Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

TREASURY LAWS AMENDMENT (TAX REFORM NO. 1) BILL 2026

I move that this Bill be now read a second time.

Today we are proud to introduce the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026.

Speaker, this is a Bill for workers, first home buyers and future generations.

It is the first step in the most ambitious tax reform package for a quarter of a century.

It will help ensure aspiration and opportunity are the birthright of every Australian, not just some.

This Bill delivers on three objectives.

It cuts taxes for every Australian worker—again, and again.

It makes it easier for people to buy their first home.

And it better aligns the tax treatment of labour income and asset income.

The Bill has four core elements:

Speaker, this Bill delivers even more tax relief for workers.

The Working Australians Tax Offset will provide a permanent tax offset of up to $250 every year for over 13 million Australians, from the 2027-28 financial year.

This is responsible tax relief, targeted to working people.

It means more money in the pockets of our nurses and teachers, tradies and truckies and other Australians who earn salaries and wages.

It represents the most meaningful, permanent increase to the effective tax-free threshold since Labor last increased it more than a decade ago.

The Bill also delivers on our commitment to introduce a $1,000 instant tax deduction from the 2026-27 year.

Not only will this make tax time simpler for millions of workers, it will put cash back into their pockets as well.

Around 6.2 million people will benefit, with the average worker receiving an extra $205 at tax time.

More than a quarter of those who will benefit are under 30, and more than half are women.

People claiming more than $1,000 in work-related deductions still can, and anyone claiming other non-work-related deductions will be able to do so on top of the instant deduction.

This includes charitable donations, superannuation contributions, union and professional association membership fees, and income protection, sickness and accident insurance premiums.

The Working Australians Tax Offset is set out in Schedule 3 to the Bill, and the $1,000 instant tax deduction is set out in Schedule 4.

This is more relief from a Government which cuts income taxes whenever it responsibly can.

We are now cutting income tax five times, in three different ways.

We have already delivered tax cuts to every single Australian taxpayer, by bringing rates down and pushing thresholds up.

Another tax cut will commence on 1 July in just over a month's time, and again on 1 July next year.

Together with the new tax relief in this Bill, the average Australian worker will receive a combined benefit of up to $2,816 in 2028.

Our tax cuts have been opposed before and should not be opposed again.

Speaker, we are cutting taxes for workers and making it easier to buy a first home.

For too long, too many Australians have been locked out of the housing market.

We have an ambitious housing agenda and supply is still our primary focus.

But it has become increasingly clear that it cannot be our only focus.

After more than two decades of a distorted tax system, property prices have far outstripped wage growth.

Following policy mistakes made a quarter of a century ago, home ownership has been pushed further and further out of reach, especially for young Australians.

We hear a lot about helping people get on the property ladder, but there's no point having a ladder if the first few rungs are missing.

For too long, governments have turned a blind eye to a broken status quo.

A status quo that is unfair for people and unproductive for our economy.

We are not just acknowledging this, we are acting to fix it.

This Bill limits negative gearing on properties purchased after Budget night to new builds, and returns the capital gains tax to its original intent.

Our reforms will mean 75,000 more homeowners entering the housing market over the next decade, reversing a decade of decline in home ownership rates.

Schedule 1 to the Bill amends the Income Tax Assessment Act 1997 and related legislation to replace the 50 per cent CGT discount for individuals, trusts and partnerships with cost base indexation and a 30 per cent minimum tax rate on capital gains accruing from 1 July 2027.

Under the changes, investors will index the cost base of their assets in line with inflation, so they only pay tax on their above-inflation profit.

The changes will apply prospectively, with the 50 per cent CGT discount applying to gains accruing up until 1 July 2027, while indexation will apply to gains accruing thereafter.

Not everyone will pay more tax under these changes, some will pay less. It will depend on a range of factors, like rates of return, inflation and the holding period.

Someone who invested in the Australian share market and received the average return would have done the about same or possibly better under indexation over the past 10 or 20 years.

This is all about removing the distortions in the system that have warped our housing market and coincided with decades of low productivity growth.

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

Encouraging investment to follow economic returns, not tax advantages, will support productivity over time.

In addition to indexation, a minimum tax rate of 30 per cent will apply to real capital gains accruing from 1 July 2027.

The minimum tax reduces the incentive to defer realising capital gains until marginal tax rates are low, and better aligns the tax rate on gains with the tax rates paid by most workers.

Recipients of certain government payments, such as the Age Pension and JobSeeker, will be exempted from the minimum tax.

These changes will apply to all CGT assets, including pre-1985 CGT assets, held by individuals, partnerships and trusts for at least 12 months.

In line with our goal of supporting new housing supply, investors who buy new builds will be able to choose either the 50 per cent CGT discount or indexation and the minimum tax when they sell the property.

The existing CGT discount of up to 60 per cent applying to qualifying affordable housing will be fully retained to preserve incentives to invest in those assets.

And importantly, the four existing small business CGT concessions will remain in place, allowing eligible small businesses to reduce or completely remove tax on any gains when they sell.

Schedule 2 to the Bill amends the Income Tax Assessment Act 1997 to limit negative gearing for residential property investments to new builds and key Government housing priorities.

From the 2027-28 income year, losses related to existing residential investment properties purchased after 7:30pm AEST, 12 May 2026 will only be deductible against other income from residential properties, including capital gains.

Excess losses can be carried forward to offset residential property income in future years, so investors can continue to claim a deduction in the future for costs such as maintenance.

These changes will only apply to residential property held by individuals, partnerships, companies and most trusts.

Commercial property and other asset classes, such as shares, will remain subject to existing arrangements.

Widely held trusts and superannuation funds (including SMSFs) will be excluded.

Investors can continue to use negative gearing on new builds, ensuring the benefits of negative gearing are directed to investments that support growth in Australia's housing stock.

Negative gearing will continue to support those residential properties which genuinely add to supply, such as dwellings constructed on vacant land, or where existing properties are demolished and replaced with a greater number of dwellings.

Properties held at announcement will be allowed to be negatively geared in future years until sold. This ensures that taxpayers who made investment decisions under the existing rules will not be affected by the changes.

Investors that support Government housing priorities will be exempt from the changes. This will include build-to-rent developments and dwellings provided as social or affordable housing.

Speaker, we are presenting these elements in one Bill not just because they are related, but because one part helps fund the other.

This is the first tranche of legislation to implement the very significant tax reform package announced in the Budget. There will be further legislation on specific implementation details and other parts of our tax reform package.

Legislating significant reforms in tranches is a standard approach, consistent with how other governments have undertaken tax reform, and it is appropriate to ensure the core policy features that apply broadly to most taxpayers are in place first.

This provides certainty to taxpayers and the market, while enabling further consideration and consultation on subsequent tranches of legislation dealing with more complex or specific policy issues.

As outlined in the Budget, the Government is consulting with stakeholders on the treatment of capital gains of small and start-up businesses where indexation is applied to a low or zero cost base.

Further consideration will also be given to a range of specific details such as interactions with attribution managed investment trusts (AMITs), tax consolidation, residency changes, along with any other relevant issues.

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

Speaker, we know that these changes are contentious.

We have seen dishonest scare campaigns and deliberate distortions of the truth.

But the facts matter and I want them to be clear.

Firstly, we are not introducing a tax on inheritances or inherited assets.

Secondly, people will still have their capital gains tax reduced under the new system, with the reduction now accurately reflecting inflation.

Thirdly, the vast majority of small businesses and farms in this country will remain eligible for generous CGT concessions.

This means the overwhelming majority of small businesses can pay reduced or no capital gains tax when they sell.

These are the facts.

It's also a fact that this Bill presents a choice.

A choice between cutting income taxes for Australian workers, or keeping them higher.

Standing with first home buyers, or locking more Australians out of the market.

Taking intergenerational responsibilities seriously, or defending a broken system that fails future generations.

Mr Speaker, we are proud to stand with workers and first home buyers.

We are proud to make the tax system fairer for the next generation.

This is about making a difference, not just marking time.

It's about taking the hard road of reform not the path of least resistance.

It's about making the right decisions, even when they are politically contentious.

It's about making difficult decisions, and dealing with issues neglected for too long, even when it would be easier to do nothing at all.

Most of all, Speaker, it's all about cutting taxes for workers, making it easier to buy a first home, and better aligning the tax treatment of labour and asset income.

That's why I commend the Bill to the Chamber.

_____

INCOME TAX RATES AMENDMENT (TAX REFORM NO. 1) BILL 2026

I move that the Bill be now read a second time.

Speaker, for all of the reasons I have just outlined, I commend this Bill to the Chamber.

Full details of the measure are contained in the Explanatory Memorandum.

Claire Chandler (Tasmania, Liberal Party, Shadow Minister for the Public Service) | Link to this | Hansard source

I rise to speak on both the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. For the sake of this speech, I will refer to those two bills as the tax reform bills. In this bundle of bills, schedule 1 introduces changes to the capital gains tax regime; schedule 2 introduces changes to the negative gearing regime; schedule 3 introduces the working Australians tax offset or the WATO, schedule 4 introduces the $1,000 standard deduction for work-related expenses. I recognise that I have already made a contribution in the debate on these bills here this afternoon. It was so nice that I think I'll do it twice. In simple words, just to reiterate, let's be very clear: these bills are not a simple reform package. This is not a simplification exercise. It is not a reduction in the tax burden. In fact, it is a tax increase, and, for that reason, the coalition cannot support these bills in their current form.

The coalition opposes schedule 1 and schedule 2 in relation to both the capital gains tax and negative gearing regime changes. We support schedule 3 in relation to the WATO and schedule 4 in relation to the $1,000 standard deduction because the coalition always supports lower taxes. We are calling on the government to immediately pass laws to end bracket creep and to implement a tax-back guarantee by indexing the personal income tax brackets to inflation, starting with the first two tax brackets in 2028-29 and the remaining tax brackets from 2031-32. We also note that this policy would deliver lower income taxes permanently to all Australians and would ensure that income taxes cannot rise without the passage of new laws.

But sadly, the 'tax reform bills' that this government has brought on here today do nothing to actually deliver lower income taxes in perpetuity to Australians. Let me explain why. First, I'd like to deal with the most basic point in relation to these bills. This package raises more revenue. It has been confirmed through a Senate inquiry process that schedule 1 and schedule 2 will deliver a net tax increase, and that means something very simple. It means that the government is collecting more money and that Australians have less money in their back pockets. I think we need to be very honest about this. Let's not pretend that these tax bills are just tinkering around the edges or just tidying up existing arrangements that are in place. These bills mean higher taxes, and the only reason that the government are doing this is because they have a spending problem that they can't get under control.

The second point I want to make is that these bills don't fix the underlying problems in our tax system. We already rely heavily on income tax in this country. That has been acknowledged for many years, including in evidence to the committee inquiry that we heard last week. If you were a government that was serious about tax reform, you would look at how to reduce pressure on income tax and how to make the system more balanced for Australians. But that is not what the government are doing here. What they are doing instead is leaving the overall structure largely as it is and layering new taxes and rules on top of that, frankly, like I say, in a desperate cash grab from hardworking Australians because they can't get their government spending problem under control.

The third point I want to make is important. These bills will make the tax system more complicated. They will not make it less complicated, and I think that's something that people outside of this place genuinely care about. What the Labor government is introducing here is not straightforward. We heard extensive evidence before the Senate committee inquiry to that extent. We have a new indexation system for capital gains. We have a 30 per cent minimum tax rate. We have different treatment depending on when gains are made. We have grandfathering rules. We have a whole range of details that are still to come through legislative instruments. Indeed, we had changes to this legislation foreshadowed by the government only in the last few days. The Senate committee inquiry made clear that taxpayers are going to be dealing with two systems running side-by-side during the transition. Now, what does that mean in real life for Australians out there? It means spending more time trying to figure out exactly what these changes mean—goodness me, I wish that this chamber had more time to figure out exactly what these changes mean—it means more reliance on accountants, it means more room for mistakes and it means more costs.

We asked Treasury during the committee inquiry whether they had assessed the compliance cost of the changes in these tax bills, and they said it was about $80 million. But, when we asked the experts—the accountants, the financial advisers and the financial planners—how much they thought Australian businesses and individuals would be lumped with as a result of these tax changes, the experts at the committee, the people actually at the coalface figuring out how these changes are going to impact their clients, estimated the cost to be almost 10 times that. It puzzles me that the government has brought forward a piece of legislation where there is such a huge disparity between what they say the impact on Australians and the compliance cost are going to be and what the industry that will have the job of implementing these changes is actually saying. That's not simplifying the system; that's making it harder. If we're spending $800 million trying to figure out exactly what these changes mean for small businesses and for individuals with investments, that's not simplification.

Fourthly, I want to talk about the impact that these changes will have on investment, because that is what really matters. In the weeks following the budget, the shadow treasurer, Tim Wilson, and I spent a lot of time speaking with small businesses, working alongside them and trying to figure out exactly what these changes mean. As I said, through the committee inquiry process and indeed through Senate estimates, it's all a bit as clear as mud at the moment. What small businesses are saying right now is that they want to be able to take risks, to start businesses, to grow their existing businesses and to be in a position to invest in new opportunities. To be able to do all of that, they're just asking for some fairness and some certainty around what the rules are. You cannot say that Australian businesses have had certainty around the environment that they are operating in when this government went to an election just over 12 months ago promising no changes to capital gains tax and here we are 12 months down the track debating those exact changes in this chamber.

What we have heard through the inquiry is that this bill creates real trade-offs for businesses. It introduces higher effective taxation on capital in some cases, less symmetry between gains and losses, and new uncertainty about how the rules are going to apply. Even the witnesses who supported part of these reforms acknowledged these risks. This isn't a simple story. There are consequences here to these changes that the government has introduced. Some we understand and some I strongly suspect we don't, because the government hasn't afforded us the requisite time nor made officials available who can answer the requisite questions to understand exactly what those impacts are for people who want to invest in our country.

I've alluded to the fifth point I want to make. It is that the process does matter. The process around this legislation has been atrocious. We had a very short Senate committee inquiry. We had two hearings and hundreds of submissions, not all of which Treasury officials, as they admitted during the hearings, have been able to read. They couldn't even tell us how many they had looked at. It wasn't definitively, 'We've been able to read 100 submissions,' or, 'We've read 200 submissions.' They couldn't tell us how many submissions the department had looked at.

We know from the evidence that we heard from witnesses in the Senate inquiry that concerns have been raised across the board about the consultation that the government did or, frankly, didn't go through, about the detail in the legislation and about gaps and drafting errors in the legislation. Yet here we are in this place with one sitting week left to the financial year ending, and we are being asked to pass significant changes when there is still so much uncertainty around exactly what this suite of tax changes will look like. Like I said, over the weekend the government flagged, I assume, amendments to the scheme already that will come before this place. That's before you even consider the fact that there will be further legislation to enable these changes that we will have to consider later down the track.

Policy on the run is policy underdone, and I think we have seen that here. We heard, in the lead-up to the budget, that the Treasurer and the Prime Minister were talking about these changes that would be coming in the budget, and then it got to 12 May. The budget was handed down, and we were all sitting there, in budget lock-up, trying to figure out exactly what these changes meant. Now, we have legislation that is apparently to give effect to these changes, but we have government officials that can't answer basic questions around the changes, around the impact they will have and around the revenue they will bring in for the government. We have experts and business stakeholders within the community raising serious concerns about this legislation. It has just been so completely rushed, and I think that that is incredibly unfair on Australians and on our economy, and I think it is unfair on people in this chamber to expect us to consider this legislation fulsomely when we haven't been given the opportunity to do so.

This is a real missed opportunity for the government. As I said in my initial comments, there was more that could have been done here. If the government were truly genuine about reforming taxation in this country, particularly reforming income taxation in this country, there are some things that they could have done better. They could have brought forward a reform that simplifies the taxation system, that strengthens the economy and that actually leaves people better off, but this package simply does not meet that standard, for the reasons that I have outlined. It is complicated. It is costly. We don't know the full extent of it, and, frankly, it's not going to leave Australians better off. By the government's own admission, 35,000 fewer houses will be built under these tax reforms. That is written in their own budget papers. I said the Treasurer and the Prime Minister spent all this time before the budget foreshadowing what was going to be in it and foreshadowing that it was going to reset intergenerational inequity and that it was going to make it easier for young Australians to buy a house, but their own budget papers prove that 35,000 fewer houses will be built.

What could the government have done? I will be moving a second reading amendment to this legislation which will call on the government to immediately pass laws to end bracket creep and implement a tax-back guarantee by indexing personal income tax brackets to inflation, starting with the first two brackets in 2028-29 and for the remaining tax brackets from 2031-32. I note that this policy, which is a coalition policy, will deliver lower income taxes permanently to all Australians and ensure that income taxes cannot rise without the passage of new laws. This is a genuine reform and a clear alternative to what this government has proposed here today, and, for the clarity of the chamber, I move:

Omit all words after "That", substitute "the Senate:

(a) calls on the Government to immediately pass laws to end bracket creep and implement a Tax Back Guarantee, by indexing the personal income tax brackets to inflation starting with the first two tax brackets in 2028-29, and the remaining tax brackets from 2031-32; and

(b) notes this will deliver lower income taxes, permanently, to all Australians and ensure that income taxes cannot rise without the passage of new laws".

This amendment will give effect to this change.

As I've said, these tax reform bills are barely tax reform. To suggest that these changes alone are going to fix housing affordability in this country is frankly false, and it is not one that is supported by the evidence that is in the budget or that has been provided to the Senate committee. This is not a simplification exercise. This is not a reduction in the overall tax burden. It is a tax increase. For these reasons, as I have said, the opposition simply cannot support schedule 1 and schedule 2 of the Treasury Laws Amendment (Tax Reform No. 1) Bill, and we will not be supporting the Income Tax Rates Amendment (Tax Reform No. 1) Bill. Australians expect better than this. They expect reform that makes the system simpler not harder, that grows the economy, that doesn't add uncertainty and that leaves them better off not worse off. This bill does none of these things.

Lisa Darmanin (Victoria, Australian Labor Party) | Link to this | Hansard source

In summary, what this bill does deliver is a new round of tax cuts, helping homeownership and supporting investment and innovation through the most significant tax reform in a quarter of a century. More broadly, let me be clear on what we're really talking about here today. What we're talking about is the kind of country that we want to be. Tax, capital gains and negative gearing might sound technical, but what we are really talking about is housing and whether people have a fair shot at owning their own home. A home is not simply an asset on the balance sheet; a home is security and stability. It's the place where children do their homework around the kitchen table. It is where families build a future. It is where communities are formed and lifelong friendships made. It is where people put down roots.

For previous generations of Australians, owning a home was not an impossible dream; it was an achievable milestone. People worked hard, saved and expected that one day they would be able to buy a place of their own. Labor believes that access to secure and affordable housing must always be one of our nation's fundamental goals. A safe and secure place to live and call home is not a big ask. How have we gotten to a place in Australia where housing has shifted from being a place to call home to being a vehicle for wealth accumulation?

Well, 26 years ago, the Howard government introduced the capital gains tax 50 per cent discount, which, when combined with negative gearing, turned the housing market from a place to buy a home to live in to a market for speculators to use to build wealth. Those settings fundamentally changed the incentives within our housing market. They shaped incentives which increasingly favoured investment in existing housing over homeownership itself for a quarter of a century. The result is that today we face a housing system that too often rewards speculation over aspiration.

I want to thank everyone who submitted and gave evidence to the Senate inquiry into this legislation, which I chaired last week. I completely disagree with and reject any assertion that the process was a sham. I think that those opposite are seeking to characterise the process in that way simply because they do not support the reforms contained within the recommendations.

What did we hear in the inquiry last week? We heard that, in the 26 years before the introduction of a capital gains tax discount, dwelling prices grew broadly in line with household incomes, and, in the 26 years since, average dwelling prices have increased at more than twice the rate of household incomes. The value of residential land and dwellings increased by more than 700 per cent between June 1999 and June 2025, while inflation increased by around 100 per cent. Over that same period, wages have simply not kept pace, meaning the cost of homeownership has become increasingly out of reach for working Australians.

The inquiry heard evidence that homeownership rates have steadily declined since 2001 across almost every age group. Most strikingly, Australians aged between 25 and 34 now have homeownership rates comparable to those experienced in the 1940s and 50s. The ACTU put it like this:

… young people have lost nearly a century of progress and are now well below a 50 per cent home ownership rate.

Let's think about what that means. It means an entire generation finding it harder than their parents and grandparents did to achieve something that was once regarded as a normal part of Australian life. It means an entire generation worse off than the one that came before them. When that happens, we should ask ourselves: is the system working as intended or is the system producing outcomes that demand reform? The evidence was overwhelming. The current arrangements are no longer working. Instead, by contributing to housing affordability pressures, they are exacerbating wealth inequality and intergenerational disadvantage. They are concentrating wealth amongst those who already own assets and making it harder for young Australians to get a foothold in the housing market.

Eighty-two per cent of the benefits of the capital gains tax discount accrue to the top 10 per cent of income earners. Think of the inverse of that: 12 per cent of the benefits of the capital gains tax discount go to the other 90 per cent. When negative gearing and capital gains tax discounts are combined, the highest 10 per cent of income earners receive tax benefits measured in billions of dollars each year. These concessions aren't helping the next generation get a leg up; they are overwhelmingly concentrated amongst those who already hold substantial assets and wealth, and it's costing you, the taxpayer.

The Parliamentary Budget Office estimates that more than $38 billion in revenue has been foregone through capital gains tax concessions since 2010. Evidence before the inquiry estimated the annual revenue cost of existing concessions at more than $21 billion. That raises a fundamental question about fairness. Graeme Samuel said at our inquiry last week:

Frankly, as a PAYG taxpayer, I'm sick to death of feather bedding those vested interests that have proved to be powerful under previous governments …

What exactly are we rewarding under the current capital gains tax arrangements? Workers cannot defer their wages until it's more convenient for tax-planning purposes. Working Australians pay tax every fortnight. They cannot choose the timing, they cannot choose the structure, they cannot choose the vehicle—but those with significant assets can. That is not a tax system that treats work and wealth equally; it's a system that says workers don't take risks when they go out every day, slogging it out, but gambling on an investment is a risk worthy of a safety net and a generous tax break. That is why reform is necessary. A nurse should not face a higher effective tax rate than someone whose income is primarily derived from appreciating assets. A teacher or a garbage collector should not be carrying a greater share of the nation's tax burden than someone benefiting from highly concessional treatment of capital gains.

A fair tax system cannot continue to favour wealth over work, and it cannot continue to ask younger Australians to shoulder a growing share of the burden while locking them out of the opportunities enjoyed by previous generations. I've heard the claims that these reforms disadvantage young Australians, but the evidence that we heard last week shows that they simply don't stack up. Personally, I'd be sceptical about who is offering up this argument and why.

Most Australians earn their income from work, not capital gains. Only around four per cent report a capital gain in any one year, while 84 per cent derive the vast majority of their income from labour. They are not the main beneficiaries of the current system, but they are bearing its costs. Our reforms have three clear objectives: first, to create a fairer balance between the taxation of income earned through work and income earned through capital gains; second, to help more Australians achieve homeownership; and, third, to improve productivity by directing investment towards more productive uses across the economy.

Turning to some of the detail of the legislation now, schedules 1 and 2 implement the government's reforms to capital gains tax and negative gearing. The current 50 per cent CGT discount will be replaced with a system of cost-base indexation. This ensures that inflation is recognised while making sure real capital gains are appropriately taxed. Alongside this, a 30 per cent minimum tax on net capital gains strengthens the integrity of the system and ensures that those gains make a fair contribution to revenue.

Negative gearing will be better targeted. It will be limited to newly constructed homes, with losses from existing properties purchased after 12 May 2026 no longer deductible against wages and salaries. Instead, those losses can be carried forward and offset against future investment income.

Importantly, the legislation maintains existing CGT concessions for small businesses. It also supports investment through a permanent $20,000 instant asset write-off for eligible small businesses and introduces a two-year loss carry-back for companies with turnover under a billion dollars.

In direct response to the deep engagement held with stakeholders across the sector, the government is also moving targeted amendments to provide certainty to investors, more support for small businesses and more incentives for innovation. These amendments include expanding the eligibility of the 50 per cent active asset reduction to more businesses by increasing the turnover threshold from $2 million to $10 million, protecting incentives for charitable giving to maintain tax incentives in relation to charitable giving, clarifying eligibility for exemptions by providing the list of income support payments that qualify for an exemption from the minimum tax on capital gains and embedding the calculation method for the working Australians tax offset in the legislation.

The government has released a consultation paper on the design of the 50 per cent CGT discount for early-stage investors, including founders and employee share scheme participants of innovative startup businesses. The innovative CGT concession will provide individuals, partnerships and trusts holding eligible shares a choice between a 50 per cent discount and indexation in the minimum tax for gains accrued from 1 July 2027.

The government will also amend ministerial discretion in relation to a couple of aspects of the bill, with legislation to be introduced later this year following consultation. Those aspects are around the definition of new builds that are eligible to choose a 50 per cent discount on gains accrued from 1 July 2027 and eligible access to negative gearing for properties purchased after 12 May 2026, consistent with the details outlined in the budget and the definition of types of housing investment exempt from the limits on negative gearing, including affordable housing. These amendments will provide further clarity and confidence to investors and more support for small businesses. Finally, schedule 3 introduces the working Australians tax offset, a $250 non-refundable offset from 2027-28, expected to benefit around 13.3 million workers, including 6.3 million women. Schedule 4 provides a simpler approach to deductions, with a new $1,000 instant deduction for work related expenses from 2026-27.

We have a lot to be proud of as members of the Albanese Labor government, but this legislation is really one of those reforms I am so very proud to be speaking strongly in support of. This is what Labor does. This legislation is at the heart of what Labor stands for. This is ambitious reform, and ambition to achieve fairness is not something to be shied away from. Labor has never been a party that believes that the status quo should be preserved simply because reform is difficult. The values that drive our party remain today and fuel our courage to achieve reform.

We believe that working people should receive a fair return for their efforts. We believe the opportunity should not depend on the wealth of your parents. We believe that every generation deserves the chance to build a secure and prosperous future, and we believe that government has a responsibility to confront problems not to simply manage them. These reforms are ambitious, and they are principled. They ensure the tax system is serving Australia's long-term interests. They ask whether concessions worth billions of dollars are delivering public benefit, and they recognise that a fair economy requires both a strong safety net and a tax system that supports opportunity rather than entrenches disadvantage. The test of a successful society is not on whether those who already have wealth can continue to accumulate it; the test is whether the next generation has the same opportunities and better than the ones before it.

Today, too many young Australians are being denied those opportunities, and these reforms are an important step towards changing that. They are about restoring fairness for workers, they are about rewarding work, they are about making housing more accessible, and they are about ensuring that Australia's tax system serves the interests of the many not just the fortunate few. I urge everybody to support the legislation.

Paul Scarr (Queensland, Liberal Party) | Link to this | Hansard source

We'll move to two-minute statements.