Andrew McLachlan (SA, Liberal Party) | Hansard source

I rise to speak on the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. This legislation does not find favour with the Liberal Party—it may come as a surprise to you, Acting Deputy President!—for a variety of reasons. I appreciate the calls from the other side of the aisle to hear my wisdom on these bills.

My concern with the approach of the government is that it does not sufficiently appreciate reward for risk, and that ultimately drives any economy. We need to give those who take risk in our economy—those who risk everything, including their financial future---an appropriate reward. So the debate over this legislation is largely a rejection by the Liberal Party of a philosophy of redistribution. Rather, we take the view that we should reward aspiration appropriately to increase our productivity and, as a consequence, grow the pie and make all wealthy and share that wealth equally.

This was put more articulately than I am putting it today by Mr Geoff Wilson in a submission to the Senate Economics Legislation Committee:

If we make productive investment less attractive, we should not be surprised if we get less of it. The economic consequences of these changes are straightforward. When you tax the returns on risk-bearing capital more heavily, fewer people take risk. Fewer risks taken means fewer companies built, fewer jobs created and a smaller productive economy.

Capital is mobile. If Australia becomes a less attractive place to invest, capital will flow elsewhere. Australia needs more entrepreneurship and more innovation, not less.

I appreciate that the government has indicated that it's carving out for innovation, but for all Australians, no matter what their endeavours, if they take risk, our tax system should say, 'Yes, you can be well and truly rewarded.' I think that if this legislation passes then it will have an impact on our productivity. From my perspective, I want Australia to be one of the most innovative countries in the world and meet every Australian's aspirations. Those are the risk takers we should reward. We should not only reward them but celebrate them, and I'm not sure that this legislation, when it passes the Senate and the other place on its return there, will do so. I note the comments of my fellow senator Senator David Pocock in relation to the definition of 'innovation'. I don't necessarily wish to repeat that, but I think creating boundaries or definitions around innovation and what is in or out just makes the tax acts as a collective far more complicated.

I also draw on the comments of Senator Canavan about the complexity of this legislation. This growing complexity really is a retreat, and it has been a long retreat, under many governments, from the principle that our legislation should be read by the average person or the average Australian industry. We've abandoned that principle and, again, we lay on more and more complexity. If you're a small business, you need a coterie of advisers before even working on the idea that you've had to create wealth for you, your family and your community. We should reflect on that in this place that if you cannot simply understand the bill which is before you—I have an unfair advantage in some ways, having come from financial services and a long career in the law, and even I find it extremely complicated—do we really want Australians spending more and more money on advisers rather than investing in their own businesses?

I also note the comments of Andrew Irvine, the National Australia Bank's CEO, who makes a very good point about rejecting or pushing back on the distinction between taxing on wealth and on labour, and points out that we should be focusing on the distinction between taxing passive assets and risk assets. Passive assets do not necessarily produce the same return. We don't want all our collective wealth going into passive assets; we want them going into risk assets, particularly if we are going to address the challenge of climate change. I want our country to produce the solutions for the world for the future, not to adopt the technologies from other countries. I don't commend the bill to the chamber.