Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) | Link to this | Hansard source

Well, here we go again, with a litany of broken promises, a blatant tax grab worth $77 billion, a two-day inquiry stacked with Labor's friends and sycophants to rubber stamp it. Assurances were made more than 50 times that negative gearing and capital gains would not be touched. What an embarrassing backflip, carving out a few token concessions worth less than half a billion dollars and an out-of-touch lying Labor government intent on remaking Australia in its broken Marxist image.

Karen Grogan (SA, Australian Labor Party) | Link to this | Hansard source

Senator Hanson, I will remind you of your language in this place. It's one thing to run particular language outside of this chamber, but I'll ask you to mind your language in here, please.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) | Link to this | Hansard source

It's not a personal reflection. It's not a personal reflection on anyone.

Karen Grogan (SA, Australian Labor Party) | Link to this | Hansard source

Please continue, Senator Hanson.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) | Link to this | Hansard source

That's the real story of this appalling budget. The Prime Minister has claimed his budget is a response to a rise in populism in Australia. At the economic summit hosted by Sky News and theAustralian this month, he said:

… if people think the economy isn't working for them and they're working their guts out and they're not getting opportunity, I tell you what, they will turn to more simplistic grievance based politics … Because it is real, the frustration that people have out there.

One Nation is not simplistic grievance politics. We have continually put forward policies that the Australian people relate to—policies that will improve the lives of Australians, take them out of poverty and give prosperity back to the people.

The Prime Minister obviously can't read the room. He doesn't know what's happening out there. He's never been in the real world, and neither have a lot of the ministers. When have they ever run a business, had a real job in the real world or understood what it's like? All they've done is get their money from the taxpayer. They've never really had to do it tough. Labor is blind to what Australians are really frustrated about, because Labor does not listen and Labor does not care. Australians have had enough of being lied to. Unfortunately for the government, it's in Labor's DNA.

Australians are constantly told renewables are cheaper. Yesterday in South Australia, with temperatures plummeting and no wind blowing—listen to this—it would have cost $5 to just boil a kettle. Because there was no wind, on a price balance here, they had to cap the cost of electricity, and, at the cap, it would have cost $5 to boil your kettle. That's the future, Australia. That's what we're heading for under these renewables, which this hopeless government keeps pushing on you, all supported by the Greens, this mob over here, this bunch of hypocrites. It is supported by them as well. Australians are constantly told renewables are cheaper, but they're not without the taxpayer government handouts. That's what actually gives you some relief, but don't expect it all the time. They can't; they're running out of money. They haven't got the money anymore to keep giving you these handouts and buying your vote. It puts you in the safe place, but you're not really safe. Anyway, renewables are obviously not cheaper.

It is not only about boiling the kettle. I was visiting a cotton farm near Goondiwindi, and do you know what they said? 'Oh, we get constantly asked to turn off the power. If we turn off the power so that no-one else goes into blackout—households—so they can deliver power, we get paid $150,000.' So this is what's happening. They're actually paying the subsidies for people to stop using the power so the renewables work. Otherwise, they'd all go down in a heap. So you can imagine what's going to happen in this country. We've seen this before. We've had blackouts in the country. Prepare for it. Buy more blankets, will you, please? Out there, you're going to need them and the coats and everything. You're going to need it, especially in wintertime now.

Household electricity costs have risen more than 200 per cent since large-scale renewables were first mandated. Around 337,000 Australian households can no longer afford their energy bills. Let me repeat that: around 337,000 Australian households can no longer afford their energy bills, let alone the businesses. They're shutting up shop. Let me remind you: 50,000 small businesses insolvent. Why? Because they can't afford their power bills. Industries and manufacturing are shutting down. Why? Because of the power bills. They're going overseas.

On top of that—oh, who's that aluminium smelter? Tomago—that's right—in New South Wales. Guess what: they gave them $1 billion to pay for their power, but the Australian people—forget about that. Forget about every other small business. They're terrified of losing Tomago from New South Wales, so they say, 'Let's give them a billion dollars in funding.' Oh, this is great! This is good economics of running this country! I just absolutely love it!

Then you've got Labor's obsession with net zero, which is evidently a major cause of Australia's cost-of-living crisis. But there's nothing in this budget which shows Labor cares about this impact. Australians are waking up to the scam. It is a scam. They don't believe this lie anymore. All they want is affordable and reliable electricity like we had before the major parties started spending uncounted billions of taxpayer dollars covering regional Australia in renewables. All they want is a fair go and a chance to get ahead, to own a home and to invest in their future prosperity just like their parents and grandparents could. Many Australians no longer believe they have this sort of future. This budget confirms Labor has every intention of taking this future away from them.

This budget intentionally kills aspiration. It seeks only to entrench mediocrity. It's classic Marxism. It doesn't make everyone equally rich; it makes everyone equally poor, except of course the ruling class. Having benefited immensely from negative gearing and capital gains tax discounts, Labor ministers are now pulling up the ladder behind them. They're alright. As we've heard, the Prime Minister's got his housing investments. I think it's a conflict of interest. I really do. He knew what was coming. He knew the laws were going to be changed. So he sold his investment properties and secured himself his house at $4.3 million. That's alright. And now they've brought in the negative gearing to stop other Australians with aspiration from owning their own homes. That's wonderful. That's fantastic, Prime Minister.

As I said, my Fire the Liar campaign is spot on. Australians aren't stupid, and slowly they're waking up. It's taken them some time. I wish they'd wake up a lot faster over this scam, the renewables, because they're really paying for it. But they know what's going on. They're starting to realise. They see the direct connection between government policy and their declining living standards. It's not grievance which is driving support away from the major parties and it's not social media algorithms, no matter how much the Marxist Greens wish that were the case. They want that to be the case, but it's not. It's the simple recognition by everyday Australians that they've been lied to all these years. This is changing Australia's political landscape. The political establishment is still using the map for the old landscape, and it's getting lost in the wilderness. One Nation makes no apology for successfully navigating this new landscape. We make no apology for listening to Australians and telling them the truth.

Businesses are collapsing at record rates. Around 50,000 businesses have become insolvent since Labor took office. Productivity is at its lowest in almost 60 years, especially in the bloated Public Service. Guess how much the Public Service has gone up under this government? It's gone up by 50,000. It's gone up from approximately 176,000 to 216,000 during this government. Who's paying for that? The taxpayers. My God, why do you need that many public servants? Oh, that's right—you've put in more regulations and restrictions over the people to control them. So you need all these people to now control the people more. Wonderful move, Labor! It's an absolutely fantastic move. You're really helping the Australian people out there.

Business confidence and domestic investment have fallen to lows not seen since Paul Keating's recession of the 1990s. Our inflation is the highest in the developed world, thanks mostly to out-of-control government spending. Australian families have endured 15 interest rate hikes, pushing more than a million households into mortgage stress. GDP per capita has fallen in 10 of the last 15 quarters. Budget deficits will balloon by another $100 billion over the forward estimates. Interest bearing debt will climb another $300 billion to about $1.3 trillion. So much for intergenerational equity. This budget only creates intergenerational poverty.

The bill we're debating has only been firmly rejected by the majority of Australians. The recent carve-out of concessions is an acknowledgement the policy itself is fundamentally flawed. It should be completely scrapped. Capital gains tax discounts and negative gearing provide the housing so desperately needed by millions of Australians after state governments decimated public housing stock around the nation. They give many Australians the means to remain independent of the need for government handouts. One Nation will never support the changes to capital gains and negative gearing in this bill. One Nation will keep the capital gains discount where it is. We will support negative gearing for up to two investment properties—incentivise people, give them that ability. This captures around 94 per cent of the approximate two million property investors in Australia who own only one or two properties. They're not the greedy property tycoons Labor pretends they are. They're just hardworking Australians who have sacrificed and saved to invest in an independent future. There's no credible reason to tax these people out of investing altogether, but that's what Labor wants.

This budget bill will drive more Australians into the working class poor. Labor hates independence. Labor loves dependence. Labor hates innovation and entrepreneurship. Labor loves to kill off with high taxation, record high energy costs and overregulation. This mob is made up of idiots who have never run a business or had a job not funded by taxpayer or corrupt union bosses. Labor believes it can tax and spend its way out of trouble, never mind the impact of inflation and interest rates. One Nation puts forward a different way, putting the lie to Labor's assertion we have no solutions. We need to cut government's out-of-control spending, which will reduce inflation, alleviate the pressure on the RBA not to increase interest rates. One Nation has identified at least $90 billion in spending cuts. At least a third of it comes from scrapping net zero. We suspect there's a lot more to be saved, because Labor carefully hides a lot of its net zero spending from the Australian people forced to pay for it. We know that a great deal more renewables infrastructure is in the pipeline—infrastructure that will cost taxpayers at least $1.4-plus trillion, another white elephant blow out like the Snowy 2.0. One Nation will scrap both, putting an end to government spending on this net zero obsession will reduce inflation and the cost of living. It will reduce the need for more taxpayer funded handouts dressed up as cost-of-living relief. It's not rocket science or brain surgery. It's basically common sense.

The Greens' deal with the Labor is absolutely disgusting. They are the biggest property holders. They've got theirs. They're passing this because they're grandfathered. They're looked after. They've got their properties. How many properties each are they? I think the most of any one party of everyone else, and yet they're quite happy to see this go through. You think you're looking after future generations. What a joke. (Time expired)

Dean Smith (WA, Liberal Party, Shadow Assistant Minister to the Shadow Treasurer) | Link to this | Hansard source

This bill is presented as tax reform, but it is nothing of the sort. Instead, it is a package of higher taxes built on broken promises, bad economics and a fundamental misunderstanding of how investment creates prosperity. Under this bill, the government has proposed to abolish the longstanding 50 per cent capital gains tax discount for many investors and replace it with an inflation indexation model that could see capital gains taxed at rates up to 47 per cent. It also proposes to restrict negative gearing on rental property to newly built homes. These are not modest adjustments. They are fundamental changes to Australia's investment framework.

Before the election, the Prime Minister repeatedly promised Australians there would be no new taxes. Instead, Australians have been handed higher taxes on investment, higher taxes on housing, higher taxes on enterprise and higher taxes on aspiration. This is a government that cannot manage spending, cannot manage inflation and cannot manage the budget, so it's coming after the savings and investments of ordinary Australians. Rather than growing the economy, Labor has chosen to tax it. Rather than encourage investment, it has chosen to discourage it. That is why this is such bad legislation.

The government claims these changes are about housing affordability and intergenerational fairness, but the housing market is already delivering its verdict. Across Australia's capital cities, auction clearance rates have collapsed below 50 per cent for the first time in six years. More homes are now failing to sell than selling. Buyers are retreating, vendors are losing confidence and investors are sitting on the sidelines. Housing markets run on confidence. Labor's changes to capital gains tax and negative gearing will inject even more uncertainty into an already fragile market. The government's own budget papers acknowledge these changes will result in fewer homes being built. Treasury expects lower house prices than otherwise would occur, while economists warn investor demand could fall sharply and market turnover by as much as 20 per cent. This is not a housing strategy; it is a confidence strategy in reverse. The tragedy is that Labor has completely misdiagnosed the problem. Australia does not have an investor problem; Australia has a housing supply problem. Taxing investors will not build a single extra home. It will simply mean fewer rental properties, less investment and greater pressure on renters already struggling through a cost-of-living crisis.

But the damage does not stop with housing. The evidence before the Senate Economics Legislation Committee made it abundantly clear these changes will reach well beyond the housing market. They will discourage productive investment across the Australian economy, they will weaken small business, they will undermine entrepreneurship, and, for my home state of Western Australia, they threaten one of Australia's greatest economic success stories, the resources sector. Western Australia has been the engine room of the Australian economy for decades. Iron ore, gold, LNG, lithium, rare earths and critical minerals have generated hundreds of billions of dollars in exports, sustained regional communities and funded public services across Australia. Last year alone, Australia's resources sector generated around $383 billion in export earnings. None of that happened by accident. Every operating mine began as an exploration project. Every major discovery began with someone prepared to take a risk. Before there is a mine, there is a geologist, a drill rig, an exploration company with no income or certainty of success, and investors prepared to provide patient capital over many, many years. That is the investment pipeline this legislation now puts at risk. During the Senate inquiry, the Association of Mining and Exploration Companies made one fact abundantly clear: around one in every 1,000 exploration projects becomes an operating mine. Think about that: one in 1,000. That tells us two things: first, that mineral exploration is one of the highest risk investments in the economy; and, second, that investors require an incentive to commit long-term capital.

That is precisely why the capital gains tax discount matters. It recognises risk and it rewards patience. It encourages Australians to back projects that may take 15 years to deliver a return or may never succeed at all. Labor's proposed changes weaken that incentive. Less investment means fewer exploration programs, fewer discoveries, fewer future mines and, ultimately, fewer exports, fewer jobs and lower government revenue. That is not productivity; that is economic self-harm.

Perhaps the most extraordinary aspect of this legislation is the government's inconsistency. Last week, Labor announced a carve-out for eligible technology startups. The government accepted that early-stage, high-risk businesses relying on patient capital deserve special treatment, but it refused to extend that same recognition to junior mineral explorers. Why? Can the government explain? Mineral explorers are the original startups. They are pre-revenue. They rely entirely on patient investment. They create enormous national wealth when successful. The similarities are obvious. The inconsistency is impossible for the government to defend. If innovation deserves support, surely discovering Australia's next generation of critical minerals deserves it as well.

The contradiction becomes even greater when the government's own rhetoric is considered. Labor talks constantly about critical minerals. It talks about future industries. It talks about the energy transition. But none of those ambitions happen without exploration. There can be no new lithium mine, no new rare-earth project and no new copper discovery or critical minerals industry without someone funding exploration today. You cannot be championing critical minerals while taxing the very investment needed to find them. Western Australia has more at stake than anywhere else. Nearly three-quarters of Australia's mineral exploration occurs in Western Australia. Regional contractors, drilling companies, local suppliers, country towns and future mines are all part of the pipeline this legislation now puts at risk.

This legislation follows another damaging decision made by the government. Only 18 months ago, Labor abolished the Junior Minerals Exploration Incentive. Independent analysis showed that every dollar of tax credits generated about $2 of private investment, $6 of exploration expenditure, billions of dollars in future mineral production and hundreds of millions of dollars in additional tax revenue. Labor removed that successful incentive. Now it proposes another measure that the industry says will further discourage investment. It is little wonder that confidence is deteriorating. AMEC told the Senate committee that 75 per cent of retail investors regard the capital gains tax discount as either very important or extremely important when deciding whether or not to invest, and about half of them indicated they would reconsider future investment if the discount disappeared. Those warnings should concern every senator in this chamber. The damage will not appear overnight. Exploration decisions made today determine whether Australia has producing mines 15 years from now. If you get this wrong today, the consequences will be felt for decades. There will be lower exports, fewer regional jobs, weaker economic growth and less government revenue. Those outcomes are entirely avoidable.

Even the Western Australian Labor government appears to recognise this. Premier Roger Cook and Rita Saffioti came to Canberra yesterday, all the way from Perth, to warn the Prime Minister and the Treasurer not to undermine the investment that drives WA's resources sector. The Premier made an important point: exploration companies do not generate income in their early years. They depend on Australians being prepared to invest in high-risk projects while knowing that success may be many years away or may never come at all. This bill weakens that incentive while granting concessions to other high-risk industries and leaves junior mineral explorers way behind. When the WA Labor premier and treasurer are asking the federal Labor government to rethink its own tax policy, the Prime Minister should listen. This legislation taxes risk, it taxes investment, it taxes productivity, it taxes aspiration and it taxes one of Australia's most successful export industries. Whether it is young Australians investing to build a house deposit, a small-business owner building a company or an investor backing the next mineral discovery in Western Australia, Labor's instinct is always the same: tax risk instead of rewarding it.

The same legislation that is weakening confidence in Australia's housing market is now also weakening confidence in Australia's future resources industry. In both cases, Labor is discouraging the investment Australia needs most. That is why the legislation is fundamentally flawed. It will not make Australia more prosperous; it will make Australia less competitive. By contrast, the coalition believes Australians who take risks, build businesses, create jobs and invest in Australia should be encouraged, not punished. The government still has time to correct its mistake. It should listen to the evidence. It should listen to the resources industry. It should listen to Western Australians. It should provide junior mineral explorers with the same carve-out it has already granted to other high-risk, early stage industries. If it refuses to do so, it will tax away the investment needed to discover Australia's next generation of mines and make west Australians poorer for it. That would be a profound economic error.

Acting Deputy President, I foreshadow that I will move a second reading amendment regarding mineral exploration matters.

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

This was a moment that Australian politics could have stepped up and seized. This was a once-in-a-generation political opportunity to absolutely do something meaningful to address the housing crisis that is wracking this nation, and Labor has met this moment in classic Labor form—abject failure to engage in reforms that the housing crisis is demanding.

Labor's lack of ambition and their lack of political courage mean that the housing crisis in this country is going to go for longer than it should do, and it is going to cause more social harm than it needed to. Labor's lack of ambition and their abject failure to seize the moment mean that the housing crisis in Australia is now Labor's housing crisis. They've been in government for four years. They've had every opportunity on multiple occasions to pull the levers that demand pulling to fix this housing crisis and they have abjectly failed to do so. This legislation, the Treasury Laws Amendment (Tax Reform No. 1) Bill and Income Tax Rates Amendment (Tax Reform No. 1) Bill, is a continuation of Labor's failure to do the things that we need to do collectively to fix the housing crisis in this country.

Having said that, taken as a package with the Greens amendments, which will be supported through this Senate, this package constitutes a small step in the right direction. That is why the Greens are going to support it. The capital gains tax discount currently is the most unfair and egregious tax break on the tax books in this country. Sixty per cent of the benefit of the capital gains tax discount goes into the bank accounts of the wealthiest one per cent of people in this country. The one per cent get 60 per cent of the benefit. If you're poor, you get nothing out of the CGT discount, because you are too poor to buy the assets that would allow you to benefit from selling them at a profit later.

But it's not just completely inequitable in terms of favouring the one per cent of the wealthiest and the highest income earners in this country; it is also responsible for driving a chasm between generations in Australia. Seventy-five per cent of the benefit of the capital gains tax discount went to people over 50, and only four per cent of the benefit went to people under 35. You heard Senator Hanson from One Nation up in this chamber earlier defending this unfair tax break and trying to claim that she is doing so on behalf of young people. We call bullshit on that claim. It is—

Maria Kovacic (NSW, Liberal Party, Shadow Assistant Minister for Women) | Link to this | Hansard source

Senator McKim!

Nick McKim (Tasmania, Australian Greens) | Link to this | Hansard source

I withdraw that. We call that claim untrue, because what is unfair to younger Australians is the fact that people under 35 only get four per cent of the benefit of the most generous tax break on the books and older people and wealthier people, who've had multiple opportunities to buy up investment properties or to buy up other assets, get so much of the benefit. That is what is unfair. What is unfair to young people is that an entire generation is being priced out of the housing market in this country. This will not resolve that, but it will take a baby step in the right direction.

Let's be very clear. The current capital gains tax arrangements were opposed by the Australian Greens when they were introduced in 1999, and we have been campaigning against those arrangements ever since. We have been campaigning for a generation against the overly generous capital gains tax discount arrangements. Finally we are getting a small step in the right direction. A lot of that is because we used this parliament, where Labor has a stonking majority in the House, where Labor plus the Greens equals the numbers in the Senate and where the Liberals and the coalition are a rabble, to prosecute yet again the case to repeal the capital gains tax discount.

We used the committee inquiry that we established with a Greens chair to bring in a whole bunch of people and organisations and voices to call time on this unfair tax break. The BCA, the Business Council of Australia, and the CommBank CEO started lining up with ACOSS and housing organisations, paving the way for change through our inquiry. We made clear to the government that we stand ready to take advantage of this once-in-a-political-generation opportunity to fix the housing crisis and actually give young people a fair crack at the great Australian dream of owning their own homes.

What happened? Labor squibbed the opportunity. They abjectly failed to step up and show the courage and ambition that are necessary to resolve the housing crisis. They've done that by prioritising tax breaks for wealthy property investors over renters and young people trying to buy their first home. They left $33 billion of tax breaks on the table. People with two or more investment properties own a collective 1.7 million dwellings between them, and, at its most extreme, people with seven or more investment properties own 94,000 homes and claimed $1.9 billion in tax deductions. Labor chose that group of people, that tiny group of superwealthy people, over the seven million renters in Australia.

To put Labor's abject failure of courage and ambition into context—Treasury expects about 75,000 new first home buyers over the next decade or so. If Labor had stepped up and taken the kind of action we need to see, we could have had hundreds of thousands of homes available for renters and prospective first home buyers in the next few years alone. That would have been meaningful. That would have been an appropriate response to a housing crisis which is ripping our social fabric apart. But Labor failed to do that because they failed to show the ambition that was necessary.

This is now Labor's housing crisis. Young people and people who are watching the great Australian dream of owning their own home disappear off in the distance need to understand quite clearly the message that Labor is sending: Labor is not going to fix this housing crisis. Labor now owns the housing crisis, and the only party that is prepared to do the things necessary to fix the housing crisis in this country is the Australian Greens.

Young Australians are watching property investors keep all the tax breaks for as long as they like. For as long as they want to hold on to their properties, they'll keep the negative gearing benefits, and they'll keep the capital gains tax discount of 50 per cent up until 1 July next year. Young Australians are just going to have to cop it and wait. If they're saving up for a property, they'll have to wait patiently for investors to get bored of their tax breaks or to have their financial circumstances change and to sell up.

Treasury told the Greens led Senate inquiry into the capital gains tax discount that the average time that an investment property is held is nine years, so we're going to have to wait on average nearly a decade for these changes to wash through in any significant form. That's a decade-long wait for a bit of fairness in the housing market. It didn't have to be this way. The grandparenting or locking in of these tax perks could have been constrained to one investment property, not extended to people with five or 15 or 50 or 100 investment properties.

The words of former Treasury secretary Ken Henry to the Greens' capital gains tax inquiry when he was asked about grandfathering bear repeating: 'I hate it,' he said. To quote Saul Eslake's testimony, it 'privileges people, in essence, on the basis of when they were born or when they took particular decisions.'

Glenn Sterle (WA, Australian Labor Party) | Link to this | Hansard source

Order! Thank you, Senator McKim. It now being 1.30, we'll go to two-minute statements.