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

I rise to support the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026. This bill covers a fair amount of ground. It deals with tax practitioners, foreign investment, capital gains tax, renewable energy, mergers, competition policy, philanthropy and tax administration. That is quite a journey for one piece of legislation—an odyssey, one might say. But there is a clear thread running through it. This bill is about making our economic rules fairer, clearer and more effective. It strengthens regulation where stronger powers are needed, it removes unnecessary complexity where it serves no useful purpose and it makes sure the tax system applies fairly to everyone who benefits from doing business in Australia.

Schedule 1 is a good place to start. It strengthens the powers of the Tax Practitioners Board in response to the weaknesses exposed by the PwC leaks scandal, Australians rightly expect people who receive confidential government information to keep it confidential. They certainly do not expect that information to become a commercial opportunity. The scandal showed that the system regulating tax advisers needed stronger safeguards. But the weakness was not new. An independent review in 2019 had already identified a significant gap in the Tax Practitioners Board's enforcement powers. The regulator had too few options between low-level sanctions and the much more serious steps of suspension, termination or civil penalties.

The previous government received that recommendation and noted it. Then, as sometimes happens in government, the recommendation appeared to enjoy quite a few years on the shelf. This government is acting on it. The bill gives the Tax Practitioners Board a broader range of proportionate sanctions. There will be criminal penalties for unregulated, unregistered preparers as well as strong civil penalties, new consequences for breaches of the professional code, and penalties for false or misleading statements by unregistered preparers. The board will also be able to issue infringement notices, accept enforceable undertakings and impose contingent or interim suspensions. For the most serious conduct, the maximum period before a person can reapply for registration after termination will increase from five years to 10 years. That matters because regulation works best when the consequences fit the conduct. Not every breach requires the regulatory equivalent of a sledgehammer, but a regulator should not be standing there with a rolled up newspaper when serious misconduct occurs either. The Tax Practitioners Board needs tools between those two extremes.

Most Australians who go to an accountant, tax agent or BAS agent are not tax experts. That is precisely why they are paying someone else. They are placing trust in that professional, and they should be able to expect competent advice, lawful advice and ethical conduct. The overwhelming majority of tax professionals meet those standards. Strong regulation protects them too, because people who cut corners or provide unlawful advice should not gain commercial advantage over professionals who are doing the right thing.

There has been broad support for giving the board a wider enforcement toolkit. While some stakeholders have raised reasonable questions about safeguards around the new powers—and those concerns should be taken seriously—whenever parliament gives a regulator stronger powers, proportionality and procedural fairness matter. But the answer cannot be to leave a known enforcement gap in place. If the rules are important enough to have, the regulator must have the tools to enforce them, and that principle runs through much of this bill.

Schedules 2 and 3 deal with foreign resident capital gains tax, and the basic principle is straightforward if an Australian investor makes a taxable capital gain from an Australian asset, they can be required to pay Australian tax. A foreign investor should not receive a better deal simply because their head office happens to be overseas. These reforms clarify that capital gains tax applies where a foreign investor sells assets with a close economic connection to Australian land and natural resources, and that includes certain infrastructure connected with energy transport, telecommunications and water.

Until now, uncertainty has arisen because state and territory property laws can influence whether a particular asset falls within the Commonwealth regime, and that can result in different tax treatment depending on where the asset is located. Commonwealth tax liability should not be an accident of state property law. The legislation establishes a clearer Commonwealth definition and brings Australia's treatment closer to international standards and to the treatment of Australian investors.

It also strengthens the integrity of the regime. Foreign investors disposing of an interest worth $50 million or more where they claim the interest is not taxable Australian property will be required to notify the ATO. The principle asset test will also apply over the 365 days before disposal, rather than simply at the point of sale, and that is sensible. If tax treatment depends on the economic substance of an investment, we should look at the substance over time. We should not design tax laws around who can take the most convenient photograph on settlement day.

The legislation also protects settled historical liabilities. Foreign investors who have already paid capital gains tax as intended will not be able to reopen those assessments simply to obtain an unintended windfall following recent Federal Court decisions. Australia welcomes foreign investment. We need it. But welcoming foreign investment does not mean giving foreign investors an advantage over Australians. They benefit from Australian infrastructure, Australian institutions and Australian natural resources. It is reasonable that they contribute fairly. Foreign investment is welcome in Australia, but fair taxation is part of the deal. Schedule 3 shows that fairness and investment can be balanced.

The government recognises that Australia needs very significant private investment in new energy infrastructure, so the bill provides a targeted 50 per cent capital gains tax discount for eligible foreign institutional investors disposing of renewable energy assets until 30 June 2030. Eligible assets include wind, solar and hydro generation as well as large-scale energy storage such as grid batteries. For indirect investments, at least 75 per cent of the relevant underlying real capital must be attributable to renewable energy assets. This concession is targeted and time limited, and that is important. We are strengthening the long-term integrity of the foreign resident tax regime while recognising the scale of the investment task between now and 2030.

As an electrician, I am reasonably supportive of policies that result in more electrical infrastructure being built—call it professional bias! But the serious point is that building new generation storage and network infrastructure requires enormous amounts of capital. Government has an important role, but government cannot and should not finance the entire energy transition itself. We need private capital, including international capital, invested in productive Australian assets. The tax system therefore needs to do two things at once: protect Australians' revenue base and encourage investment where Australians need it. And that is what these schedules do. The concession has an end date because it is designed to address the immediate investment task, not create a permanent, preferential tax treatment.

Schedule 4 turns to Australia's merger regime. The government introduced the largest reform to Australia's merger control system in around half a century. When you make reform of that size, you watch how it operates in practice and refine it where necessary. That is not a sign the original reform was wrong; it is how competent regulation should work. The mandatory system commenced this year after a transition period designed to give the ACCC, businesses and advisers practical experience with the new framework. These amendments respond to that experience. First, where a merger should have been notified but was not, the transaction will be voidable rather than automatically void. That is an important distinction, because automatic voiding can create serious consequences for innocent third parties and surrounding transactions. Under these amendments, the ACCC can instead apply to the Federal Court for an order voiding the acquisition. The incentive to comply remains strong, but the consequence becomes more targeted.

Second, where an approved acquisition cannot reasonably be completed within 12 months, parties will be able to seek extensions of up to six months from the ACCC. Commercial transactions do not always run according to the optimistic timetable in the first board paper. Financial charges and conditions need to be satisfied. Approvals take time. Sometimes reality simply refuses to cooperate with the spreadsheet. Allowing extensions in appropriate cases is common sense.

Third, acquisitions that are unlikely to result in a practical ability to influence competition will not unnecessarily be pulled into the notification system. That is particularly important for venture capital and startup investment. We want the ACCC focused on transactions that that can genuinely harm competition, not wasting resources on low-risk investments that pose little practical concern. The goal is not maximum regulation; the goal is effective regulation, and that means strong intervention where there is genuine risk and less unnecessary paperwork where there is not. The practical benefit is certainty. Businesses should be able to identify whether an acquisition requires notification, what happens if something goes wrong and how an approved transaction can proceed where unavoidable delays arise. The ACCC, for its part, should be able to concentrate its attention on acquisitions that could substantially lessen competition. That is a better use of regulatory resources and a better outcome for consumers.

Schedule 5 updates Commonwealth legislation to give legal force to the National Competition Policy agreement reached by the Commonwealth, states and territories in 2024. It replaces references to the 1995 agreement and futureproofs the framework so parliament does not need to amend legislation every time those intergovernmental arrangements are updated. I suspect that even those of us who enjoy parliamentary debate can accept there are better uses of the House's time than repeatedly changing the name of an act. And the broader principle is worthwhile. Competition puts pressure on businesses to improve services, innovate and offer better value. Competitive neutrality also helps ensure that, where government businesses compete with private businesses, they do so on a fair basis.

Schedule 6 and 7 turn to philanthropy. The bill extends deductible tax recipient status to a number of organisations, helping them attract tax-deductible donations. The DGR changes specifically support the Ross House Trust, Tanarra Social Purpose Ltd and the i4Give Foundation while extending existing arrangements for the Australian Academy of Law and Cambridge Australia Scholarships. These are targeted changes, but they reflect a broader point: governments can continue to support community organisations without telling them how to do their work. Sometimes the most useful contribution is simply making it easier for Australians who want to give to do so.

The bill also renames ancillary funds as 'giving funds', implementing a Productivity Commission recommendation. This is not the most revolutionary proposition ever put before the House—but it is a better name. If an ordinary person needs a tax lawyer and a Productivity Commission report to work out what an ancillary fund actually does, there is probably room for improvement. 'Giving funds' do what the new name suggests; they allow donations to be pooled, invested and distributed over time to charities undertaking useful work in the community. Sometimes clearer language is a reform in itself.

Finally, schedule 8 makes a technical change to ensure foreign-resident capital-gains-withholding tax credits can be claimed in the same income year in which the underlying transaction is recognised. That reduces unnecessary compliance and avoids some taxpayers needing to lodge two returns for essentially the same transaction. There are few occasions on which I will object to removing unnecessary tax paperwork.

Taken together, these reforms are practical. They strengthen accountability after serious failures in the tax profession. They make sure foreign investors contribute fairly when they profit from Australian land and resources. They support the investment needed to build Australia's future energy system. They refine the merger regime based on practical experience. They modernise competition law, philanthropy and tax administration. Good government is not always about creating another rule. Sometimes it means strengthening a rule, sometimes it means clarifying one and sometimes it means recognising a rule that creates paperwork without achieving much and fixing it.

A fair tax system depends on people believing that the rules apply properly to everyone—individuals, businesses, advisers and international investors alike. Fair rules maintain public confidence. Effective regulators protect both honest businesses and the public from those who choose not to play by the rules. That is what this bill seeks to achieve. I commend the bill to the House.

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

I rise to speak on the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026. Although this bill derives its name from schedule 1 of this omnibus bill, my speech will focus on schedules 2, 3 and 4.

Schedule 2 of this bill legislates a long anticipated decision by this government to include a definition of 'real property' in the Income Tax Assessment Act for the purpose of CGT for foreign investors. It has long been a principle of the tax system—and, indeed, international best practice—that foreign residents are liable to tax on gains from assets that derive their economic value from the use of Australia's land and natural resources. But, until now, there has been no actual definition of real property in Commonwealth legislation.

As outlined in the explanatory memorandum, this bill is required to remove ambiguity created by the unintended narrowing of adjacent definitions under various state and territory laws that has emerged over time. The supposed ambiguity particularly relates to the treatment of assets affixed to land. This bill makes clear the expectation that foreign investors pay capital gains tax on such assets affixed to land, including utilities, infrastructure, transmission lines and substations but also wind turbines, solar panels and battery storage. In doing so, as the EM admits, the bill therefore 'broadens' the definition of real property.

It had been clear since the 2024-25 budget that the government intended to clarify this position, as they are entitled to do, to protect the stated policy intent and government revenue. I also don't dispute the principle that assets affixed to land do derive some economic value from Australia's land and therefore should be considered in reasonable terms under foreign-resident CGT regimes.

However, my concerns are twofold. Firstly, I don't accept the government's characterisation of this bill as a clarification. I believe it's reasonable that existing investors feel entitled to transition arrangements. My second concern is about the impact that perceived sovereign risk might have on foreign investment in Australia, particularly investment required to meet Australia's energy transition.

These provisions are being explained by the minister as if they are a simple clarification of the original policy intent. In his second reading speech, the Assistant Treasurer said:

This confirms that assets with a close economic connection to Australia … are in scope of the foreign resident CGT rules.

This responds to a longstanding area of uncertainty …

But I don't believe that honestly is the case.

The foreign investors and tax practitioners I have met with to discuss this bill outright reject this. To them there was no uncertainty and no confirmation required as there was a long precedent that determined certain assets excluded from the CGT regime. Law firm Clayton Utz described the broadening of the definition of 'real property' as a 'significant diversion from case law', and I have here a previous ATO ruling that summarises such case law to conclude that—in this case, for a wind turbine—the CGT regime does not apply: 'On balance, the circumstances indicate that the objective intention of the affixer is that the wind generation assets do not become part of the land. Accordingly, the wind generation assets should be characterised as common law chattels.' Incidentally, I am told that this ruling, which I received via email, has since been removed from the ATO website. The assertion that this is therefore a simple clarification is an unfair characterisation of how reasonable investors might have made investment decisions. It's therefore not unreasonable that existing investors could expect concessional treatment for investments that were under the regime they invested under, only to change.

This brings me to the transition arrangements included in schedule 3 of this bill. As first drafted, this bill was retrospective. Understandably, given the very reasonable interpretation of previous case law as I've just described, the draft legislation caused an enormous amount of outrage among foreign investors. Now, some people won't care about the outrage of foreign investors, but I do think this is for Australia always a question of sovereign risk. I'm therefore pleased that the government has since agreed that this change would be prospective only. Furthermore, I'm pleased that the government has made arrangements in schedule 3 for renewable energy assets to receive a 50 per cent CGT discount for CGT events. The bill before us does apply that discount only between commencement and 30th June 2030, a grossly inadequate timeline to achieve the stated objectives. Even at its earliest possible commencement, that window would be 16 days shorter than the average development approval timeline for onshore wind in New South Wales over the past five years. In other words, a project could exhaust the entire concession period before it had even been approved.

Foreign investors in clean energy assets tell me their average holding period is eight to 10 years, after which they typically sell the completed infrastructure on. Under the originally proposed 3½-year transition, any investment made in the last four to six years would be unlikely to have seen any benefit from this arrangement at all and would be paying the full 30 per cent rate on disposal. If it stayed at 2030, I honestly believe this would be in bad faith, and I think investors would have been reasonably disappointed with this. Again I raise the question of sovereign risk because Australia must maintain its reputation as a safe and stable country for investors to invest in—particularly those helping to grow Australia's energy infrastructure that we desperately need.

I have been engaging with both the sector and the government on these issues, and, while many in the sector would like to see the transition period extend to 2050 to support Australia's target of net zero by 2050, I believe the worst of these unintended consequences could be avoided with a date of 2040 while still preserving the policy intent. I really recognise and acknowledge the assistant minister's engagement with the crossbench and me as well as with the sector on this issue, and I'm very pleased to see that the amendment has been circulated extending the concession until 2040.

Australians are already paying for climate change. In June, the New South Wales Net Zero Commission put a number on it. University of New South Wales modelling found that 1.2 degrees of warming already locked in has been quietly eroding the state's economy for decades to the tune of roughly $21,000 per person in lost output in 2024 alone. Deloitte's forward look is worse: on the world's current trajectory, the average New South Wales worker is about $3,500 a year poorer every year for the next 50 years and a family of four faces a $3,000 higher annual grocery bill by 2070. That is not a 2050 problem; that is a payslip problem, it is a cost-of-living problem and it is already here. So let me say plainly that there is no pace of decarbonisation in this country that is too fast if we can do it economically. We must at an absolute minimum meet our 2035 target, and there is no version of that arithmetic that works without first decarbonising electricity and building the energy assets that we need.

So what does this actually require? AEMO's 2026 Integrated system plan has grid-scale wind and solar rising from 23 gigawatts today to 61 gigawatts by 2030. That is close to 10 gigawatts a year every year, starting now. Last year we switched on less than six, but, worse, last year just 2.3 gigawatts reached financial close, down 46 per cent on the year before—one of the weakest years in a decade. Capital committed to new generation fell from $9 billion to $4.4 billion. We can't build by 2030 what we don't commit to today. We are investing at a quarter of the required rate, and the gap is widening, not closing. Among the investors who actually write the cheques, just eight per cent believe we are on track. Tax treatment alone cannot bridge that gap, and no-one is pretending that it can.

The Clean Energy Investor Group's latest survey found that 77 per cent of investors say Australia's investment environment has deteriorated over the last year, with transmission delays now the single biggest barrier. Behind that are planning approvals, grid connection, curtailment risk, community opposition and the persistent fog around when coal is actually going to close. Just 58 per cent still rate Australia as an attractive destination, down from 69 per cent a year ago. The government needs to be laser focused on every one of these because these are the main game.

This is why tax changes still matter. Foreign investors supply around three-quarters of clean energy investment in this country. They are not reading our budget papers looking for reasons to stay. They are pricing risk, and every change that arises without warning, without grandfathering and with a transition window shorter than the life of the asset gets priced in as a higher cost of capital on every project forever.

I want to stress that I understand the motivations of this bill. I recognise that these changes are not the biggest impediment to our transition, but they don't land in isolation. They land on top of the transition delays, on top of connection queues, on top of coal closure uncertainty and on top of changes to thin cap and reporting requirements. They have the danger of accumulating into a slowly decaying investment environment. I commend the government, and I particularly commend the minister, on the sensible amendments they have made since the exposure draft. The bill is better for the consultation process and the government's good faith engagement with the crossbench. It's an approach I really encourage them to take—so thank you.

I'd also like to briefly touch on schedule 4 of the bill. Schedule 4 addresses some of the core concerns raised during the first six months of the new merger regime, and I want to commend the government for listening and acting on that feedback swiftly. I've been contacted by people, particularly within the venture capital sector, who were particularly concerned with the reporting for minority interests which were deemed as exercising joint control, which created significant, unnecessary and onerous reporting requirements for potential acquisitions from minority partners. The feedback from the sector was that the interpretation of the law was significantly outside the intention of the law—certainly when it was first explained. That was of enormous concern. It was actually, again, slowing down investment in some of our fastest growing and most important sectors.

I raised this directly with the minister for competition at the time. I'm really pleased to see the government acted swiftly on this, and I have had feedback to say that the government's swift action on this and bringing forward of this bill have meant that the sector is already recognising the changes, and this is making a significantly positive impact on the investment environment, which is so important. So I thank the government and the minister for this. Again, on behalf of my constituents, I'm grateful to the ministers for the work that they have done to bring this bill to a place that is a very sensible compromise for many and still supports the transition.

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

I rise in support of the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026. It's a bit of a mouthful, isn't it? In doing so, I'm glad that I get a chance to talk about this bill in the presence of the Assistant Treasurer and Minister for Financial Services, who has done a lot of work not only on this bill but across the government's economic strategy, particularly around looking after ordinary Australians and ordinary businesses that don't have the advantage of access to the big consultants and the big money—the ordinary mums and dads and small businesses that play by the rules. They play hard, but they play honestly. Whether it's in superannuation, in reforms around digital assets or in strengthening the safeguards that Australian consumers have with regard to tax professionals, I appreciate the Assistant Treasurer's work. I'm glad the Assistant Treasurer is here to be able to hear that this colleague particularly appreciates that work.

This work sits well and truly within the core Labor mission, which is, at its heart, to make sure that there is equality of opportunity, that there is equality of access to the law and that people should play by the rules. Those are very much core Labor values. In fact the recent 2026 ALP conference reaffirmed that this legislation very much sits within the platform. Chapter 1 paragraph 17 says:

Australia's taxation system should be efficient, simple, transparent and equitable. There is no place for tax evasion. Meeting Australia's economic and fiscal challenges requires everyone, including Australian and multinational corporations, to pay their fair share of tax.

It's no coincidence that is in our first chapter, because that is a core part of our platform. It is a core part of the government's strategy around taxation and around levelling the playing field for Australians. It is within that part of the platform that this work exists well and truly.

When you look at the 2026 ALP National Conference, it's because ultimately the Labor Party is made up of teachers, electricians, pensioners, students and people who through disability aren't able to work. We are the most broadly representative party in the country. We hold our conferences in public, so it is hardly surprising that you end up with a platform like that and you end up with a government, the parliamentarians elected, to implement that platform who take it very seriously and are very focused on delivering on that platform. Ultimately it means that everyone should contribute their fair share, that nobody should be able to use their wealth or their contacts to get around the rules and that they shouldn't be able to play by a different set of rules.

What this legislation does is make sure that somebody who's getting their tax done by an agent has the confidence that it's being done properly, that the honest small accountant shouldn't have to worry about competing against the dodgy or unregistered provider, that that an Australian business shouldn't have to compete against foreign multinationals who are able to use big consultants to game the rules and that foreign investors should play by the same rules and should not have tax advantages that Australians don't have. At the very heart of this legislation lies the PwC scandal, something that really tells the story of this legislation. This legislation, of course, is a part of the government's response to that scandal. It sets the principle that there should be one set of rules applied fairly and that everyone does their bit.

I have taken the opportunity in this House before to talk about my own personal experience of running my own businesses. I know that there are two ways to run a business. In fact it's the philosophy that I apply to how a country can be run—There are two ways to run a business as there are two ways to run a country. You can strip out the profits and you can run the business into the ground, or you can invest in your plant and your people. The Labor way is very much about investing in your plant and your people, because we want to see an economic return on that investment, because we value what business does, but, more importantly, we value what Australian businesses do, and we really want to back Australian businesses.

The irony of this legislation is the story of PwC, because this legislation does two things. It enhances the Tax Practitioners Board's sanctions framework, and it strengthens the foreign resident CGT regime. It deals with dodgy tax advisers, and it's part of the government's strategy to deal with foreign multinationals having a lend. This legislation tries to do those two things. The story of PwC, in fact, was exactly those two things. You had dodgy advisers trying to get around the very laws they helped to write, when it came to making multinationals pay their fair share of tax.

Rather than me try garble my own version of it, I came across a story from 5 May 2023 by the ABC business reporter Kate Ainsworth, who I thought summed it up really well. I'll just read a bit of what she had to say in her story, so I know that what PwC did is on the record. She said:

To understand what's happened, we need to go back in time.

About a decade ago …

She wrote this in 2023, so that's somewhere in 2014. She goes on:

… the federal government asked PwC's international tax expert Peter-John Collins to help them design laws that would solve a problem …

And that problem was getting big multinationals to pay their fair share of tax. She goes on:

That legislation was known as the Multinational Anti-Avoidance Law (MAAL) …

I'm not quite sure how it's pronounced. She goes on:

… and was a major strategy of the then-treasurer Joe Hockey under the Coalition government … The MAAL was designed to stop major companies, particularly tech giants, from shifting their profits away from higher-taxing countries like Australia to others with lower tax rates, such as the Netherlands and Singapore.

In his dealings with the government and designing the tax laws, Mr Collins was required to sign multiple confidentiality agreements which specifically stated that the knowledge could not be disclosed.

But the Tax Practitioners Board found Mr Collins shared that secret knowledge with people within PwC, which gave the firm an advantage by being able to come up with ways for companies to get around paying the new tax.

PwC then used this inside information to get new clients and make money. They were even boasting about it internally, and all of this was happening without the government's knowledge until earlier this year.

Put simply, PwC had some juicy but confidential information that big companies could benefit from—and pay them for.

How did it all unravel?

Fast forward to December 2022 and the Tax Practitioners Board (TPB) announced it had suspended Mr Collins's tax licence for two years because of integrity breaches.

The TPB was scathing in their assessment of Mr Collins, finding he had been leveraging his insider knowledge to benefit PwC and had failed to manage his conflicts of interest—putting him at odds with the codes he must comply with as a tax agent.

The ruling stated:

"Internal communications within PwC indicated that Mr Collins was aware that the confidential knowledge he gained from the consultations with Treasury would be leveraged to market PwC to a new client base."

It wasn't until a month later, in January, after the Australian Financial Review (AFR) published a story saying Mr Collins leaked government tax plans to clients which led to his deregistration, that Treasurer Jim Chalmers commented.

"[I'm] absolutely furious, absolutely ropeable about these revelations," …

…   …   …

"This is a shocking breach of trust, an appalling breach of trust."

Later in the article, Kate Ainsworth says:

What PwC did was put profits before purpose. If they got away with it, the Australian economy would have been $180 million worse off, because these big foreign companies wouldn't have been paying as much tax.

At a Senate estimates hearing in February 2023, the ATO commissioner said that an avoidance scheme to help big companies avoid paying tax was being marketed to overseas companies within weeks of the new laws taking effect in 2016. The commissioner told the hearing that it was noted at the time how quickly the scheme had been put together and found it frustrating that the new laws were being potentially dodged so quickly. He said:

Normally it would take a while for people to look at it, how it all fits together.

Well, it didn't take a while, because they were designing the system and then they were out there marketing ways to get around it. I think 'a shocking breach of trust' does sum up exactly how the Australian people should feel. We know that, when we found out about it, the Australian people were truly disgusted that PwC had been carrying on in this way.

This latest legislation fits within the government's work to make sure that, if that ever happens again, they will not only be caught quickly but be prosecuted properly. In fact, a lawyer friend of mine told me that it is white-collar criminals who look at the penalties and then weigh up whether or not it's worth it and that often they're the ones doing the calculations. So the tougher the better—and these laws are tough.

To finalise, there are two things that this legislation does that I want to really commend to the House. We end up with a system that is safer for Australian consumers, we end up with a system that will properly penalise and deter the sort of behaviour that we saw with PwC and we end up with another arm of our plan to look after Australian business and to make sure that there is a level playing field for Australian business against foreign investors.

Look at how important it is to protect the integrity of our tax practitioner system. There's something like 43,000 registered tax agents in Australia, 20,000 registered tax financial planners and 15,000 registered BAS agents. Last year, according to the explanatory memorandum here, something like $426 billion was collected by the ATO, and much of that money was reconciled, it says here, via the tax returns and BAS prepared by those agents. In fact, 74 per cent of individual income tax returns were prepared by tax agents. The TPB annual report of 2024-25 said that essentially 3½ thousand clients were assisted to reset their tax affairs following sanctions against their tax adviser and that the TPB dealt with tax advisers who failed to act lawfully and ethically, including around 275 serious sanctions to stop misconduct and protect the public. It is important that we maintain the integrity of our system, both for consumers and for the public, and it's important that we advance the cause of making sure that multinationals and foreign investors pay their fair share of tax. To that, I commend this bill to the House.

Monique Ryan (Kooyong, Independent) | Link to this | Hansard source

The Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026 is an omnibus bill containing a number of unrelated measures. My remarks today will focus on schedules 2 and 3, which amend Australia's foreign resident capital gains tax regime and establish a concessional framework for renewable energy investments.

First, I acknowledge that the government is trying to address a genuine problem. Australia's foreign resident capital gains tax regime has become overly complex and difficult to administer. Key concepts have relied on ordinary meanings and differing interpretations across jurisdictions. In particular, the absence of a statutory definition of 'real property' has created uncertainty regarding the application of capital gains tax to assets with a close economic connection to Australian land and natural resources. It's appropriate that the government addresses this inconsistency such that the introduction of a clear statutory definition of real property is a worthwhile reform. The bill recognises that modern infrastructure and commercial arrangements often derive substantial value from their connection with Australian land. The new definition appropriately encompasses interests in land, rights over land, contractual rights, licences and certain assets which are fixed or installed on land.

The expansion of Australian taxable real property is also a positive step in this legislation. The government's bill clarifies that taxable Australian real property includes land situated in Australia, assets fixed or installed on Australian land, water entitlements and options to acquire taxable Australian property. These changes will provide greater certainty, will improve consistency and will ensure that assets are deriving substantial value for foreign investors from Australian land are appropriately brought within Australia's tax base.

Australians expect investors to contribute appropriately to our tax system, holding mature discussions about capital gains tax reform, as has taken place already on the application of CGT to property assets. It's encouraging, albeit long overdue. For much too long we've allowed distortions in our tax system to compound inequality across generations. Young Australians in particular have borne the brunt of that inequity. They have been locked out of housing, forced to stump up ever more income on their rising rent and power bills, and are inheriting the increasing costs of living on a warming planet. This is a conversation that we have to have.

My electorate in Kooyong has participated very enthusiastically in two recent surveys, which have elicited almost 2,000 responses from community members who have expressed overwhelming support for changes that limit CGT concessions applied to property investment. I'm also really pleased to see the Albanese government now adopt the substance of an amendment that I put forward recently to increase eligibility for CGT exemptions to businesses with an annual turnover of more than $10 million. This is a commonsense change which will make a real difference to 2.7 million small businesses.

However, while it's right to frame tax reform as a real opportunity to address intergenerational inequity and to establish more consistent settings across our economy, there are some lines that we shouldn't cross. Imposing reforms retrospectively, I believe, is one of those lines. Forcing foreign investors who've made decisions in good faith based on one set of rules to suffer financial consequences when those rules are later rewritten will inevitably distort investment decisions and will inevitably send global capital elsewhere. Earlier iterations of the legislation now before the House caused significant concern to industry groups, institutional investors and clean energy advocates in that regard. It was really positive news to see them removed from the bill before it came before the House today.

But while the government has responded appropriately on retrospectivity, schedule 3 still contains significant flaws. Foremost among them are changes which may threaten Australia's clean energy transition. At issue is not whether foreign investors should contribute to Australia's taxation base. Of course they should. The central issue is whether the design of the renewable energy concession properly reflects the realities of clean energy investment and the scale of the transition that we have to undertake. Australia is embarking upon the largest energy transformation in our history. We're undertaking this colossal challenge to overhaul the foundation of our economy because renewable energy is cheaper, more efficient and more reliable for households, for businesses and for industry. It gives future generations the best shot possible as at a safer future as our climate warms.

Delivering this transformation requires enormous quantities of capital—new wind farms, new solar farms, more batteries and associated infrastructure to move energy from where it's generated to where it's consumed. It's going to require significant investment over several decades. Much of that investment currently comes from international investors who are already providing the finance and expertise that is powering our energy transformation. Global investors comprise 75 per cent of Australia's renewable energy capital. Much more of that capital is going to be needed for us to meet our climate and clean energy targets.

The government's bill concedes the importance of this investment by issuing a 50 per cent CGT discount for investors who are disposing of eligible renewable energy assets such as renewable energy generation and battery storage assets. At this stage, however, the sunset date for this concession is 30 June 2030—less than four years from today—for investment horizons that are typically set at least two decades into the future. A tax concession that expires in 2030 cannot possibly provide meaningful certainty for investors making decisions today about projects expected to operate into the 2030s and beyond.

The arc of Australia's energy transition brings this disconnect into sharper focus. Our 2030 renewable energy target is 82 per cent. It is a target that the Climate Change Authority has warned we are not on track to meet, even if the pace of clean energy deployment doubles for the rest of this decade. We're pursuing an even steeper rate of emissions decline to reach our 2035 climate target of 62 to 70 per cent emissions reduction on the 2005 baseline. The biggest challenge of all is reaching our legislated net zero emissions goal by 2050. A key concession supporting investment in the very technology required to meet these goals is currently slated to end before most of that work has been completed and before those assets have delivered returns to investors.

So I and many of my crossbench colleagues have been asking the government to reconsider this expiry date. The Clean Energy Investor Group and the Investor Group on Climate Change have argued that the transition period does not adequately reflect the long-term nature of renewable energy investment. They've recommended extending the concession such that it will better align with Australia's clean energy objectives and the expected retirement time line for Australia's coal fired power stations, most of which take place in the second half of the next decade. They're right: the clean energy CGT discount has to be aligned with Australia's decarbonisation pathways and the reality of investment decisions for clean energy assets. It shouldn't be aligned to the end of the forward estimates.

As the Clean Energy Council has noted, there is a direct precedent in Australian tax reform for a longer transition period linked to the life of infrastructure assets. The 2018 Stapled Structures integrity reforms package introduced a 15-year transition period for existing economic infrastructure staples. Renewable energy assets have operational lives of 20 to 30 years, and the policy rationale for a transitional period of these assets is at least as strong. It makes perfect sense to align the transition period for clean energy infrastructure with a federal emissions reduction target of 62 to 70 per cent by 2035 as an intermediate milestone and ultimately with the 2050 net zero objective. We should ensure that the concession remains in place for as long as the capital that is required to attract it is needed.

Another concern with the government's four-year concessional CGT window is that the projects that are reaching financial close in 2027 or 2028 are unlikely to be disposed of before 30 June 2030. As a consequence, the practical beneficiaries of the concession are much more likely to be investors involved in secondary market transactions involving operating renewable energy assets than those who are actually financing the next wave of generational capacity. Australia's energy transition does not need tax policies that will facilitate ownership changes just between existing assets. We need new additional investment in generation, in storage assets and in enabling infrastructure.

Recently at the National Press Club the Minister for Climate Change and Energy rightly celebrated some of the Albanese government's successes, such as the Cheaper Home Batteries Program and the EV rollout. He announced new initiatives that lean into Australia's traditional cleaner energy strengths, like the Missing Middle scheme for midcscale rooftop solar. In the same speech he also acknowledged that there remain significant challenges—headwinds, roadblocks to progress. A short concessional period is an unnecessary additional roadblock to progress. It would be an own goal, of the government's own making. So I make the point again that the concessional CGT period must be extended well beyond 2030.

Investable assets are narrowly defined in this bill. Explicit reference to renewable energy generation and storage are positive inclusions. However, the transition to a low-emissions economy depends on a much broader suite of infrastructure. Critical minerals processing, electrification infrastructure, sustainable fuels and other supporting assets all form part of Australia's long-term energy transformation, but they're not mentioned or defined in this legislation. Does this mean that investors who back these mission-critical low-carbon assets and infrastructure are ineligible to receive the CGT discount?

Australia's clean energy future can't be understood solely through the lens of generation assets. In this legislation the government has taken a broad and contemporary approach to defining real property and taxable Australian real property. It should apply the same forward thinking when it's considering the infrastructure that is required to support decarbonisation throughout the economy.

I commend the Albanese government's substantial focus on tightening Australia's capital gains tax regime. I support strengthening Australia's foreign capital gains tax regime, the introduction of a statutory definition of real property, and the expansion of taxable Australian real property to ensure that assets connected to Australian land are properly captured within our tax base. I also support the government's decision to remove retrospectivity from these reforms following stakeholder feedback, including feedback from the crossbench. However, it's also the case that Australia needs to build renewable energy infrastructure as fast as we ever have in order to meet established renewable energy and climate targets. We are not currently on track to meet those targets.

For this reason, schedule 3 of this legislation needs further improvement. The renewable energy concession should be extended well beyond 2030, and it must be aligned much more closely with our established decarbonisation goals. The current sunset date is too short, too narrow and too poorly aligned with investment horizons that underpin large-scale renewable energy projects.

Australia needs more clean energy investment as we electrify the foundations of our economy, not less. Our tax system should support that objective. A strong tax regime and certainty for foreign investors are complementary goals. While the government has made good progress on the former, as it stands, there's still significant room for movement on the latter. I urge this parliament to ensure that these reforms strengthen Australia's tax base without weakening the flow of the capital required to build the clean energy systems that will underpin the safety and prosperity of future generations.

Australians expect a fair return of tax from the profits made by global investment into assets built on our shores, just as we expect local businesses and investments—not to mention multinational gas corporations—to pay their fair share of tax. But we have to be careful that we don't tax away the clean energy transition in the process. I commend the legislation to the House.

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

This is a subject very close to my heart, and this bill, frankly, does many things, but I'm going to focus on just one part of that today: the tax changes that, until today, risked making it significantly more difficult to build clean energy that we need for an affordable, reliable, competitive and secure energy system. The Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026 increases the value of the CGT payable by international investors in Australian wind, solar and large-scale energy storage. The consequences of these changes is to disincentivize investment in clean energy.

But today, after months of pressure from the crossbench and industry, the government has announced an important change to the bill, which will greatly decrease the risks posed to clean energy. To be clear, these risks are not entirely gone, but the situation is much improved, and I commend the government for making these changes. Let's step through what's going on in this bill. But let's also be very clear from the beginning that, like it or not, tax—like death—is a certainty. Tax is also necessary. It pays for things like hospitals, schools, roads, public housing and social supports—all the things that make this country function.

When foreign investors profit from Australian land and natural resources, it's entirely reasonable for them to contribute their fair share to the country that generated this wealth. This bill does that by broadening and clarifying what counts as taxable Australian real property so that CGT will be payable on a wider range of assets, including renewable energy assets. This isn't changing the CGT rate itself; it's broadening the tax base. But the practical effect for foreign investors is the same as if the rate had gone up. More of what they hold and sell will now be subject to more Australian tax.

Ensuring that foreign investors pay their fair share is a good idea, so my argument today is not that these reforms are ill advised in principle. My objection is that in practice the changes disproportionately affect clean energy projects, which we should be doing everything we can to support. We know renewables are pushing down power prices. We know that they are displacing imported fossil fuels and improving Australia's energy security. We know that we need to be building more of them faster. Building renewables is capital intensive, and much of that capital comes from offshore because the scale of what we need simply outstrips what domestic capital alone can provide.

Between two-thirds and three-quarters of investment in Australia's clean energy sector comes from international investors. Long approval times and issues with transmission are already making it hard for projects, wind projects in particular, to meet financial closure. Our 2030 target of 82 per cent clean energy is a worthy goal, but it's looking doubtful as we stand. Disincentivising clean energy investment at this critical juncture is the exact opposite of the kinds of policy signals that we should be sending.

These tax changes have been signalled since the 2024-25 budget, but when the government announced the detail earlier this year it included an ability to retrospectively tax investments all the way back to 2006. This would have been unprecedented, and, to its credit, the government has since removed this retrospectivity. Until today the government had included a transitional 50 per cent discount for four years to foreign corporate investors who dispose of Australian renewable assets. It framed this as a generous concession, reflecting its commitment to Australia's clean energy future, but this was misleading because a four-year transition window is simply not how renewable energy investment works. These projects are built, at a minimum, on eight- to 10-year investment horizons, often much longer—multidecades. A four-year window would have created a very obvious incentive to sell before 2030 while the 50 per cent discount still applies, and then commit no further capital after 2030—in other words, a fire sale of existing assets in the lead-up to 2030 followed by a freezing of new investment once the discount ceases.

Thankfully, after months of advocacy from the crossbench and industry, the government has agreed to extend that transitional period all the way to 2040. I commend the government for this concession. It's an extra 10 years, and this is very welcome. I'm very pleased that the government has engaged constructively and in good faith on these amendments, and I thank the minister for doing so. Extending the transition period for an extra 10 years will mean that the law more accurately matches the timescale of this century's energy economy build-out, and it aligns with real investment cycles rather than the arbitrary four-year political deadline.

A 2040 date will now capture one to two whole investment cycles, ensuring that more clean energy is built, and more cheaply, and with the knowledge that the policy risk factor doesn't have to be baked into the cost of capital. The reality of the clean energy build-out so far is that we are relying on private capital to do much of the heavy lifting. The government is underwriting projects through the Capacity Investment Scheme, but it's not building its own renewable energy projects. If we want to deliver an energy system at the pace required for industries to remain internationally competitive then we need to be doing everything we can to support international clean energy investors.

Some will say, 'Won't Australian super funds simply fill the gap left by departing foreign capital? They have so much money under management.' Yes, they do. But, unfortunately, their track record to date shows that they won't fill that gap. Australian super funds have consistently and disappointingly underinvested in domestic clean energy, in large part due to a very conservative risk appetite, which is baked into their regulations. Australian super funds have contributed only 0.8 per cent of investments in renewable energy projects since 2020. They've been hamstrung by the performance test rules, which, to its credit, the government is in the process of fixing, as I've spoken about elsewhere. But given such low levels of investment, even if changes to the performance test help the volume of investments from Australian super funds to double or even triple, it's still going to be far below the 70 per cent that international investors make up. So I will be moving two additional amendments to this bill.

The first amendment will provide additional transitional support for clean energy by resetting the cost base of renewable energy assets when the tax changes come into effect. This means that the new CGT rate would apply only to capital gains accrued from now rather than to all the gains accrued since the project was initiated. This is not full grandfathering. I recognise the government's intent here is to broaden the tax base, and a blanket exemption for existing assets isn't realistic. But this amendment would strike the right balance between respecting commercial decisions that were made legally and in good faith on the basis of existing taxation rules before any investor could have known that these changes were coming with the government's tax policy intent.

This amendment has broad support from investor groups. As the Global Infrastructure Investor Association told Treasury in its submission, 'Introducing a deemed market value cost base reset at a time of commencement would address the government's concerns while preserving Australia's reputation for policy stability.' As EY put in its submission, 'Many investments were priced, financed and held on the explicit understanding that they were not taxable Australian real property. The absence of transitional relief imposes an unfair and retrospective tax burden on genuine commercial decisions made under the law as it stood.' This idea has precedence in our law. It's a sensible change.

I will also be moving a final, further amendment to make it very clear that battery energy storage assets qualify for the concession and that the definition is technology neutral, with flexibility for new clean energy technologies involved in transmission and grid stabilisation. Unfortunately, the government signalled that it's not open to accepting these changes. That's regrettable. It's a missed opportunity, in my opinion, to further accelerate the build-out of clean energy at a time when we need it more than ever.

Finally, I want to register a broad objection to how this legislation has been put before us. The bill bundles eight different schedules together, all of which address different topics: tax adviser misconduct, foreign investment, CGT, national competition policy arrangements, DGR listings and so much more. Some of these schedules do really worthwhile things. I won't detail them all here; I don't want to detain the House. I understand the case for legislative efficiencies. No-one wants a parliament clogged up with dozens of small technical bills when they could just sensibly group them all together. But in some cases, as here, it makes it really hard for the parliament to hold the government to account when we're being asked to deal with legislation that's so varied all at once. It would be great to see these consequential changes split off from the rest of the bill so they can be properly scrutinised.

I want to end by saying that I support the intention of these changes. Foreign investors should pay their fair share. Until today, the bill risked dealing a very large blow to investment that we need to deliver cheap, secure energy that's going to set us up for long-term prosperity. It simply didn't make sense for the government, in one breath, to express support for cheap, clean energy and simultaneously to make it harder for investors to build the wind farms, the solar farms and the battery energy storage that are going to make this economy cheap and clean. I commend the government's willingness to extend the transitional period to 2040 and I urge it to continue doing everything it can to support the clean energy that we need and make our economy as competitive as possible so households can have the cheapest possible energy for their livelihoods.

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

On a day where we have crossed the $1 trillion public debt threshold, on a day when we have seen unemployment rise, we have a government that is not focused on improving the economic welfare of the Australian people. We have a government that is only interested in setting up the rules to favour their mates. We heard from members in this chamber only just now about how terrible it is that the rules aren't rigged enough in favour of their mates and not in favour of their donors rather than being concerned about the impact it is going to have on the Australian people.

The member for Monash correctly interjects and outlines just how dodgy the rules—

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

The member should be heard in silence.

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

That's cute, Deputy Speaker! However, the member for Monash always has something of value to add to this conversation, and so we welcome her interjection, it being correct, because she is highlighting and reinforcing the central point.

The Australian people need a government that's on their side. At the moment, they have a government which has only one objective: rigging the rules in favour of their friends. They want to give tax concessions and tax benefits to the renewable energy industry, because they are the donors to their movement and to other political movements associated with them. They can't deliver on things, like a $275 reduction in power bills, that they promised to the Australian people, so their answer is to use public money and move it over to industry to try to reduce costs for them at the expense of the rest of the economy.

At every point, this government focuses only on how to favour its friends. We saw it yesterday when the Assistant Treasurer went and gave a speech to the National Press Club. Lo and behold, all the benefits, all of the subsidies, all of the assistance, all the rules and all the regulations—where did they all go to? They went to their friends in industry super funds while they left actual financial advisers, self-managed superannuants, people who use retail products and anyone who doesn't sit outside the corrupt Labor ecosystem completely adrift. And now we see this with this bill as well, where they've snuck in what we'll call Easter eggs but, let's face it; could be poison pills, which are taxes, which would be increased on some people while they exempt the industries that they want to prosper and succeed, because it benefits them and they are reinforced by the borrowing that their mates in industry super funds—nudge, nudge, wink, wink—are financing. So they're trying to rig the rules again to favour their mates.

This government has a perverse obsession with how they make sure they get outcomes they want to improve the financial wellbeing of the people associated with them. We know this, of course, because, every time there's a public project that needs public money and it's got the CFMEU involved and they're taking out graft and corruption every step of the way, the Prime Minister opens the chequebook and says, 'How much do you want for that public project' along the way. We've seen this in Victorian's Big Build, the suburban rail loop, a scheme that's known as involved with corruption and organised crime. The federal government continues to pour money into the scheme. It's often funded by debt. Yes, this is a Treasury bill and talking about tax is an incredibly important part of it, because tax is something you raise from the public that then gets spent. So what does the government do? They tax the Australian people. They raise the revenue. They then spend it on public projects, and very often that money has ended up in the hands of organised crime. Even worse than that, we've seen today that the government continues to issue bonds, raise public debt, pass the cost on to future generations and then spend it today.

They stoke inflation, then tax inflation, then spend the inflation in a vicious cycle so the government can keep taking more and more tax revenue silently, without having to change a single law before this country. What we have now is a government run by inflation addicts, inflation junkies. They're tapping their veins trying to find out where they can inject the next round of inflation. We've got the Prime Minister walking down to the Treasury building and looking to see if there are a couple of shoes hanging from the powerlines ahead, looking to see whether there is any more inflation they can inject into the system that is undermining the Australian people.

And what are we seeing? On average, Australians going backwards $1,600 a year in the life of this government. This government is addicted to spending, and it's addicted to inflation. Any pathway where they can find more money they can take from the Australian people to feed that addiction, to empower themselves, is part of the perpetual cycle that they run. They're not focused on how to grow the economy. They're not focused on how to build industry. They're not even focused on how to create jobs. Do you remember, once the Labor Party focused on how they create the number of jobs in the economy?

Unemployment is up. Inflation is up. While cost of living continues to rise, standards of living are going backwards under this government. This is the problem—

We're now hearing the interjections. We heard from the last deputy speaker that no interjections should be welcomed, but we're hearing it now from the Labor Party because it's touching a very raw nerve. They know the inflation addiction that this government has directly undermines the economic welfare of the Australian people. Their only answer is how they take a bigger chunk of the Australian tax revenue for themselves, and how they do it—

Carina Garland (Chisholm, Australian Labor Party) | Link to this | Hansard source

The minister, on a point of order?

Andrew Giles (Scullin, Australian Labor Party, Minister for Skills and Training) | Link to this | Hansard source

I think perhaps the speaker could turn to the bill.

Carina Garland (Chisholm, Australian Labor Party) | Link to this | Hansard source

I would remind the member for Goldstein that we are debating a piece of legislation at the moment and remind the member for Goldstein to remain relevant to that task.

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

Deputy Speaker Garland, I can assure you that inflation is directly connected to government spending and taxation revenue. In fact, I'm constantly reminded of it in the number of times I talk about this government's inflation addiction—

Carina Garland (Chisholm, Australian Labor Party) | Link to this | Hansard source

Member for Goldstein, please talk about the bill.

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

I am talking about the bill. I'm constantly reminded in this chamber how members of government seem completely oblivious to the fact that government spending is driving inflation. When government is talking about how you raise the revenue, you can actually talk about how you spend the revenue as well. It's a completely legitimate part of the conversation. I also know how many Labor members get upset and interject every time we talk about their inflation addiction and how it is corroding the living standards of Australians. This bill talks about how it's going to raise revenue, so everything I'm saying about revenue and expenditure is utterly related, just as the government's inflation addiction is relevant to this bill, because that is what is driving it.

What's driving this isn't the best interests of the Australian people or improving their economic welfare. What is driving this bill is: how does the Labor Party control more of the lives of the Australian people? They've found a secret ploy which is, if they tax more, they then use that tax revenue to spend more. They do it by raising debt and then spending that as well. They're able to perpetuate a vicious cycle of stoking inflation, then taxing that inflation, then spending that inflation to take more of the Australian people's money. That's why this government is overseeing the biggest collapse in living standards in the advanced world—not a record to be boastful or proud about. Nothing in this bill seeks to reverse that; it seeks to turbocharge it.

What we have is a government that is always looking for its next inflation hit because it wants to keep the cycle going. It can't stop its addiction. We know from the last federal budget, connected all the way to this bill, which comes in part as a direct result of that federal budget, that they're going to keep finding ways to get a new hit while the Australian people live with the consequences of their inflation addiction.

Time's up for this government. The Australian people are sick of the legacy of their active inflation agenda. They're sick of the ruin and the pain that it is causing. Australians are living it every day through declining living standards—the biggest drop in living standards in the advanced world. Wages have been going backwards by up to $1,600 a year on average since 2022. In every index, in every data point and by every measure, the Australian people are going backwards. Today, not only have we seen a crossover of the $1 trillion public debt threshold; we've seen unemployment rise as well. We need a change of government. We need a government that speaks to the hope and aspiration of the Australian people, not more tax rises and the inflation addiction that we're seeing under the Albanese Labor government.

Sophie Scamps (Mackellar, Independent) | Link to this | Hansard source

I rise to speak on Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026. At the outset, let me say I support the measures contained in schedule 1, which strengthen the integrity and accountability of the tax practitioner regime. I also support the reforms in schedules 4 and 5, which improve Australia's competition framework and give effect to nationally agreed competition principles. I want to focus my remarks today, however, on schedules 2 and 3. These schedules deal with the foreign residents capital gains tax regime, in particular the implications of those changes for investments in Australia's renewable energy sector.

Schedule 2 broadens the foreign resident capital gains tax regime to ensure gains from assets connected to Australia's land and natural resources are appropriately taxed, and I support the intent of these changes in principle. It is entirely reasonable that foreign investors pay tax on gains derived from assets that draw their value from Australia's land and natural resources. That has long been a principle of our tax system, and it is consistent with international practice. I also accept the need for greater clarity in the law. The government has identified uncertainty around the treatment of assets attached to land, and resolving that ambiguity will help create a more consistent and predictable tax framework.

But, while I support the objective, we must also be mindful of the consequences. The definition of 'real property' being legislated captures a broad range of land connected assets, including wind turbines, solar installations and battery storage projects. In practical terms, that changes the tax treatment of many renewable energy investments. At a time when Australia is seeking to attract enormous amounts of private capital to fund the energy transition, we need to ensure that sensible tax reforms do not inadvertently discourage the very investment we are relying upon to deliver affordable, reliable and cleaner energy and do not unfairly punish investments made in good faith based on the rules of the day.

That brings me to schedule 3. The bill provides transitional relief through a 50 per cent capital gains tax discount for eligible foreign investors in renewable energy projects. The discount applies to both direct and indirect investments and covers assets such as wind farms, solar farms and battery storage facilities. That relief is very welcome. However, as originally drafted, the concession was due to sunset on 30 June 2030—a very short transitional window. I did not believe that was sufficient. The message from the clean energy and investment sectors has been clear and consistent: a four-year transition period created significant uncertainty and risked undermining future investment decisions. Stakeholders also warned that the original 2030 deadline risked distorting market behaviour, creating pressure for the premature disposal of assets and potentially driving capital away from Australia altogether. That would not be in our national interest.

The reality is that international investors continue to provide a substantial proportion of the capital required for utility-scale renewable energy projects in Australia. While I would certainly welcome greater participation by domestic investors, we cannot ignore the important role international capital currently plays in building the generation and storage assets our energy system, quite frankly, needs. If we make Australia a less attractive destination for that investment, the consequences will ultimately be felt by Australian households and businesses. Less investment means fewer projects. Fewer projects mean less competition in the domestic electricity market, and that risks higher power prices and reduced energy security at a time when Australians can least afford it.

I'm pleased that the government has engaged constructively on this issue and intends to move an amendment extending the transitional arrangements to 2040, similar to what I proposed in the amendment that I circulated but have since withdrawn. A 2040 end date better reflects the realities of renewable energy investment and that these projects are often planned, financed, constructed and operated over periods of 10 to 15 years or more. The amended timeframe provides a more credible transition pathway and gives investors greater certainty while still allowing the government to implement its broader policy intent.

I want to thank the Assistant Treasurer for his willingness to listen to industry concerns and engage constructively on this matter. While some of the concerns remain, particularly regarding the retrospective impact of these changes on investments already made, the extension to 2040 is a significant improvement and an important step forward towards preserving Australia's attractiveness as a destination for long-term clean energy investment. For those reasons and noting the improvements the government has agreed to make, I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.