether he's actually made any attempts to sell the budget within his electorate, because I know that there are so many wonderful small businesses in his neck of the woods who would be very devastated about that. I wonder whether the member for Forde is one of those Labor backbenchers who's taken the opportunity to turn off all his comments on every social media post because he's so tired of the backlash that he's been receiving. It's very interesting.

I've talked about the migration figures, but, unfortunately, the budget also reveals that the government's going to overshoot their migration target by 90,000 people. That's nearly the size of a federal electorate. It's probably bigger than a federal electorate in Tasmania. That's a significant number of people, and you add that on top of the 1.4 million that were brought in in the first term of this government. The government talks about a narrative here on intergenerational fairness. Where's the intergenerational fairness in that?

Can I point out that debt is heading to $1.25 trillion. The interest bill on that is $80,000 a minute. To put that in the context of a household, can you imagine what Australia could be purchasing right now and what we could be investing in if we were saving on that interest bill? When the government's spending so much money—it's such an absolute state in the budget with running up so much debt and so much poor investment over that period of time—is there any wonder why they're having to increase taxes? When they run out of taxpayers' money, they need to get more of it, and that's exactly what these bills are entirely about. It's not about intergenerational fairness. It's about trying to fill the coffers of the government—very disappointing—at the cost of small businesses at the cost of those who are trying to do the right thing through a testamentary trust to try to ensure that the next generation are looked after. These measures that are part of the budget are an absolute attack on aspiration, and the coalition will not be supporting them.

Libby Coker (Corangamite, Australian Labor Party) | Link to this | Hansard source

Our communities succeed when hard work is rewarded. They succeed when a young person can build a future through their own effort, through buying their own home. They succeed when families can plan ahead with confidence, and they succeed when the opportunities available to one generation are passed on to the next. That's what this bill, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, is all about. It's about ensuring that our tax system better reflects modern Australia, and that means fairly taxing income, whether it comes from wages, shares or sale of a property.

As our economy changes, as our communities grow and as new challenges emerge, government has a responsibility to ensure that the rules continue to serve the national interest. That's what this legislation is about. It is about backing working Australians with a fairer tax system, it's about strengthening the dream of homeownership, and it is about ensuring the opportunity remains within reach for future generations. That's why these reforms are so significant. They are also measured. Importantly, they are guided by a simple principle: Australians who earn their living through hard work should know that the system is working for them too.

Across my electorate of Corangamite in Victoria, I meet people who are contributing every day to the strength of our economy and our communities. They are nurses in Torquay, teachers in Leopold, tradies working across the Bellarine, hospitality workers on the Surf Coast and small business owners in Ocean Grove. They work hard, pay their taxes and contribute to the communities they call home. They want a tax system that recognises their contribution and they expect government to tackle long-term challenges rather than leave them to future generations to solve. The Albanese government recognises this. We are a reforming government and we are acting. That's what this bill is about.

A key part of our reforms includes additional tax relief for working Australians. The working Australians tax offset will provide a permanent tax offset of up to $250 each year for more than 13 million workers. That is practical support directed at people who earn their living through wages and salaries. It is support for the teacher helping students reach their potential. It is support for a nurse working the night shift. It is support for the small-business employee opening up early and locking up late. It is support for the apprentice learning a trade, and it comes on top of our $10,000 incentive for construction apprentices and our support for free TAFE. These reforms build on that work too, because we know that, for our young community members and for all working Australians, every dollar matters, skills matter and getting rewarding work matters. Our measures recognise that reality.

The bill introduces a $1,000 instant tax deduction for work related expenses, because we know—the Albanese government knows—that, for many Australians, tax time has become unnecessarily complicated. This reform simplifies the system while also delivering additional financial benefit. Around 6.2 million Australians are expected to benefit. More than half are women. More than a quarter are under the age of 30. Importantly, workers who incur work related expenses above $1,000 will still be able to claim those deductions under existing arrangements. This is about making the system simpler, fairer and easier to navigate. Together with the income tax cuts already delivered by the Albanese government, these measures provide meaningful and ongoing support to Australian workers.

But this legislation is about more than tax relief. It is about one of the defining challenges facing younger Australians today: housing affordability. Homeownership has always been about more than bricks and mortar. It is about security, stability and belonging. It is about having a place to raise a family, to build a future and to become part of a community. Across my electorate, housing is one of the issues people raise with me most often—young people in Torquay at the local farmers market, young families in Ocean Grove at the footy, and workers in Drysdale, Armstrong Creek and Clifton Springs. Many tell me the same thing: they are working hard, they are saving and they are making sacrifices, but homeownership feels further away than it should. That is why the Albanese government is continuing to take action. Our housing agenda remains firmly focused on increasing supply. We are investing in social housing, we are supporting affordable housing and we are working with states and territories to boost construction and unlock more homes.

But supply alone cannot be the whole answer. We also have a responsibility to ensure that our tax settings support the goal of homeownership rather than working against it. This legislation limits future negative gearing arrangements for residential property investments to new builds. Importantly, existing investments are grandfathered. Australians who have made decisions under the current rules will not be affected. Investors who purchase new housing that adds to supply will continue to have access to negative gearing. We are changing incentives so that tax concessions are directed towards increasing housing stock rather than intensifying competition for existing homes. That matters, and it makes absolute sense, because, if a tax concession exists, it should support outcomes that benefit the broader community. As Australians, we're all in it together. Treasury modelling indicates that these reforms will help about 75,000 additional Australians purchase a home over the coming decade. For many young Australians, that could make a profound difference. It could mean the difference between remaining locked out of the market and owning a home of their own.

On top of this, the bill also reforms capital gains tax. It is important that debate on this issue be grounded in the facts. The reforms return capital gains tax closer to its original intent. Rather than applying a flat discount, the new arrangements will allow investors to index the cost base of assets to inflation. In simple terms, people will pay tax on real gains rather than inflationary gains. That is a simple, sensible principle. It reflects economic reality, and it helps ensure a more efficient and more fair tax system. These changes apply prospectively, with capital gains accrued before July next year remaining unaffected. Additionally, family homes are unaffected, and there is no inheritance tax. Despite the misinformation we have heard in this debate today by those opposite, these facts remain unchanged.

Importantly, these reforms also recognise the role small businesses play in our economy. Across my electorate and the broader Geelong region, small businesses are central to local communities and the local economy. They employ local people. They sponsor local sporting clubs. They help create the vibrant towns and neighbourhoods that make our region such a great place to live. That is why the existing small business capital gains tax concessions remain in place. Eligible small businesses will continue to have access to concessions that can substantially reduce or eliminate capital gains tax when a business is sold.

Treasury modelling released this week shows that around 90 per cent of Australian small businesses will be covered by these concessional arrangements. That is an important point, because, while there has been a great deal of commentary, the reality is that the overwhelming majority of small businesses will continue to benefit from concessions under the law.

Every generation faces choices about the future it wants to build. Sometimes those choices require government to challenge long-established tax arrangements, and sometimes they require us to look beyond the immediate political debate and focus on the long-term national interest. That is what a reforming government looks like: making the hard decisions that will benefit our nation and Australians now and into the future.

This bill recognises that housing affordability matters. It recognises that workers deserve a tax system that supports them. And it recognises that intergenerational fairness should not be simply discussed; it should be acted upon. For too long, too many younger Australians have felt that the pathway to homeownership has become increasingly difficult. For too long, the tax system has not always reflected the balance we need between rewarding work and rewarding investment. This bill builds on our work to address those challenges through careful, considered reform—reform that cuts taxes for workers, reform that supports first business owners, reform that encourages investment in new housing supply and reform that helps ensure that the opportunities Australians value today remain available to the generations that will follow.

At its heart, this legislation is about fairness. It's about ensuring that hard work is rewarded. It is about ensuring that aspiration remains achievable. That's what matters to Australians, and it's what matters to the Albanese Labor government. In closing: this bill is about ensuring that Australia remains a nation where opportunity is broad, not narrow; where prosperity is shared, not concentrated; and where the promise of a fair go remains as strong for the next generation as it has for every generation before.

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

Today we've seen scenes of high farce and calamity right here in the House of Representatives. It seemed to us, on this side of the chamber, that the government MPs weren't very keen to publicly back this government's budget. So the member for Wannon helpfully wandered in here with a motion that would require each and every one of them to front up and put their support for these toxic taxes in Labor's budget of betrayal on the public record. Well, the government weren't having a bar of that, and, in seeking to gag the member for Wannon, the member for Perth moved the wrong motion, so we had scenes of absolute calamity in here—which I think reflects the government's handling of this budget.

We've heard a lot from government MPs today about sound economic principles and the need to undertake tax reform. If only those important economic principles and that dire need for tax reform had been apparent to them before the election, they might well have fronted up to the Australian people with their real plans to reach deep into the pockets of Australians and tax their aspiration.

Of course, there is one little word that we're not allowed to say in here when directed at the government. It starts with 'l' and ends with 'e', and I won't break the standing orders. So I spent some time researching some alternatives that we might use. For the benefit of my colleagues who no doubt are looking for an expansion of their lexicon to describe this budget, here are just a few: falsehood, fib, untruth, fabrication, falsity, a story, a tale, a myth, deceit, deception, dishonesty, distortion, misrepresentation, perjury—if we ever succeeded in putting this man on the stand—perfidy, fudging, spinning, misstating, baloney, hogwash, poppycock, claptrap, bunkum, bull, codswallop or, my favourite, porkies. There are some more colourful alternatives that the Labor MPs are currently reading on their social media posts right up until the moment that they turn the comments off. It seems to me that that is now the default position of each Labor MP in this place, such has been the backlash to this budget of betrayal.

Central to it is a claim by the Prime Minister that he is cutting taxes. He is cutting taxes for Australians, as he tells us. But the reality is that this budget includes sneaky, hidden and toxic taxes that mean that his is just a charade of appearing to give a little while taking a lot. We all know people like this—people who come to a barbecue with a sixpack; they'll drink 12 and take a carton home.

Australians can see right through this budget and the tax grabs that it contains. Indeed, the central fib of the budget is the notion that it rebalances our tax system away from salaries and incomes towards investments and asset ownership. But, in the Treasurer's own budget papers, in Budget Paper No. 1, on page 140, there's a neat little chart that shows the share of personal income tax increasing next year, the year after that and indeed every single year after that out until 2062. That is the central dishonesty of this budget being exposed on page 140 of Budget Paper No. 1. This is not tax reform. This is a tax grab by a government addicted to spending.

Apparently it is the fault of the capital gains tax reform in 1999 that the housing market is so unbalanced today. But, when you pause to think about that for a moment, the fact is that the current housing crisis has nothing to do with those reforms in 1999, because the Labor Party have been in government for a full 10 years of the period since, and it never occurred to them in any of those 10 years to take a plan to reform capital gains tax to an election. Well, actually, it did. A former leader of the opposition, Mr Shorten, did take a plan like that to an election, and he got flogged because Australians were not going to stand by and see taxes on aspiration—the very thing that underpins the prosperity of our nation being attacked in such a way. But here we are now with a government reeling from a housing crisis of its own making because it failed abjectly to control migration to this country at the same time as it layered red tape and regulation on the construction sector, seeing housing completions fall quarter on quarter for the last year in my great state of Western Australia. At the same time, they have blown every single budget estimate of net overseas migration to this country since they came to power. But the fact is that there are fewer homes being built today in Australia than when the government took over. Is that about to change? Well, it is. It's about to get worse. The budget papers also contain, on page 158 of Budget Paper No. 1, the admission that there will be 35,000 fewer dwellings built in this country as a result of the tax policy changes contained in it.

But this is not actually a revelation. Prior to the election, when Mr My Word Is My Bond, the Prime Minister, was denying strenuously at every opportunity that he would touch these taxes, he was quoted before that election saying that changes to negative gearing would do nothing to boost the supply of housing in this country. It seems to me he had quite the epiphany after the election, and it is simply because, addicted to spending as he is and his government is, this is a prime minister who has run out of money. That's why this is not a budget of tax reform. It is a budget of a tax raid. Unfortunately, the targets are those families who save and sacrifice, who invest and work hard, the very Australians that have built this country into the sort of place that it is today.

Rather than seeking to contain his spending to limit the growth of government and to empower the private sector to do what it does best in lifting living standards in this country, he has presided over the largest collapse in real living standards in the developed world. There is a reason that Australians feel poorer today when they leave a shop, a cafe or a local business than when the Prime Minister came to office, and that's because they are. Real GDP per capita has gone backwards since this government came to power.

I've noticed that government MPs are now plopping the word 'real' in front of lots of different things, but it doesn't change the simple economics that, when inflation is outpacing growth, people in this country are going backwards. That's why we will fight these toxic taxes tooth and nail. If they become law under this government, we will seek to repeal them when, inevitably, Australians boot them out of office. Further than that, we will stop this happening into the future with our plan to index income tax thresholds. Self-starters are what built this country, and an Australian government should always look them in the eye when seeking to take more of their hard earned money and fritter it away on whatever else they're spending.

This is a budget that also contains $18.2 billion in new spending for net zero, including more than $1 billion for green hydrogen, which, I note, even the most prominent mining billionaires in this country who have had quite the infatuation with green hydrogen for many years now have walked away from.

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

Amazing!

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

Amazing! Technology and economics always win. The ideology of this government is no match for the simple physics of the equation.

We are providing to Australians an alternative plan, and it's one that Angus Taylor, the Leader of the Opposition, set out in his budget reply. It is a tax back guarantee. This isn't a guarantee that's provided in exchange for a raid on Australians' pockets, like the Prime Minister, who, like I say, is a 'bring six, drink 12 and take a carton home' kind of guy. This is a policy that will permanently put a handbrake on the size of government in this country, such that any future government would need to explain to the Australian people before an election what their plans were in terms of taking more of their hard-earned. By limiting the thresholds to inflation, Australians will not be taxed simply because prices go up in this country.

The Treasurer belled the cat when he suggested that the true cost of our policy would be some quarter of a billion dollars over the next decade. What that really said to the Australian people was that he planned to sneakily steal $250 billion from the Australian people over the next decade without asking for it. From 2028-29, a coalition government will index the bottom two income tax thresholds to inflation, which will deliver $250 in tax relief in year 1 alone, growing to more than $1,000 a year by year 4. From then on, the top two tax thresholds would also be indexed. What's important about this is that it provides permanent and ongoing protection against inflation.

The reality is that Australia's lowest paid were yesterday awarded a 4.75 per cent pay increase by the Fair Work Commission—a commission which is touted as independent. And yet, every time it makes a decision that this government is seemingly keen to take credit for, the minister is out there spruiking his responsibility. It seems to me it's a bit like when the RBA was lowering interest rates in this country, and the Treasurer was all over it like a rash. But, as we enter the cycle of seemingly never-ending interest rate increases under this government—15 and counting—all of a sudden it's the big, bad RBA that's got nothing to do with the Treasurer.

Well, the bad news is that it's got everything to do with the Treasurer and his rampant spending. His own budget papers expose that the size of government will increase for the next couple of years and hit 27.1 per cent of GDP in this country. That is proof that this is a government addicted to spending and also that it is the highest taxing government in Australian history. That's why it's so important the coalition bring forward this alternative plan to limit the size of government—to limit the thief in the night that is inflation from stealing from Australians and allowing, aiding and abetting the Labor government stealing from Australians without asking for it and without being up front about how they intend to do it.

Of course, on the coalition side, our founder of the Liberal Party, Robert Menzies, was the first to articulate that we are the party of homeownership. We're not blaming tax settings for creating the problem. We're up front that it's Labor's failure to manage migration and its layering of red tape and regulation, which is crushing the completion of new housing in Australia, that are to blame. Frankly, you can't tackle the problem here without being up front and honest about what it actually is. So the coalition will cap net overseas migration depending on the number of new homes completed in Australia. It seems to me very, very self-evident that the capacity of a country to welcome new people to it is directly linked to the number of new houses being built, and that is why this is such a sensible reform.

Of course, we also committed to establishing a $5 billion housing infrastructure fund to unlock some 400,000 new homes by connecting infrastructure like water, sewerage, power and access roads, which will get flat, zoned, structured and approved land developed into the lots that Australians need to buy in order to build the home of their dreams. That's significantly more than the Labor Party have promised, and indeed it includes a commitment for $1.5 billion to be quarantined for rural and regional Australia. That is so important to so many of us in this place, who see firsthand in our regional communities the impact that the Labor Party's failure to control migration in government is having.

Of course, I've said a lot in this place about the assaults on entrepreneurialism, reward for effort and incentive to strive that this budget and its toxic taxes include, not least of which is the impact that the junior mining sector could experience. That is because the small holes that mum and dad investors backed 20, 30 or 40 years ago have turned into the big holes that spit out cash today. That's what built this country, and that's why we will fight Labor's toxic taxes tooth and nail.

Zhi Soon (Banks, Australian Labor Party) | Link to this | Hansard source

As the Treasurer said last week, this legislation, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Amendment (Tax Reform No. 1) Bill 2026, is part of the most ambitious tax reform package in a quarter of a century. It delivers on three key objectives: firstly, that we cut the taxes for every Australian worker even further; secondly, that we make it easier for people to buy their first home; and, thirdly, that it better aligns the tax treatment of income derived from labour and income derived from assets. Changes like these are important in ensuring that we support the opportunity of homeownership for every single Australian but also make the reform we need to set Australia up for the future.

I want to start by going through the bill in detail and clarifying some of the points that people in my electorate have asked me about since the budget. Schedule 1 of the bill legislates the changes to capital gains tax arrangements so that the system operates as it was originally intended and directs investment in the market to where it is most productive for our economy and our society. Importantly, the proposed changes are prospective, not retrospective. Any capital gains earnt before 1 July next year will still attract the 50 per cent discount, with the CGT changes only applied on gains accrued after that date. Most importantly though, the legislation keeps in place the complete exemption for the family home as well as the existing four small-business concessions, which the vast majority of small businesses are eligible for, allowing them to pay reduced or no capital gains tax if and when they choose to sell.

Schedule 2 of the bill legislates changes to negative gearing arrangements, limiting it to new builds. Again, importantly, residential properties held before 12 May 2026, including those under contract but not yet settled, will still be allowed to be negatively geared in the future. This ensures that investors that made investment decisions that affect their future based on the existing rules will not be penalised. The current tax settings have locked a generation out of homeownership, and these reforms will mean an additional 75,000 first home buyers entering the property market over the next decade and direct investment into new housing supply.

Schedule 3 of the bill legislates the $250 working Australians tax offset, reducing the tax bill of every Australian who derives their income from work, benefiting 13.3 million taxpayers. This is another tax cut delivered by this government. It is a permanent measure and a structural improvement to the tax system, which recognises that for most Australians, especially young people, their income is derived from work.

Finally, schedule 4 of the bill legislates the government's $1,000 instant tax deduction, implementing Labor's 2025 election commitment. The instant deduction will allow taxpayers with income from work to deduct $1,000 from their taxable income rather than claim individual expenses. The Tax Office estimates this change will save individuals $380 million in compliance costs each year, making tax time both simpler and cheaper, with the average worker receiving an additional $205 back in their pocket.

This government has already delivered tax cuts to every single taxpayer by bringing down rates and raising income thresholds. Another tax cut will commence in just 29 days and again on 1 July next year. As the Treasurer said last week when the bills were introduced, under this government, taxes have been cut five different times in three different ways. When you combine the existing tax cuts delivered or legislated with those detailed in this bill, the average Australian worker will be paying up to $2,816 less in tax in the 2027-28 financial year, as compared to 2023-24.

As many reviews and much analysis have shown, Australia is in need of tax reform. Australia has an ageing population. That much has been clear for some time. In 2018, the Bureau of Statistics published a projection that the population aged over 85 would double to more than a million over the following 25 years. I'm noting, of course, that we are eight years into that timeframe now. That same projection stated that, over the same time period, the number of people aged 65 and over would also nearly double to 6.7 million people by 2042.

Finally, the ABS also noted that the percentage of people outside the traditional working age range of 15 to 64 would increase to 58 per cent, a growth of more than 10 per cent. When looking at our tax system and government spending, this is incredibly important context. A growing proportion of our population have finished their working lives and are therefore no longer paying income tax, as they should and as they've earnt. Meanwhile, the demand for government services, in the form of aged care, aged pensions, Medicare and the PBS and other health services, will grow.

The task of serious tax reform that rebalances the tax burden away from income earnt from wages and labour towards wealth and assets is one that any government was going to have to confront sooner or later or otherwise risk eroding the budget so significantly in the long term that services Australians rightly expect would not be delivered. This government is working to deliver that rebalancing, making sure our economy is in the interest of more Australians, businesses and future generations, instead of leaving it to the next generation to fix in the name of political expediency. It does this while delivering targeted tax cuts and cost-of-living relief to 13.3 million hardworking Australian taxpayers.

Secondly, I want to reflect on the housing market and environment that first home buyers are currently having to operate in. In 1970, the median age of a first home buyer was around 25 years old. Today, it is around 35, and one in five first-home-buyer loans are now going to those aged over 40. First home buyers today are working hard and having to save for longer than ever. This is a challenge that many young people currently view as futile. As much as they want to own their own home, they feel like they will always be playing catch up to a market that is stacked against them.

The status quo in our housing market is broken. The policy mistakes made by the coalition 25 years ago were intended to encourage activity but instead turned existing housing stock into a speculative commodity, the price of which has been consistently driven upwards. In the process, first home buyers have had to go up against investors who know the strength of their hand, because the concessional tax treatment will help them to outbid others. The idea that government should go on ignoring the reality of this situation to preserve a status quo that is unproductive for our economy and unfair to the vast majority of Australians is what this government is confronting. Already, since the budget, the news that existing properties won't be eligible for negative gearing has had an impact. An auction for a unit in Mortdale in my great electorate of Banks is one example. It was bought by a first home buyer at an auction in which every bidder would be an owner-occupier. This is being seen all across our country.

In conclusion, this legislation confronts a generational change and a challenge. It corrects some of the imbalances in our housing market while protecting people who have made major decisions under the existing rules. Most importantly, it fronts up to the challenge that our changing and ageing demography presents us. Since the budget, I have received feedback from members of the community in my electorate of Banks, and I've endeavoured to speak directly to as many of these constituents as possible. Like any reforming policy, these changes have garnered considerable debate. This legislation is about recalibrating investment and supporting aspiration. It is saying that income from labour and income from assets should be taxed fairly, and it is saying to first home buyers and young Australians across our country, as well as renters, that their aspiration to own their own home is still worth having and that we will support you in that ambition.

Leon Rebello (McPherson, Liberal National Party) | Link to this | Hansard source

Let's be clear with Australians about what this parliament is being asked to vote on. The coalition is being asked to vote against an income tax cut, not because we oppose tax relief for working Australians but because the government has deliberately wrapped modest tax relief inside a new bundle of toxic taxes on businesses, on retirees, on family savings, on renters, on first home buyers and on young Australians who are trying to get ahead. That's the choice that Labor have engineered. They've taken measures that the coalition supports and chained them to measures that we fundamentally oppose. They've put a tax cut in the same package as taxes that will make it harder to build wealth, to invest, to rent, to buy a home and to start and grow a business in this country. That's not good government. That's political blackmail.

This bill contains four key schedules. Schedule 1 changes the capital gains tax regime. Schedule 2 changes negative gearing. Schedule 3 introduces the working Australians tax offset. Schedule 4 introduces a $1,000 standard deduction for work related expenses. The coalition supports schedules 3 and 4. We support tax relief for working Australians, we support making tax returns simpler and we support Australians keeping more of what they earn. But we oppose schedules 1 and 2 because they represent a direct attack on aspiration, on investment and on the Australian dream. What Labor has offered working Australians is a fraction of relief years from now—relief that will arrive after families have already been crushed by inflation, bracket creep, higher mortgages, higher rents and higher grocery bills. By the time many Australians actually see the benefit, it will have been eaten away by the very cost-of-living crisis that this government has helped create.

This government expects Australians to be grateful when it hands back a fraction of what it has already taken. The Prime Minister promised Australians again and again that he would not introduce these taxes. He promised there'd be no changes to negative gearing. He promised there'd be no changes to the capital gains tax. He said all of that before the election because he knew that the Australian people would not vote for it. And now here we are. This is a budget of broken promises. It's not intergenerational fairness. It's intergenerational fraud. It punishes people who did the right thing, who worked hard, saved carefully, invested modestly and tried to build something for themselves and for their families. It punishes the self-starters of this nation.

Margaret Thatcher once put it perfectly when she said of British Labour that they would rather the poor were poorer provided the rich were less rich. She understood that politics of envy does not create prosperity. It does not fund better services. It does not lift people up. It drags people down. What was true of British Labour then is true of what has become of the Australian Labor Party now. Those opposite do not ask how we make more Australians prosperous. They ask how can they punish those who are. They do not ask how to grow the economy. They ask how to carve it up. That is the ideology behind this bill.

Let me turn first to negative gearing. Labor is dressing up these changes as though they are designed to help young Australians and first home buyers. That is false. The reality is simple. When you tax housing investment, you get less housing investment. When you make it harder to provide rental homes, you reduce rental supply. When rental supply falls, rents rise. It's not complicated. It's not ideological. It is economics 101. Before a young Australian buys their first home, they rent. So, when Labor puts upward pressure on rents, it does not help young Australians. It hurts them before they even get to the starting line. A young person who's saving for a deposit is already being hit from every direction. They're paying more rent. They're paying more for groceries. They're paying more for electricity. They're paying more because inflation has run through the essentials of life. Now this government wants to reduce the number of rental homes that are available to them while they save. That's not fairness; that is betrayal. Labor says that these changes will level the playing field, but what they're actually doing is pitting investors against first home buyers. They're telling investors, 'If you want to retain the benefit of negative gearing, go and buy new properties.'

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

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, and the member will have leave to continue speaking when the debate is resumed.