Dorinda Cox (WA, Australian Labor Party) | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. The Albanese Labor government's tax reform package makes the system fairer while backing housing supply and small business. As flagged in the budget, the government has since undertaken consultation on the package. Can the minister outline what came out of the consultation and how further initiatives give small businesses greater certainty?

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

I thank Senator Cox very much for that question and for the work that she's done in supporting this important tax reform package for our country. We are reforming the tax system for workers, for businesses and for future generations. We're delivering a new round of tax cuts, including more tax cuts for every taxpayer from next week, we're helping more Australians realise the dream of homeownership and we're also supporting investment and innovation.

We were up-front on budget night that we were consulting on certain details of our reforms, including for small and startup businesses with a low cost base. Last week, the Prime Minister and the Treasurer announced the details of those post-budget consultations. The government's additional amendments are all about providing more clarity, confidence and support for small business and more incentives for innovation. They go to a number of areas, including raising the threshold for small businesses for concessions on CGT from $2 million to $10 million in relation to the 50 per cent tax discount. Also, our consultation is now open on the new innovative-business CGT concession. We're making it clear that discretionary testamentary trusts will be exempt from new tax rules for trusts. We'll remove the ministerial discretion relating to new residential dwellings in the definition.

These details mean that the Albanese government is now delivering over $3.8 billion in new measures that lower taxes for businesses and startups, on top of the fourth and fifth rounds of tax cuts for workers and a fairer housing market for first home buyers. Consistent with all big tax reform, as we've always intended, we will legislate our reforms in multiple tranches, and there is more consultation to come, including on the arrangement for startups and implementation of the trust reforms.

Sue Lines (President) | Link to this | Hansard source

Senator Cox, first supplementary?

Dorinda Cox (WA, Australian Labor Party) | Link to this | Hansard source

Young people are key beneficiaries of the government's budget policies. Can the minister outline how the Albanese Labor government's tax reforms are levelling the playing field and giving younger people a fairer chance at owning their own home?

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

I thank Senator Cox for that supplementary question. This budget had young people at its heart, helping 75,000 homeowners get into the market and delivering tax cuts to help young workers get ahead. Treasury analysis finds that around 90 per cent of Australians would have been better off by the age of 30 had these tax reforms been in place from 2000, before factoring in housing affordability. We know that most young people get most of their income from work. Eighty-four per cent of young people earn 90 per cent or more of their taxable income from working, only around four per cent of tax filers under the age of 35 have a capital gain each year and just four per cent of the benefit of the CGT discount goes to those aged under 35. Compared to that, 32 per cent of the discount goes to those aged 65 and older. That's why it's important that we are rebalancing the tax system to lower the taxes on workers and make housing more affordable for young people.

Sue Lines (President) | Link to this | Hansard source

Senator Cox, second supplementary?

Dorinda Cox (WA, Australian Labor Party) | Link to this | Hansard source

With consultation complete and the details settled, this fair and responsible package is now ready to pass the parliament. Can the minister outline why it's so important these reforms are legislated without delay and encourage all senators to support the passage of this through this place?

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

I thank Senator Cox for the supplementary question. With the agreement that we have reached with the Greens today—we thank them for the work that they have done with us since the budget was announced—the government will be able to deliver those first tranches of tax reform, as we outlined on budget night. We have agreed to support an amendment that will be moved by the Greens to ban future limited recourse borrowing arrangements for residential property by superannuation funds. Other super funds are generally prohibited from borrowing money to invest, with the exception of LRBAs that are used by SMSFs. Multiple issues and concerns have been raised around these arrangements, with multiple reviews undertaken, including many of the reviews that reported under the former government, who chose to do nothing about it. The three right-wing parties voted against these tax cuts in the House. Now they're planning to do the same in the Senate, which will mean voting against concessions— (Time expired)

Sue Lines (President) | Link to this | Hansard source

I advise the chamber that Senator Lambie has passed her question to Senator Thorpe.