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

Pursuant to order agreed to on Tuesday, the Senate will now further consider the Treasury Laws Amendment tax reform number one bill of 2026 and a related bill. The second reading debate on the bills concluded yesterday evening, and I'm now required to put the questions on the second reading of the bills. I will now put the questions before the chair and then the remaining stages on the second reading of the bills. I'll begin with the second reading amendment moved by Senator Chandler. The question is that the amendment on sheet 3883 be agreed to.

Opposition's circulated amendment—

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".

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

I will now deal with the remaining second reading amendments circulated by the opposition. The question is that the amendments on sheet 3884, 3887 and 3892 be agreed to.

Opposition's circulated amendments—

SHEET 3884

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

(a) notes that:

(i) the Government is reducing housing supply in the midst of a housing crisis,

(ii) the Government's higher taxes mean 35,000 fewer homes, higher rents and less housing investment,

(iii) the Government's higher taxes add to the cost of housing, with existing taxes, fees and charges already adding up to 50 per cent to the cost of a new home, and

(iv) the Government is already more than 100,000 dwellings behind its own 1.2 million housing target and is projected to miss the target by well over 200,000 dwellings; and

(b) calls on the Government to introduce legislation to ban APRA-regulated super fund investment in residential property".

_____

SHEET 3887

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

(a) the Economics Legislation Committee inquiry into this bill was a rushed sham;

(b) the inquiry did not have enough time to enable the committee to consider hundreds of submissions;

(c) Treasury officials refused to provide evidence, refused to undertake basic preparations for their appearance and refused to table answers to questions on notice within a reasonable timeframe; and

(d) the Treasurer announced amendments one day after the committee concluded its hearing, making a mockery of transparency, scrutiny and proper parliamentary process".

_____

SHEET 3892

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

(a) the Government's higher taxes will starve junior minerals explorers of capital;

(b) 75% of Australia's economic mineral discoveries are made by small and mid-tier explorers who rely on investors willing to back high-risk projects;

(c) discovery to production can take 15 years and therefore Australians will pay the price for decades to come of exploration drying up; and

(d) the Government has already hit the resources sector by cutting the highly successful Junior Minerals Exploration Incentive".

David Pocock (ACT, Independent) | Link to this | Hansard source

by leave—Please can I record my support for 3887 in that group of amendments.

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

I will now deal with the second reading amendment circulated by Senator David Pocock. The question is that the amendment on sheet 3870 be agreed to.

Senator David Pocock's circulated amendment—

At the end of the motion, add ", but the Senate:

(a) notes that:

(i) despite substantial investments from the Albanese Labor Government in new social and affordable housing through the Housing Australia Future Fund, there remains a shortfall of around 640,000 affordable homes in Australia, and

(ii) the reforms to CGT and negative gearing will deliver significant ongoing benefit to the budget, with at least $6 billion in revenue not foregone over the forward estimates; and

(b) calls on the Albanese Government to reinvest a majority portion of these savings in new public, social and affordable housing".

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

The question is that these bills be now read a second time.

David Pocock (ACT, Independent) | Link to this | Hansard source

I move:

That the motion be amended as follows:

At the end of the motion, add "and the provisions of Schedule 1 to the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the provisions of the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026 be referred to the Economics Legislation Committee for inquiry and report by 14 September 2026".

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

I move:

Omit all words after "That", substitute:

(1) That it be an instruction to the committee of the whole to divide the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 to:

(a) incorporate Schedules 1 and 2 in a separate bill; and

(b) add to that bill enacting words, provisions for titles and commencement, and a provision giving effect to the amending schedules.

(2) That the bill incorporating Schedules 1 and 2 be referred to the Economics Legislation Committee for inquiry and report by 21 September 2026.

I understand I can speak to that, so I will. I just want to be very clear here about exactly what the opposition is proposing. Senator Pocock's motion, which he has just moved, relates to incorporating schedule 1 into a separate bill and sending that off to further committee inquiry. Now, the opposition would like to see both schedule 1 and schedule 2 of the bill removed and, again, sent off to an appropriate Senate inquiry.

I've said this before in the debate on these bills, and I will say it again. Schedule 1and schedule 2 will deliver a net tax increase to Australians—schedule 1 through changes to the capital gains tax and schedule two with changes to the negative gearing regime. As I said in my second reading speech yesterday, the coalition supports schedule 3 and schedule 4 of these bills simply because we will always support lower taxes. But we also want to see schedule 1 and schedule 2 of the bill, the schedules that contain the changes to negative gearing and to capital gains tax, referred to the Economics Legislation Committee for inquiry and report by 21 of September 2026.

If anyone wants to know why we are in this position, why we are still seeking to refer schedules of this bill off to the committee inquiry, they are questions rightly asked of the government because it is this government that set up a sham inquiry into these bills and that requested that the economics committee only have two days to undertake hearings into inquiries. It is this government whose bureaucrats admitted in testimony to that Senate inquiry that they had not had time to consider all of the submissions in relation to these bills. Now, that is a pretty galling admission from Department of Treasury officials to say that the inquiry has been too short, that there have been too many submissions and that the government has not been able to consider all of the evidence before the inquiry. What we are seeking to do here today is to once again refer the negative gearing provisions in this bill and the capital gains tax provisions in this bill off to an additional Senate inquiry so that Australians and Australian businesses can finally get the answers that they deserve to hear in relation to how these provisions work and in relation to exactly how much revenue these provisions will be bringing in for the government.

The Albanese government came up with a budget of broken promises, and it is spending recklessly, so recklessly and without discipline that we are headed to a $1.25 trillion debt bomb. That is the admission of the government's own budget papers. The interest bill on that debt bomb is almost $80,000 a minute. Now, we all know that today's debt is tomorrow's taxes, and what this government has done with its changes to capital gains tax and its changes to negative gearing are nothing more than a tax grab on hard-working Australians. It is too important for this Senate chamber not to be able to consider these tax changes in full. Like I say, in a situation where government officials have appeared in front of a Senate committee and not been able to answer any of the questions that we had, it is only right that we, again, take the opportunity to seek to refer the elements of these bills, after further Senate inquiry.

As I've said in other contributions in this place, with this budget this government will become the highest taxing government on average in Australia's history. This government, with these bills, is placing a tax on: family savings; on renters; on first home buyers; on death; on small businesses, startups and entrepreneurs; and on investment. You name it, and this government, with these bills, is seeking to tax it. Apparently, this is what the Albanese government wants the history books to show. They are okay with that, but it is not all right. With this current bill, once it passes, Australia will become the country with the highest capital gains tax in the world. Now the Albanese government is putting a no-investment advisory tag on Australia's economy. That is not productive. That doesn't sound promising for the economy or for the prosperity of our country, does it? Worse, it will lower Australians' living standards, Australians who are working so hard to get ahead.

In conclusion, just in case those opposite haven't heard clearly, the Senate inquiry that we have just had into these bills was an absolute sham. It was short. There were hundreds, if not thousands, of submissions. Treasury's own officials admitted there were so many submissions and the inquiry was so short in time, they did not have the ability to read all of the submissions. The government has not appropriately considered just how concerned Australians and Australian business owners are about the changes that have been proposed in these bills. We need, this Senate needs, to have an appropriate inquiry where everyone will have sufficient time to prepare a submission, sufficient time to read all of the submissions. Treasury officials, we're doing this for you. We want you to have the requisite amount of time to read the submissions and consider the evidence, and we also want the chamber to have sufficient time to report on those changes. It was so obvious that the Albanese government didn't want any scrutiny on their so-called tax reform bills. That is why they set up this sham inquiry and these bills were forced upon all Australians.

We have to remember, at the end of the day, no-one voted for these new taxes. Twelve months ago, Mr Albanese and Dr Chalmers stood in front of Australians so many times—the Prime Minister and the Treasurer—and said there would be no changes to capital gains tax. There would be no changes to negative gearing. The Prime Minister said 'my word is my bond'. With this motion today, moved by Senator Pocock, amended by myself, we are giving the government the chance to redeem themselves and respect every Australian and every Australian business that pays taxes in this country. Let this Senate chamber have the appropriate level inquiry into these bills. Give us another few months to look at them and maybe we will finally get some answers.

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

Senator Wong?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

I have a point of order in relation to Senator Pocock's motion. I think Senator Pocock moved the incorrect motion for the purposes that he seeks. I realise he has a lot of pieces of paper flying around the chamber with procedural aspects. But he did not move his contingent motion 6A, which was the necessary motion for what he is seeking to do. He moved a substantive amendment to the second reading, which has already occurred. So I'd ask you to note that, in fact, the contingent motion has not been moved by Senator Pocock.

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

I'll certainly do that. The Clerk advised me that the contingent motion wasn't moved, and I'm now inviting Senator Pocock to clarify what motion he is moving.

David Pocock (ACT, Independent) | Link to this | Hansard source

Thank you, President. My apologies to the Senate. I had conflicting papers in front of me, but I have that now, if I'm able to move it?

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

Yes.

David Pocock (ACT, Independent) | Link to this | Hansard source

Pursuant to contingent notice standing in my name, I move that it be an instruction to the committee of the whole to divide the treasury laws amendment—

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

Just s moment, Senator Pocock. Minister Wong?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

Just to seek a direction from you, and it may be that we'll do Senator Pocock the courtesy of remedying his error, but my recollection is the moment at which he could move a contingent motion has now in fact passed, so I'd like an indication from you. If that is the case, then he can seek leave.

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

Thank you, Senator Wong. I will indeed seek advice. I am advised, Senator Pocock, that you now should be seeking leave to amend the motion that you moved.

David Pocock (ACT, Independent) | Link to this | Hansard source

Thank you, Mr President. I seek leave to amend a motion in my name.

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

Is leave granted.

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) | Link to this | Hansard source

Leave to move the 6A contingent motion.

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

Well, I was advised, and I'll check my advice, Senator Wong, that he should seek leave to amend but I may have misheard. Senator Pocock, I am advised that you need to seek leave to move your contingent motion 6A, and then, if leave is granted, I will need to offer an opportunity to Senator Chandler to make sure that her amendment is in fact attached to the right motion.

David Pocock (ACT, Independent) | Link to this | Hansard source

by leave—I move:

That it be an instruction to the committee of the whole to divide the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 to:

(a) incorporate Schedule 1 in a separate bill; and

(b) add to that bill enacting words, provisions for titles and commencement, and a provision giving effect to the amending schedule.

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

I move:

Omit all words after "That", substitute:

(1) That it be an instruction to the committee of the whole to divide the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 to:

(a) incorporate Schedules 1 and 2 in a separate bill; and

(b) add to that bill enacting words, provisions for titles and commencement, and a provision giving effect to the amending schedules.

(2) That the bill incorporating Schedules 1 and 2 be referred to the Economics Legislation Committee for inquiry and report by 21 September 2026.

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

So the Senate is clear about what is happening here, this motion is being moved so there's the capacity to separate the bills. The government's position is that these bills proceed and the schedules of the bills proceed as a package. Senator Pocock is seeking the capacity to separate the CGT elements of the package out but allow the negative gearing, the working Australian tax offset and the instant deductions—schedules 2, 3 and 4—to proceed or to be dealt with separately. Senator Chandler's amendment to that adds schedule 2 to Senator Pocock desire to have schedule 1 set on a separate path or separated. Essentially, the end result would be to remove CGT, and, if Senator Chandler's amendment got up, to have CGT and negative gearing separately dealt with. The government does not support either of those propositions. We do believe that it's important that both the CGT and the negative gearing adjustments are progressed together with the other tax reform measures, including the tax cuts for Australian workers. It's not just because they all support the rebalancing of the tax system but because, importantly, one part helps fund the other part. That's why we've had stakeholders, including experts, backing the package as a whole. In the submissions to the inquiry, the ANU Tax and Transfer Policy Institute said:

If these reforms are to be adopted, we would strongly encourage adopting them as a package.

In another inquiry submission, Professor Miranda Stewart said:

The reform package should be considered and passed as a whole by the Senate. It presents a coherent set of reasonable and fair policy choices.

The reforms must be seen together. The government have thought about these things carefully, and we won't be supporting any attempt to separate and delay certain elements of the package whilst proceeding with others.

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

The question is the amendment moved by Senator Chandler be agreed to.

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

The question is that the motion as moved by Senator David Pocock be agreed to.