Matthew Canavan (Queensland, Liberal National Party) | Link to this | Hansard source

I rise to largely to indicate the coalition's support for the measures in this bill. Much of it is relatively perfunctory and a clean-up job.

I did want to begin, though, by saying there's a little bit of a confusion. I'm a bit perplexed at some of the practices as to titling bills in this place. As I said, a lot of what's in this bill is a clean-up job—and later I'll come to some other measures. The title of the bill is: Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026. It's often the case in politics—it's a general rule—that, if a government calls something 'black', it almost certainly is white. It's a pretty strong rule. When politicians and governments go to great lengths to say that they're trusted, they're free and they're democratic, you can pretty much be sure they're actually completely the opposite. I mean, the democratic republic of Korea to this day—that actually describes North Korea; the official name of North Korea is the 'democratic republic of Korea'. It's anything but democratic there in that country.

Likewise, here, we have a government that just passed the biggest tax grab in Australia's history, based on a lie to the Australian people, coming into this place with the affront of saying they're delivering a trusted tax system. Well, trust in our tax system has been demolished by this government, which didn't have the guts to take its tax policies to the Australian people last year. In fact, not only did they not take these policies to the Australian people; they explicitly told the Australian people they would not increase taxes on capital gains, on trusts, on negative gearing and then, within a year, turned around and broke that trust, broke that promise and therefore broke the Australian people's confidence in our tax system.

How can there be trust in our tax system? If you had made an investment early last year based on thinking, 'This'll be the capital gains tax regime; this will be the negative gearing regime; this is the trust structure that my accountants and lawyers have advised that I set up,' and done so on the basis that the government and all the politicians were of the same view that none of these taxes should change, the longstanding arrangements in all of these areas—so you make those investments. For a small business, you might mortgage your own home and put your livelihood at risk to follow a dream. And then, a year later, the government turns around and does exactly what it promised not to do, which completely throws into chaos your life plans, your business plans.

We've seen the reaction of so many small businesses to what's happened here. I've spoken to many of them in the last couple of months. I held four small-business roundtables in the fortnight we had away from this place a couple of weeks ago and just had small business after small business tearing their hair out and wondering why they have hocked themselves to death and put at risk their own livelihood when the government in Canberra just doesn't back them. It doesn't just not back them; it's not even upfront with them. It just constantly tells fibs. Now, on top of that, rather than recognising that and being sorry for that, the government rubs salt into those wounds with titles like this saying that they're delivering an efficient and trusted tax system—an absolute joke. This bill does not do any of that. It's nowhere near as significant as the title might make out.

As I say, there are a number of provisions in this bill that we will and can support. The government is making changes to clean up parts of the tax act. The government added some extra changes here to this bill after it was put in place which do some routine business, such as increasing and indexing the thresholds for the Medicare levy. There are some very small changes, like removing the $2 minimum you must have for a tax deduction. Obviously, with the way electronic transactions work these days and bank fees and all these things, sometimes that minimum is too high, and that's being removed. We support that. That's a sensible change, albeit hardly earth shattering.

This bill does make the reporting mechanism for trusts a little bit more efficient, although—going to my introductory comments—this particular change does nothing to make up for the fact that the government has broken the trust of the Australian people in terms of how we tax trusts. As I said earlier, the government said last year it wouldn't change the taxation arrangements for trusts. Instead, in the budget released a few weeks ago and passed last week through this parliament—rammed through—the government will put a minimum tax on trusts, completely undermining the promise they made last year. But we do support this change, this part of this bill, which reduces some duplication and allows for tax returns to be prefilled with trust beneficiary information, like tax file numbers and the like. And then there are some very, very small technical amendments that just fix up some minor drafting corrections and clarifications in schedule 3. We support all of those things.

Schedule 4 make some changes to the R&D tax credit system. Again, these are things we won't oppose. They're a little bit more significant, but we're happy to support some workable changes here, including restricting R&D tax incentives for tobacco and gambling activities. I think we've got to be careful that this does not become a general rule. The R&D tax system has strengthened that system, I believe. It is broad based, and we don't seek to pick winners here. We offer R&D incentives to all types of businesses in the country, and it is that flexibility that has been the strength of the system. I don't think we here in this place know best how to make a business more efficient or grow or develop. It's best to leave that to the people who actually run businesses and who put their livelihoods and their mortgages on the line. We give them broad authority to innovate, which we want them to do, and claim a tax deduction for that.

In this case, there is going to be a restriction here on tobacco and gambling, I understand. They're certainly activities that we don't seek to promote in the same way we want to promote the development of manufacturing, agriculture or mining et cetera. I would just note that the risk here is that, once we do something like this, different political parties will seek to use this vehicle. I don't want this to be a precedent where we believe that we should seek to restrict the R&D tax incentive just because we don't like a particular industry, because we think this industry is bad and shouldn't be developed. If it's a legal activity, it generally should be able to do this. If it's adding value to our GDP, whether you like it or not, like mining or like agriculture, and if we're happy to tax it into oblivion and make money from those industries, we should allow them to grow and develop in the way they see fit, using a very effective scheme. The R&D tax incentive scheme has been a core part of our tax system now for multiple generations.

Schedule 5, as I mentioned briefly earlier, increases the Medicare levy tax thresholds. This is routine business that's often done here to make sure that those on low incomes are not subject to the Medicare levy. Certainly with inflation in recent years under this government, the inflation rate here has been the highest in the developed world. Let me say that again. We have the highest inflation rate in the developed world here in Australia. That was the case before the Iran war; it wasn't Donald Trump or the Iran war that caused that. The inflation was homegrown in this country thanks to this government's lack of discipline on its budget. Given that inflation, there's obviously a great need to lift these thresholds, otherwise people on very low incomes will be hit with a levy.

So we support that, but we support it while making the broader point that if it's good enough for the thresholds for the Medicare levy to be indexed, why isn't it good enough for the thresholds across the tax system to be indexed? The government is effectively supporting the coalition's policy here, albeit for a very small part of our tax system, which relates to the Medicare levy, a two per cent surcharge. Well, how about the tax rates of 20 per cent or 30 per cent or 45 per cent that relate across the income threshold—much higher rates of tax that now kick in at very low incomes.

The tax-free threshold, for a start, has not changed from $18,200 since the early 2010s. For over 10 years now that's been stuck at $18,200. Again, thanks especially to the inflation unleashed by this government, $18,200 doesn't buy what it used to buy, so that number is a bit low. The government's tax is coming to families and households at what is now in effect a much lower rate, albeit at the same number, $18,200, as it was back in 2011, when this was changed. That's 15 years ago now. It's same number, but it's not really the same number in inflation adjusted terms. So that surely should go up too. Why isn't that going up? Why is the government taking in more tax from low-income people when it's happy to change these thresholds?

That's why we in the Liberal and National parties proposed that actually what we should be doing is have those thresholds increase each year, and have them go up with inflation, so the government doesn't get away with stealing your money silently through inflation. That's what happens. They unleash inflation, they spend more of your money, they waste more of your money—which is clearly happening in this place right now; there's massive waste happening here right now—and that forces up inflation, and that means you're then forced up the tax scale. You don't necessarily have to jump tax brackets. Even just earning more within a tax bracket means you pay more tax thanks to inflation, because of that extra income you're getting. Your wage will go up with inflation, as it largely has.

We just had a minimum wage decision which effectively just kept up with inflation—4.75 per cent increase across most awards. Inflation is actually projected to be five per cent this year, so they're actually going backwards a touch, but it's roughly the same. They're not really getting a 4.75 per cent increase in income because, of course, the price of everything has gone up, plus those people are forced into the higher range within their tax bracket, and they pay more tax. In fact, inflation at a normal level would take $250 a year off you every year. You just get it taken off you thanks to the inflation tax that funds Labor's waste.

Well, we think that's wrong. We think it's unfair. It's inequitable. It's a silent tax that most people don't realise that should be stopped. If the government wants to tax you more, they should have to bring in a law to get that passed. They should have to take it to an election, like they didn't last year, and ask for your consent, not silently take money off you. We support these thresholds going up, but a question has to be asked. If the government supports the Medicare levy income thresholds going up, why aren't they supporting the increase in the income tax free threshold and the 45 per cent tax-free threshold? Why aren't all of these going up with inflation so that we create lower taxes and more incentive and return more money to people at a time of a cost-of-living crisis? So what we will be doing is supporting this policy. We will seek to help people in this situation.

Finally, the last schedule of this bill makes some changes to the pension supplement while people are overseas. We support these too. They're a little bit more significant changes, but they're somewhat sensible. The supplement is meant to be there for pensioners to help them with the cost of living here in Australia. Again, it is something that is desperately needed. We fully support this. However, at the moment it can continue to be paid to pensioners who are living away from Australia. The idea is that this is a supplement for people who are facing the costs in Australia. The current situation is that after six weeks people still get it but get a lower rate. The government here will end that, but they'll now give it to people at the full rate for 12 weeks. So, if they're overseas visiting family or have to go overseas for a funeral or something reasonable, fine—three months. But after three months you won't get the supplement at all, which I think is fair and reasonable. If you're a resident, this is a supplement. It's only a supplement. It's not the pension as a whole. The supplement should be reserved for those people.

I want to finish, though, where I started off. We have to restore trust in government. It'll be the key way we restore confidence in the economy and keep things moving. I'm very worried about where the economy is headed under this government right now, but we've got to restore trust. One way we can restore trust is do as we say. This government last week rammed through some tax laws which are clearly incomplete and ham-fisted. The government put through tax laws which would effectively give a capital gains tax bill to someone who's lost their spouse. If you have a death in your family or your wife or husband dies and you have some investment properties, under this government that triggers a change in assets, and you can potentially face a capital gains tax bill or rather a negative gearing change to your arrangements. That should end. This so-called widow tax should end. I just want to flag that during debate here the coalition, the Liberal and National parties, will move an amendment to that bill to fix that. We will give the government a chance to do what it says it wants to do—get rid of the widow tax. So we'll move an amendment to remove the widow tax to ensure that people facing heartbreak with the loss of a loved one don't also face a tax bill. We will stand up for fairness. We'll stand up for trust in our system on this side. (Time expired)

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

At first glance, the Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026 contains a number of technical amendments across Australia's taxation laws, but collectively these reforms tell a much bigger story. They're about ensuring Australia's tax system keeps pace with the modern economy. They're about making our laws simpler, more efficient and more responsive to changing technology. They're about reducing unnecessary compliance while strengthening public confidence that taxpayer support is directed where it delivers the greatest benefit. And they are about this government's broader agenda to build a stronger, more productive economy after a decade in which productivity growth stalled and too many reforms were simply put in the too-hard basket. It is about reforming the small frictions that accumulate over time and about making government systems work better. They are not isolated changes. They are part of a systematic effort to lift productivity across the economy. One of the clear lessons from the past decade is that complexity has a real cost. It slows decision-making, it increases compliance burdens and it diverts time and resources away from productive activity.

This bill contains four separate measures that improve the operation of Australia's taxation and regulatory framework. While each schedule addresses a different issue, together they modernise aspects of the tax system that have not kept pace with changes in technology, simplify administrative processes, reduce unnecessary compliance and ensure that public support is directed towards activities that deliver the greatest economic and social benefit.

These are practical reforms, but they are also part of a broader agenda to improve Australia's productivity and strengthen confidence in our taxation system. One of the consistent findings of the Productivity Commission, and of other economic reviews over time, is that productivity is affected not only by major structural reforms but also by the cumulative impact of unnecessary regulation, outdated administrative processes and legislation that no longer reflects the way Australians live and do business. Small inefficiencies can impose significant costs when they're repeated across millions of taxpayers, businesses, charities and advisers across the economy. Requirements that duplicate information, rely on outdated reporting systems or fail to take advantage of technological advances increase compliance costs without improving regulatory outcomes.

Improving productivity, therefore, requires governments to continually review existing legislation, modernise administrative systems and remove barriers that no longer serve a useful purpose. It complements the government's broader regulatory reform agenda, including more than 60 regulatory reform measures, reductions in unnecessary tariffs, improvements to financial sector reporting and continued investment in modernising government services.

I turn now to schedule 1. In 2022-23, around 4.4 million Australians claimed tax deductions totalling $2,260 million for gifts or donations to deductible gift recipients. That level of generosity is significant, but the government has set an ambitious goal: to double philanthropic giving by 2030. To achieve that, we need to make it easier for Australians to give in ways that reflect how people live and transact today. The first schedule contributes to that goal by removing the longstanding requirement that a tax deductible gift must have a value of at least $2 before a taxpayer can claim a deduction.

Under Australia's income tax laws, donations to deductible gift recipients are generally tax deductible, provided that they meet certain criteria—including, until now, that the gift be worth at least $2. That threshold has been in place for almost a century. It was introduced in 1927, when charitable donations were processed manually, receipts were handwritten and record keeping imposed a far greater administrative burden than it does today. When Australia adopted decimal currency in 1966, the existing threshold of one pound was simply converted to $2, where it has remained ever since.

The way Australians support charities has changed considerably over that time, along with many other things. Increasingly, donations are made through digital platforms, mobile applications and electronic payment systems. Many Australians now choose to round up purchases at the supermarket checkout, or contribute small amounts through online transactions. These forms of microgiving have become commonplace, but the law has not kept pace with that. Removing the $2 threshold updates the tax system to reflect how Australians give today and removes an outdated restriction on charitable giving.

Importantly, this measure implements recommendation 4.1 of the Productivity Commission's Future foundations for giving report, which concluded that the threshold no longer serves its original purpose and should be abolished. The commission recognised that advances in technology have significantly reduced compliance costs associated with issuing receipts and administering small donations and that removing the threshold would better support modern forms of philanthropy, including recurring digital donations and 'round up' fundraising initiatives.

This reform also builds on the government's broader work to strengthen Australia's charitable sector, including streamlining the DGR system; establishing a new 'community charity' category; expanding the ACNC Advisory Board; and lifting distributions from giving funds, to give more support to charities sooner. The government greatly appreciates the important work and contributions made by charities and not-for-profit organisations across the country and will continue to support the sector by making it easier for Australians to give. This reform builds on that foundation by supporting the government's goal of doubling philanthropic giving by 2030, including making it easier to recognise small, everyday acts of generosity. Just as this change updates the system to reflect how Australians give today, the next schedule focuses on ensuring our tax administration systems keep pace with how Australians earn and report income.

Schedule 2 focuses on improving the administration of Australia's tax system by simplifying reporting obligations by closely held trusts. Under the current arrangements, trustees are required to separately report the tax file numbers of beneficiaries to the Commissioner of Taxation. This duplicates information that is closely connected to the trust's annual tax return and creates an additional administrative process for trustees and their advisers. This bill removes that duplication by requiring beneficiary tax file numbers to be reported through the trust tax return itself. This change also forms part of the government's broader Modernisation of Tax Administration Systems program. Historically, trust income reporting has lagged behind individual and company tax systems with limited prefiling and more manual processing. By integrating this information into the tax return itself, we are moving towards a more automated system—one that reduces duplication, shortens processing times and improves the accuracy of assessments. It is a practical step but one that will deliver real benefits at scale across the system.

Although this is a relatively modest administrative change, it forms part of the government's broader program to modernise tax administration systems. Improved reporting will expand the Australian Taxation Office's prefiling capabilities, improve data quality, reduce manual processing and lower compliance costs for trustees, beneficiaries and tax practitioners. It will also assist the commissioner in ensuring that the correct amount of tax is assessed while making compliance simpler for taxpayers who are already meeting their obligations. Modern tax administration should reduce unnecessary paperwork, make greater use of digital technology and allow taxpayers to meet their obligations as efficiently as possible. These reforms contribute to that objective.

Schedule 3 makes a series of minor and technical amendments across Treasury portfolio legislation. These amendments do not introduce new policy. Rather, they ensure existing legislation continues to operate as parliament intended by correcting drafting issues, addressing unintended outcomes and improving the operation of existing laws. Good legislation requires ongoing maintenance. As financial markets evolve and legislation interacts with other acts over time, technical amendments become necessary to ensure the law remains clear, consistent and fit for purpose.

Among other changes, the bill enables a public trustee acting on behalf of a client with a self-managed superannuation fund to approve the appointment of a trustee or director where appropriate. The schedule also makes several technical amendments across Treasury legislation that improve its operation without altering underlying policy settings. These are sensible housekeeping measures that contribute to a more effective legislative framework.

Finally, schedule 4 amends the research and development tax incentive to exclude activities related to tobacco and gambling from eligibility. This exclusion will apply broadly across all forms of gambling, whether digital or in person, and across all tobacco related products. This is a clear and deliberate policy choice. The research and development tax incentive represents a significant investment of public funds designed to support innovation that lifts productivity, strengthens competitiveness and delivers long-term economic benefit. It is therefore appropriate that this support be directed towards activities that generate positive public value. Tobacco and gambling are associated with well-established health and social harms. This bill ensures that taxpayer support is not used to subsidise research that expands or enhances those activities. Tobacco use remains one of the leading causes of preventable illness and death, placing significant pressure on individuals, families and the health system at large. Gambling harm, if too widespread, is deeply damaging, contributing to financial stress, relationship breakdown and serious mental health impacts. These are not emerging or uncertain risks; they are well-established harms felt in communities across the country. This bill ensures that taxpayer support is not used to subsidise research that expands or enhances those activities.

More broadly, this reform reflects a principle that runs throughout this bill—that public investment should be targeted, sustainable and align with long-term outcomes for the Australian community. Importantly, the bill preserves support for research-undertaking solely for harm minimisation purposes, including efforts to reduce smoking and gambling harm. That strikes the right balance—supporting innovation where it improves outcomes while ensuring public funding is not directed towards activities that undermine them. In doing so, this measure ensures that the research and development tax incentive continues to support innovation that contributes to a stronger, healthier and more productive economy.

Taken together, the measures in this bill improve the efficiency of Australia's taxation system, reduce unnecessary compliance, modernise legislation to reflect technological change and ensure public resources are directed towards activities that strengthen the economy and benefit the community. That is how you build confidence in the tax system, improve productivity and make governments work better for the people that serve them.

These reforms, as I mentioned, also sit alongside the government's broader tax agenda—an agenda that has delivered tax cuts for every Australian taxpayer in our first term, this year and next. That includes introducing a $1,000 instant tax deduction to simplify the system and provide cost-of-living relief to around 5.7 million Australians. It includes strengthening multinational tax integrity through measures like public country-by-country reporting and the introduction of a global and domestic minimum tax; reforming the petroleum resource rent tax to ensure Australians receive a fair return from our natural resources; and better targeting tax concessions, including in superannuation, to ensure they remain sustainable over the long-term.

Good tax policy is not just about raising revenue; it is about building a system that is fair, efficient and trusted—a system that reflects today's economy and supports the one we are building for the future as well. This bill is a practical step in that direction, and I commend the bill to the Senate.

Sarah Hanson-Young (SA, Australian Greens) | Link to this | Hansard source

I rise to contribute to the debate on the Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026. While there are many schedules in this bill, and I won't speak to all of them—I have colleagues like Senator Allman-Payne who have moved some amendments in relation to other schedules—I'm particularly interested in the impact this bill will have on the gambling industry, specifically under schedule 4.

I will move amendments to this bill, because, as it is currently written, tax incentives will still be allowed for activities relating to harm minimisation for gambling and tobacco. Let me be plain about what that means; it means that taxpayers' money, public funds, will be able to be accessed by the gambling industry under the R&D system, if they can dress it up as part of harm minimisation—really? I'll tell you what would be the best thing to reduce harm in the gambling industry—to stop them being able to advertise and push this dangerous product down the throats of young people and those with gambling addiction. That's what you do to minimise harm; you get rid of the advertising. You do what the experts have said. You don't turn around and say, 'Oh, here, gambling industry, here's some taxpayer funded money so you can look like you're reducing harm.' People will be shocked that this is in here. That's why I will move these amendments, to ensure that the gambling industry and the tobacco industry cannot access these R&D provisions under the bill.

Let's be clear, both the gambling industry and the tobacco industry profit from harm. That's the whole point of them. Their products are harmful and they make money off that. Why on earth would we be allowing them to continue to dress up their activities under harm minimisation and get incentives from the taxpayer? Harm minimisation research should be funded by the bloody industries, not by the taxpayer. That's why I argue, strongly, that the government here should accept this amendment. Otherwise, it exposes your total response to the gambling industry and the tobacco industry if you continue to allow it to be in there. Are you serious about tackling the harms of gambling or not?

While I was preparing for the debate on this bill today, I thought I'd have a look at some of the other amendments to this piece of legislation that have been circulated in the chamber today. What did I find? I found an amendment that has been circulated by the One Nation party that goes in the opposite direction. They want this parliament and this chamber to open the floodgates to the gambling and tobacco industries. They want them to access public money and support incentives for R&D projects for gambling and tobacco. That's One Nation. One Nation are in here today—quietly, sneakily—doing the bidding, the dirty work, of the gambling and the tobacco industries. I tell you what, Paul Hogan was right. Pauline Hanson is a pelican! Except that might be a bit offensive to Mr Percival.

One Nation come in here and purport to care about everyday people in this country, to care about what's going on in Australian households and in families. Well, we have heard over and over and over again of the harm and suffering that happens within Australian families and households because of the gambling industry. We know our health system continues to be placed under pressure due to the harm that the tobacco industry has on regular Australians, young and old.

One Nation don't care about the wellbeing, the safety, of Australians. They are in here today doing the bidding of the gambling industry and the tobacco industry, and they think taxpayers should fund it. On the one hand, One Nation carry on about how they want government out of people's lives but, on the other hand, they want you, as the taxpayer, to fund research and development for the gambling and tobacco industries. Who really calls the shots? It's not Australian families; it's the dodgy gambling and tobacco companies, it's Gina Rinehart, it's the billionaires. Is there anyone who can't buy their way into One Nation? If they've got enough money, if they've got enough dodginess to go about it, it seems Pauline Hanson and One Nation are prepared to do the dirty bidding of anyone if they're willing to pay.

Anyway, that amendment should go down in a screaming heap. This chamber should vote it down unequivocally and send One Nation packing. One Nation should also be forced to explain to the Australian people why they come in here and use their time in the chamber doing the bidding of the gambling industry and big tobacco. Why do they genuinely believe that the Australian taxpayer should be funding the research and development of these industries that harm Australian families, that cause chaos in our health system, that strip money out of the pockets of households struggling under the cost-of-living pressures? It says everything that One Nation is more interested in spending taxpayer money on helping the gambling industry and big tobacco than it is in helping families.

Let's remember Senator Pauline Hanson stood at the Press Club two weeks ago and said that Australians shouldn't be getting publicly funded child care. Child care is not good, according to Pauline Hanson—and Australians don't deserve paid parental leave either, but the tobacco industry and the gambling industry should be able to have a free for all on our taxpayer funds. Talk about absolute hypocrisy! We know who calls the shots for Pauline Hanson's One Nation party—or Pauline Hanson's 'Hate Nation' party as it tends to be. It's the tobacco industry. It's the gambling industry. It's the billionaires.

Oh, and she also wants to hand over parts of the Australian countryside to Elon Musk. She wants to flog Australia off to Elon Musk. The list goes on and on. But, on this particular amendment, we should throw it out, throw it in the bin, and force this party to be honest about who's really running its agenda. They're not doing it for Australian families. They certainly are not.

I move:

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

(a) notes that:

(i) Australians lost $31.5 billion to gambling in 2022-23, the highest per capita losses globally,

(ii) smoking kills more than 24,000 Australians every year, or more than 66 Australians every day, and

(iii) the gambling and tobacco industries have never worked in the interest of Australians' wellbeing and have no genuine interest in harm minimisation given their business models are profiting off putting vulnerable Australians in harm's way; and

(b) calls on the Government to:

(i) completely exclude the gambling and tobacco industries entirely from the research and development tax incentive, and

(ii) listen to community calls and protect vulnerable Australians from gambling harms by implementing all recommendations from the House of Representatives Standing Committee on Social Policy and Legal Affairs report 'You win some, you lose more'(known as the Murphy report), which was tabled three years ago".

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

Senator Hanson-Young, I will just point out that, whilst I do not believe you are in breach of 193(3), I think comparing other senators to animals is likely to get us all into trouble.

Sarah Hanson-Young (SA, Australian Greens) | Link to this | Hansard source

To clarify that point, it was Paul Hogan who compared Pauline Hanson to a pelican.

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

It doesn't matter who did it, Senator Hanson-Young. The fact is you said it in the chamber. I'm not asking you to withdraw it. However, in the future I think senators should avoid comparing other senators to animals. I do not think that is parliamentary.

Kerrynne Liddle (SA, Liberal Party, Shadow Assistant Minister for Health and Aged Care) | Link to this | Hansard source

Senator Canavan is right: the Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026 and the process that led to it coming into this place are nothing like the title of this bill. It was not efficient, nor should it be trusted. The name of the bill is deceptive, to say the least.

The coalition, however, will not stand in the way of this bill's passage. It is part of the Albanese Labor government's so-called tax reform package but is truly yet another toxic tax on hardworking Australians. No fewer than 50 times did the Prime Minister say that he would not do this, yet he did exactly what he said he would not do. The Prime Minister didn't just change his mind. All of us have been hoodwinked. What we have here is more rushed legislation that follows a sham legislative review process—only two days of review—for major changes to our tax system. We heard from ACOSS, the Australian Council of Social Services, and the unions on tax reform.

On full display is contempt for the process of this parliament and, worse, contempt for people who will be affected—that is, most Australian taxpayers, hardworking Australian taxpayers. Australian taxpayers will be impacted most because they work hard for every dollar. These are the Australians that choose to forgo spending their money at the cinema, on a car or on something else. Instead, they invest it, with the hope of financial return for the decisions that they've made.

There are many words that could describe what this government has done in promising the Australian people it would not do what it has just done. Australians know a broken promise when they see and hear it, but it will take time for the true consequences of this so-called tax reform to become clear. In my home state of South Australia, we've watched the cost-of-living pressures bite harder than almost anywhere else in the country. The reality is that our state has a different demographic and it will mean the impact will be felt strongly in our state.

Make no mistake: this bill is bad, but the coalition is not saying no to everything in it. The coalition does not oppose excluding tobacco and gambling activities from the R&D tax incentive. That incentive has traditionally been broad based and industry neutral. If you are undertaking eligible R&D activity, you qualify—regardless of whether your business happens to be favoured by the government or not. That neutrality matters for business confidence. And it is bad news when a government starts picking winners and losers. We support this schedule, but we want to be clear: we do not want our tax system to become full of political decisions about who should be winners and losers.

What the government won't admit with this change is that it has lost complete control over the illicit tobacco industry nationwide. And there are no tobacco companies in Australia currently receiving the R&D tax incentive. So this exclusion does nothing to address the actual problem; it is simply there to paper over this government's own abject failure. This is one of the biggest public policy failures in Australian history. In the 2022 budget, the projected tobacco excise for 2025-26 was $13.3 billion. By the 2025-26 MYEFO estimate, collections had fallen to $7.3 billion—a reduction of $6 billion in that single year alone. It has gone down even further since the budget, not so long ago. More Australians are smoking, not fewer, because illicit tobacco has made cigarettes far cheaper than they have been in recent history. That is now showing up clearly in wastewater data right around the country, including in my home state of South Australia. The result is: a government that has lost billions in tax revenue—revenue that could have funded genuine cost-of-living support without needing to legislate yet more taxes on hardworking Australians—instead, having run out of money through its own mismanagement, has come after yours. While we lose billions in revenue under Labor, those in organised crime are just having a ball; they're having a great time in the black market—making heaps of money!

An essential change within this bill is the increase, also, in the Medicare levy low-income threshold, so the levy keeps pace with inflation. The coalition, of course, supports this. Without it, people would effectively be hit by bracket creep on the Medicare levy surcharge. We know how much Labor likes the sneaky tax grab called bracket creep. But here is what's revealing about this government's priorities. This change is itself an admission of the damage that bracket creep does to ordinary Australians. If the government understands that bracket creep on the Medicare levy needs fixing, why does it reject the coalition's Tax Back Guarantee, which would address bracket creep permanently across all income tax thresholds? Just ask yourself that question: why would it push back on that? You cannot claim to understand the unfairness of bracket creep in one schedule of a bill while refusing to fix the same unfairness everywhere else—unless your government has simply become reliant on that quiet, sneaky, creeping tax to fund its own mismanagement.

The coalition's Tax Back Guarantee will ensure Australians are not taxed more simply because of inflation. From 2028-29, the coalition will index the bottom two income tax thresholds to inflation, fully protecting 85 per cent of income earners, with relief of around $250 in year 1, growing to more than $1,000 a year by year 4 for a typical worker on $70,000. From 2031 to 2032, we will index the top two thresholds as well. This is generational, bold reform. It is fair, simple and honest. This is not the fake reform dished up by Labor under this dirty bill. It respects taxpayers' money rather than secretly stealing it by stealth through an inflation tax every year, and it will back Australians, including the small-business owners across Australian suburbs and regions who work hard, take risks and invest in their own future.

As Deputy Chair of the Economics Legislation Committee, I did not have to imagine the damage these broader budget tax changes are causing. I heard it directly in hearing after hearing—submission after submission—from the very businesses, investors and industry bodies this government claims to be governing for. The Property Council of Australia said, 'The combined effect of these measures is to increase uncertainty for the businesses and investors that develop, own and invest in Australia's built and city-shaping assets.' They warned:

At a time when governments should be focused on improving productivity, lowering delivery costs and removing barriers to investment, the Budget instead places new tax burdens on capital formation, enterprise and aspiration.

And they couldn't tell us how productivity—the one thing we need to improve in this country—relates to these reforms. That's because these are sham reforms. They will have no impact on productivity, and we heard that over and over again from experts in the sector.

Master Builders Australia, together with the Property Council of Australia and the Real Estate Institute of Australia, commissioned an independent piece of modelling on the overall impact of this budget. They found that the overall effect of the federal budget will see new home construction go backwards and rents rise higher than anticipated. You'd think they'd know about it. They're the people that build the houses, rent the properties and sell them. I think they have more of an idea of what impact this is going to have than the people sitting on the other side of this chamber.

Over the next four years, this budget will cause new housing supply to fall by more than 8,700 dwellings, rents to increase by up to $9 a week, GDP to reduce by $864 million and construction jobs to fall by more than 3,800. We heard it over and over again. They'd done their homework, unlike those on the other side. If you'd have heard the Treasurer's interview on the weekend—he couldn't even answer basic questions about his own budget and the bill. We see the Greens over there, who talk really big about grandfathering—the thing that protects the Prime Minister's own assets and his own investment plan—and now we don't hear it at all. Instead, they came up with self-managed super funds—'Let's go after them instead; let's restrict them' just to get the dirty little deal they got with the Labor Party. That dirty deal will have an impact on a significant number of Australians, changing the investment plans and the planning of Australians. On this side, we know that uncertainty is a killer of investment. Uncertainty is a killer of aspiration. That's the blueprint of the Australian Labor Party. This is friendless when it comes to issues of productivity, when it comes to issues of aspiration and when it comes to opportunity, including for young people.

The Housing Industry Association warns the committee that progressing such significant change so rapidly risks unintended consequences. Who'd have thought! Here we have the Treasurer, who's thinking about further changes because of this shoddy bill that he brought into this place, and a committee process that wasn't given the opportunity to explore these issues as it should, where the submissions that were made by people to that hearing weren't even uploaded by the time this bill was brought into this place. That's the disrespect the Labor Party has not just for this place but for the Australian people—hardworking Australians. As for the Greens, down the end, they couldn't care less. They're just happy to get a dodgy, dirty deal.

The Australian Chamber of Commerce and Industry told us they were alarmed by the government's approach because there was improper consultation with affected stakeholders and there wasn't a clear understanding of the consequences. Well, spoiler alert—even the Treasurer himself doesn't know about the unintended consequences. He's still working it out, still considering it. The Business Council of Australia put it most bluntly of all: the consequence of this bill, including the impacts on investment, have not been properly assessed by the sector, it's been needlessly rushed, and that's reckless.

The Business Council reminded us that the only sure way to reduce the price of housing is to increase the supply of new dwellings and reduce the cost of constructing them. Just about everything in this budget does the opposite. I sat in those hearings listening to industry body after industry body deliver the same message, with slightly different words: this process has been rushed, there was poor consultation, and the consequences of those actions belong to the Labor Party and will be passed on to ordinary, hardworking Australians who want to invest in their futures and who want to invest the dollars they worked hard to earn to make more, if they've been lucky enough to do so. South Australians looking to build a first home, to find an affordable rental or to see new housing supply finally catch up with demand in our state will feel the effects of this recklessness for years to come.

This measure is expected to save the budget $218 million over the forward estimates and $63 million a year ongoing. We need to make savings where we reasonably can, and the coalition is ready to support this government when it does—when the ideas put forward are sensible, when they've been properly explored. That's sensible. The removal of the outdated $2 minimum threshold for tax deductible donations? Well, of course that makes sense.

What doesn't make sense is the rushing through of this legislation—legislation that Australians did not vote for. They didn't vote for higher compliance costs, they did not vote for a tax system riddled with political winners and losers, and they did not vote for a government whose own budget—on the evidence of the Property Council, Master Builders Australia, the Housing Industry Association and the Australian Chamber of Commerce—will shrink housing, push up rent, cost jobs and, all the while, mean industries and Australians will suffer. (Time expired)

Jana Stewart (Victoria, Australian Labor Party) | Link to this | Hansard source

Philanthropy plays such a vital role in Australia's society. Every day, charities, community organisations and non-profits provide support where it's needed most. Whether it's helping families who are experiencing hardship, funding research, protecting our environment, supporting the arts and culture or responding to natural disasters, the work of these organisations strengthens communities and improves lives right across our country, and they themselves are supported by the generosity of Australians, often through many small donations.

The Albanese Labor government is focused on delivering practical and sensible reforms to our taxation system. The Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026 amends the Treasury legislation to support philanthropic giving and strengthen the integrity of tax administration systems. It removes the requirement that a donation to a deductible gift recipient be valued at $2 or more before the donor may claim the tax deduction, and this is really important because it recognises that every single contribution matters.

These reforms are not isolated technical fixes; they are part of a systemic effort to lift productivity right across the country. After a wasted decade of stagnation under the Liberals and Nationals, we are targeting the practical barriers that hold businesses, communities and individuals back. By making it easier for Australians to give, we are strengthening the social economy, which is such an important contributor to national productivity and wellbeing. Turning around a decade of weak productivity requires action at every level. From major economic reforms to practical changes, that's exactly what this government is delivering.

This bill also amends the eligibility criteria for the research and development tax incentive to exclude activities related to gambling and tobacco—really sensible changes. This kind of research and development for gambling and tobacco can exacerbate serious health risks, addiction and associated harms. The exclusions will apply broadly, capturing research and development related to all types of gambling, whether these occur digitally or in person, as well as any tobacco products. Excluding these activities ensures that taxpayers are not subsidising this kind of research. That is really important, and I think Australians will be very, very pleased to learn about that. Where activities are for the sole purpose of harm minimisation, such as helping people to stop smoking or gambling, these activities remain eligible to receive support through the research and development tax incentive.

The Albanese Labor government is also increasing support for low-income households by increasing the Medicare levy low-income thresholds for singles, families, seniors and pensioners by 2.9 per cent. This is in line with recent movements in CPI. In practical terms, it ensures that low-income households continue to be exempt from paying the Medicare levy or will pay a reduced Medicare levy rate if their incomes have increased in line with or less than recent movements on CPI. More than one million low-income earners are expected to benefit from these increases in 2025-26.

It's clear the Albanese Labor government is focused on delivering practical and sensible reforms to our taxation system. The measures presented here today only build on our reforms to deliver a fairer, simpler and more sustainable tax system. They include delivering three tax cuts for every single Australian taxpayer, one in our first term, one this year and one next year; implementing a $1,000 instant tax deduction starting next financial year; making the tax system simpler and delivering more cost-of-living relief for 5.7 million taxpayers; boosting the low-income superannuation tax offset to help deliver a more dignified retirement to 1.3 million Australians, while also better targeting tax concessions on large superannuation balances over $3 million; and a targeted multinational tax integrity package to ensure that large corporations meet their tax obligations in Australia. These changes will support everyday Australians by putting more money back into household budgets so they can focus on things that matter most.

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

Senator Stewart, please resume your seat. Pursuant to order, the time for the second reading contributions on this bill has expired.