Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

Senator Scarr has submitted a proposal, under standing order 75, today. It is shown on at item 13 on today's Order of Business:

The Albanese Government's decision to ram through a massive tax overhaul that imposes a so called "widow tax", higher taxes on some Australian small businesses, and damaging new taxes affecting investment, housing, charities and the broader Australian economy.

Is consideration of the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

With the concurrence of the Senate, the clerks will set the clock in line with the informal arrangements made by the whips.

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

Just for those who are listening or watching, I want to read out this matter of public importance, which the Senate will now be debating, and it reads as follows:

The Albanese Government's decision to ram through a massive tax overhaul that imposes a so called "widow tax", higher taxes on some Australian small businesses, and damaging new taxes affecting investment, housing, charities and the broader Australian economy.

Last week, in this place, the Greens and the Labor Party did a deal under which the Labor government rammed through material tax changes which will have a huge impact on the Australian economy and are already having a huge impact on the Australian economy. We saw it just last weekend when, across the country, auction clearance rates in relation to people attempting to sell their houses had fallen through the floor. They've fallen to levels which have not been seen since during COVID. That's how bad it is. That is the lack of confidence in the Australian property market at the moment we're seeing as a direct result of the Labor Party's introduction of these massive tax changes. Auction clearance rates—that's the rate at which houses are being sold at auction—across the country are less now than at any other time except during the height of COVID, when, especially in Victoria, people were locked up. That is the undermining of the confidence in the Australian property market caused by this Labor budget, and it's an absolute disgrace.

I also want to talk about the so-called widow tax and to explain to people what this means. There were provisions in the budget that provided for grandfathering with respect to investment properties that are owned as at the date of the budget. They would continue to receive the benefit of the existing regime, and that makes sense on the basis that someone has purchased a property on the basis of the existing taxation arrangements; that property should be continued to be treated the same way whilst it's held by whoever the owners are. We found out from the Senate that there's a problem with the way the government has drafted this proposal, and there's a problem with the legislation that was passed just last week by the Greens and the Labor Party. If an investment property is held by a wife and a husband, two spouses, and one of the spouses dies, that triggers a change in ownership, and that triggers tax consequences in relation to the surviving spouse. That's absolutely unacceptable. All those mum and dad investors out there who buy investment properties in their joint names are potentially going to be impacted by this glitch.

The second issue is where two spouses buy a property in both their names and then they get divorced. Again, it's going to trigger potentially disastrous taxation consequences for that couple. What is so surprising is that the Labor government didn't think about this before they put forward these tax changes. These are obvious issues which should have been considered by the Labor government before they broke their promise, which they took to the last election, with respect to making no changes to negative gearing or capital gains tax.

We saw the Treasurer on Insiders on Sunday, when he was specifically asked by the host, 'How are you going to fix it? What are you going to do?' because the Treasurer said, 'We're going to fix it. We're going to do something to fix it,' even though they pushed the legislation through last week. When he was specifically asked, 'Treasurer, how are you going to fix it?' he couldn't say. He didn't know how they're going to fix it. We have no idea. There's no detail nor clarity whatsoever. So there will be Australians today who own property in their joint names who are at risk that this issue is not going to be correctly rectified.

It is just one example of the unintended consequences which are flowing from the Labor Party's budget, which we saw in reality on the ground over the weekend with that massive fall in auction clearance rates because of an undermining of confidence in the Australian property sector. It's the same across the board, in the mining sector and biotech sector. Young shareholders and older shareholders have lost confidence to invest in this country because of Labor's budget.

Michelle Ananda-Rajah (Victoria, Australian Labor Party) | Link to this | Hansard source

This is a beat-up. This is a desperate attempt by the Liberals to distract from their plummeting fortunes in the polls. The Leader of the Opposition was on radio, and he was pleading for more time. He said: 'I need more time. We can't turn around the tanker.' Mate, it's not a tanker—it is the Titanic and it is sinking fast for those on the other side.

The Liberals, true to form, want to focus on what these tax changes are not about rather than what they are actually about. These tax changes are the biggest shake-up in our tax system in a generation. They are about two things. The first is getting young people into housing—by far that is at the heart of the budget. The second thing is that it is designed to put more money into people's pockets so that they can earn more and keep more of what they earn. Now, at five minutes to midnight, just as those tax cuts are about to hit the pockets of Australians, those opposite come into this chamber to lecture us, Labor, about tax reform. It is astounding to me that they want to defend the status quo. They want to defend a status quo that is utterly broken for an entire generation of Australians, who have been locked out of housing, thanks to this disastrous interaction that was born 30 years ago between capital gains tax and negative gearing, which saw house prices explode beyond reach of most Australians.

Back in 1999, the average first home buyer was in their late 20s. Fast forward to now and the average age of a first home buyer is 34 to 36. Westpac reports that one in five of first home buyer loans are going to people over the age of 40. In other words, first home buyers are actually ageing in to housing, and that has a multitude of knock-on effects. They're settling down later. They're having children later or perhaps even not at all, and then we wonder why our fertility rate is in freefall. Well, the changes that we passed last week are designed to reverse all of that. We are seeing those changes now being backed in by the Australian people in polls, which are showing support for these changes, as difficult as they are.

But generational reform does have unintended consequences and it does create grey areas that require remediation. Those legal grey areas are not unusual. In fact, in 1999, when the Howard government passed the GST, which was the last time this country ever had significant taxation reform, it required over 100 amendments to 16 bills, and then it required nearly 1,000 amendments over the following six months to again clean up legal grey areas. This grey area, around joint ownership of an asset and what would happen to capital gains treatment of that asset in the event of a divorce or in the event of a partner dying, was identified by the Senate Economics Legislation Committee. We knew about it, and the Treasurer has been explicit. He has said that a fix is coming and it will be enshrined in legislation—just to put to bed the scare campaign. It is a shame that the Liberals always revert to form on this. They look for loopholes and grey areas, they weaponise them and then they try and generate a scare campaign. This is true to form. They fall back. It's a default position for the Liberals, and it's a shame that it gets backed in by the Nationals as well as One Nation—but One Nation deal themselves out because they have no solutions for this country, only slogans, division and fear. That's what they trade on.

We as a Labor government are not here to defend the status quo. We challenge the status quo. While people are under sustained cost-of-living pressure, we are responding. We are responding with tax cuts. Australians will be receiving a tax cut on 1 July. This is one of five tax cuts that will deliver, in the next year or so, an additional $2,800 into their pockets. We also backed in an increase to the minimum wage. For the first time ever, the minimum wage is rising to over $1,000 a week. That's the fifth time this Labor government has backed in wages. Only Labor governments back in wages and entitlements for workers. Those opposites seek to undermine them. One Nation seek to destroy those entitlements altogether. We have also backed in payday super, which will see people on lower incomes have much higher retirement savings. For example, a 25-year-old will retire with $10,000 additional at retirement. (Time expired)

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

What we've just heard from Labor is that they believe it's normal to accidentally pass a tax on widows and divorced couples. Well, I can tell you it's not normal. It is an act of bad government. Is it any wonder, when you hear Labor claiming this is normal and this wasn't a terrible mistake, that Australians don't believe them? Is it any wonder that Australians no longer trust this Labor government?

Labor say that they want Australians to focus on what they call a 'big tax reform', but it's not a big tax reform. It's really just a giant tax grab—$77 billion more in taxes that they are taking from you. And this budget bill—we know they've passed this widow tax and we know they've passed this extra tax on divorced couples, so what other cosmic sized black holes, what other dodgy accounting, are lurking within this bad bill? But Labor says: 'Don't worry; trust us. We're just going to fix it later.' Why should anyone trust you when they know you continue to mislead them? Why would anyone trust the Prime Minister?

The Prime Minister says his word is his bond, but recall that he promised that he would deliver the stage 3 tax cuts—but then he scrapped them. And then he claimed there'd be no major changes to super, but then they raided the superannuation balances of Australians. And then the biggest 'I've changed my position' of all was the 50 times that this prime minister said he would not change negative gearing or capital gains. That's what he said to the Australian voters, yet here we are.

Labor governments punish initiative and aspiration. They are reaching deep into the pockets of nurses, teachers, labourers, police officers, small-business owners who are just trying to get ahead. And now Labor has proved to Australians that they should not trust a word it says. The question you should be asking is: what else will Labor 'just change its position' on? Are they going to remove the family home from the pension asset test? Is that what's coming up next election? 'Well, we've just changed our position on that.' How soon before Labor bring back the Voice to Parliament, which they said they wouldn't be doing? How long before Labor have 'just changed their position' on the Voice to Parliament? Labor says that they've carved out the death taxes from this bill, but how long before 'they've just changed their position' on that topic? That is what you need to be concerned about under this bad Labor government.

Labor likes to repeat the word 'fairness'. They'll say this budget is about fairness. Well, it's time we call it what it really is, which is just rank socialism. This is a Labor government addicted to spending your money. And, when Labor starts running out of your money, they come back for more of your money and more. We see taxes go up. We see investment driven away. We see productivity drop and Australians suffering more and more.

I'd just like to point out that One Nation's Fire the Liar campaign has proved that no-one believes them anymore. Australians are furious at the continued broken promises, the continued misleading statements. They're tired of leaders who just say, 'I've changed'—the Prime Minister saying he's changed his position. Australians will not stand for it any longer.

But there is hope on the horizon, because a One Nation government will be committed to cutting everyday taxes. We believe that income splitting is a great way to put more money back into your pocket, reducing the tax burden on couples and incentivising people to keep more of their money.

One Nation will rein in government spending by scrapping net zero. That is a promise. We will scrap net zero. When you look at the drain on this economy of the net zero ideology that this government is obsessed with, the damage that it's causing this country—that's why we say we will scrap net zero. All of the money that you have hidden away in the Capacity Investment Scheme, all of the money that you're funnelling there, taxpayer money going into propping up wind factories and windmills and the intermittent power that is making it impossible for manufacturing to continue—that'll be gone. There'll be no changing position on that. That is a promise that we make to you. One Nation will abolish net zero and restore reliable base-load power to this country.

One Nation will restore the hope and aspirations of working Australians. We will put more money in their pocket, and we will do so by defeating this bad Labor government.

Andrew Bragg (NSW, Liberal Party, Shadow Minister for Housing and Homelessness) | Link to this | Hansard source

I should acknowledge the good Senator Scarr's motion. He's one of the one of my favourite senators, I should probably say, at this point. Of course, all senators are equally favoured, but I think he makes a very good contribution on the committee and in this parliament, working in a collegiate way where it's possible to do so.

I make the point that this budget has been a shambles because the government have had to have four goes at this. They had a budget in May, where they announced their 30 per cent tax on everything, ostensibly to fix housing—hilarious. Then they came back in June and said they were going to make some changes to startups. Then they came back later in June and announced their crooked SMSF deal with the Greens. Then last week they said that they'd play around with this widow's tax. The problem that we have in this country is that, in raising $77 billion of taxes from the people—remembering that the government has no money of its own other than what it raises from the people—the government have not bothered to do any regulatory analysis to work out where the problems are in raising $77 billion in new taxes. So what we've found is that there are problems, because this will be a widow's tax. If you die or you get divorced, you will lose access to grandfathering.

It also raises the problem that they haven't even bothered to define 'new build'. For a policy which apparently has been held out to be about housing, they haven't even bothered to define what a new build is. Then we have this ridiculous thing around the self-managed super funds. The government have decided that they would kowtow to the Greens, their alliance partner, and that they would ban SMSFs from borrowing to invest in housing. Setting aside the idea that it is insane to try and stop any investment into housing, because we need more houses—one thing we need more of in this country is more housing. So we shouldn't be bothered about where the investment is coming from, but the government have a deliberate design feature to reduce housing supply by 35,000 with their negative gearing and capital gains changes. Now they have a new policy to reduce housing further by many thousands.

The fly in the ointment here is that the government have no idea how many houses they will deprive the Australian people of because they haven't even bothered to model it. They have no idea what the impact of their self-managed super fund ban is going to be. They have no idea. We asked the minister representing the Prime Minister on Thursday, 'How many houses?' She said '4,000 fewer'. Today we read in the Financial Review that those claims are ridiculous. Just eight providers wrote more than 4,000 loans last year. This begs the question: does it matter whether it's 4,000 or 400 or four million? Yes, it does, because a government that knows what it's doing would know how many houses they're taking away.

The more important point is: Why would a government want to reduce housing supply by four million, 400 or four? Why would you want to have fewer homes? If a person who has an SMSF is borrowing to invest in an off-the-plan scenario to build a new house, why is that bad? What's wrong with that? It doesn't make any sense to me. I can't understand it. Maybe my brain is full of rust. It's possible. I'd say on this occasion it's unlikely, because I can't think of any reason. I can't even understand the Communist or socialist manifesto including a rationale or a reason or a justification to cut housing supply just because you don't like the investor.

I'll tell you what is crooked and criminal. It's that the government has cut out all its mates in the big super funds from these reforms. So, if you are a punter, you pay 30 per cent tax; if you are Cbus or 'Wayne Swan and the 40 thieves' or whatever running AustralianSuper, you only pay 10 per cent. They have deliberately created, through the tax code, arbitrage to support the bloodsuckers, the Draculas out there and all these people that run their campaigns and fund their political party because the problem the Australian people have is that they have a government for vested interests here. They have a government that doesn't give a rat's about their people. All they're worried about is how they enrich their mates and pay off their bad political debts. What we've seen today is chaos, confusion and a budget with more holes in it than a piece of Swiss cheese.

Josh Dolega (Tasmania, Australian Labor Party) | Link to this | Hansard source

Before I start on Senator Scarr's motion, I might address Senator Bell's claims when he was smugly talking about their funded campaign. I heard another good slogan just on the weekend and I reckon people should get behind it. I heard about 'sack the orange hack'. I reckon that's what most average Australians are wanting to do right now.

But back to Senator Scarr's matter of importance—it really is just an act of desperation from the coalition, a desperate stunt to distract from their many issues. To be frank, they are really just trying to hide from their leadership issues, with Mr Taylor failing to be able to explain whether the coalition supports multiculturalism. And there's their failing shadow treasurer, who isn't up to the job and who many say isn't even close to being able to take on Jim Chalmers. They're lost in their desperate plight to fend off the orange mob over there as they continue to stop their rise.

Our current taxation system is a significant driver of intergenerational inequality. Instead of rewarding productive work, it rewards holding assets, something that many hardworking Australians simply cannot afford to do. They've never had an opportunity to even get into a house to call their own. You know something isn't right when our essential workers, our hardworking Australians, are struggling to pay rent, let alone buy a home. That's why we're reforming the tax system—for workers, for businesses and for future generations.

Our reforms will build a better and fairer tax system by reducing the tax burden for over 13 million workers, supporting 75,000 more homeowners into the housing market, delivering over $3.8 billion in new measures that lower taxes for businesses and startups, and reducing compliance costs by $540 million a year. We've been clear that these are complex interactions and that details are still being worked through, as the Treasurer and the Minister for Finance have both indicated. This includes addressing some of the arrangements for jointly owned assets in circumstances like death and divorce. So what's the point of this MPI when it has clearly been put on the record in the past week that there'll be further tweaks to the taxation measures?

Today in question time in the other place, in another fantastic, great move—in another 'Well done, Angus' moment—the PM absolutely owned him. He hosed down the misinformation and assured the opposition that the answer is that they won't. We've made it very clear, said the Prime Minister in response to Mr Taylor's question.

Since the introduction of the 50 per cent CGT discount, housing prices have risen twice as fast as inflation and average full-time earnings. That's not sustainable, and that's what our government is working to fix. From 1 July next year, we'll be abolishing the discount on gains, returning it to the cost base indexation and the 30 per cent minimum tax rate. That means only real gains will be subject to tax in the future. Additionally, anyone who bought a property after budget night will only be able to negatively gear new builds. On this side of the chamber, we're focused on outcomes. We're focused on delivering for working people, for those who need support.

Meanwhile, the Liberals, the Nationals and One Nation, the three right-wing parties on the other side, are out there spreading misinformation and trying to scare people about the budget. Misinformation that all small businesses will be taxed at 47 per cent is simply that: misinformation. I cannot emphasise the point enough that most small businesses in Australia won't be negatively affected by these changes. Many may even be better off. Let me be very clear: the overwhelming majority of businesses are already eligible for generous CGT concessions. What we've done, through our consultation process, is to make these concessions even more so. Labor is the party of small business.

From this week, a small business will be able to carry back tax losses and offset them against tax paid up to two years earlier. So, from 1 July 2028, startup companies and businesses with a turnover under $10 million and that generate a tax loss in the first two years will be able to convert that loss into a refundable tax offset. That's why I'm proud to be part of this great Albanese Labor government—because we're focused on doing the right thing. We don't have to do the easy thing; we are focused on doing the right thing, to deliver for those people who expect it of their Labor government and who need us to do that.

Slade Brockman (WA, Deputy-President) | Link to this | Hansard source

There is a lot of misinformation being spoken in this place, and I think the biggest lot at the moment is the phrase 'tax reform', because this budget was not reform. It was a tax grab, straight and simple, and that is all it was. It's not just the $77 billion in increased taxes; if you include bracket creep over the future, you're looking at around $300 billion in tax that this Labor government will take out of the pockets of Australian small business and Australian wage earners. There is no reform. There is simply a big tax grab.

Why is this widow's tax so revealing of this Labor government? It's because they had no clue that this was an unintended consequence—I hope it was an unintended consequence—of their tax changes. I will never call them tax reform. But the tax change affects couples in our community who literally did everything right. They did what they were supposed to do. They bought a modest investment property years ago, declared every dollar of it and played every cent that they were owed. And then, sadly, under the tax law that Labor passed, if one of them passed, on the day of that death, that grief was going to come with a tax bill. That is the law they actually passed through this parliament.

They say, 'Oh, we're going to go back and fix it,' but the point is they didn't know what they were doing when they put that measure in a budget. They didn't know what they were doing when they put that legislation through this parliament. They couldn't even take the time to stop, craft an amendment and pass it in this place. Last week, when the bill went through, they couldn't even take that time. They had to rush these tax changes through parliament for one reason and one reason alone, and that is because they are addicted. They are addicted to spending, and they are addicted to taking more and more money from Australians.

Let me give you another example of this and one close to my heart. That is the rebasing of all assets in this country. I'll give you an example of—as I say, it's close to my heart—a family farm that's been in a family for a long period of time. All the assets within that family's farming operation will effectively have to be revalued as at 30 June 2027. There are two different valuation methods you can choose, but the fact is, in order to know which valuation method will be advantageous to your business, you have to explore both, which means you have to get a valuation. This is going to be in and of itself an extraordinary, deadweight loss to the Australian economy. The valuation industry will do very well out of it, but it will be an extraordinary cost to every farming family, every small-business person and pretty much everyone in Australia who has some sort of asset base.

What this does, and the reason I raise a farming family, is make intergenerational succession extraordinarily difficult. That's because the rebasing and the triggering of capital gains tax events really leaves farming families in an extraordinarily difficult position, where they may have to find tens or hundreds of thousands of dollars in taxation due to asset revaluations of a farming property that has been in a family potentially for generations. They now will have to find cash to pay a tax bill on because of the rebasing and because of changes of ownership with death and succession. Even with the fix the government has announced, this still is a death tax budget.

Helen Polley (Tasmania, Australian Labor Party) | Link to this | Hansard source

The time for that debate has expired.