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

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

That, in the opinion of the Senate, the following is a matter of urgency:

The Albanese Labor Government's decision to impose toxic tax changes that can punish widows, divorcees and victims of domestic violence, despite being warned of the consequences, and the need to axe these taxes.

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.

Michaelia Cash (WA, Liberal Party, Leader of the Opposition in the Senate) | Link to this | Hansard source

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The Albanese Labor Government's decision to impose toxic tax changes that can punish widows, divorcees and victims of domestic violence, despite being warned of the consequences, and the need to axe these taxes.

The question the Australian people are currently faced with is: what kind of Prime Minister legislates a tax that hurts widows—in other words, people who have lost their husbands—divorcees and, I think almost worse than that, women escaping domestic violence. Sadly for the Australian people, the name of that prime minister is Anthony Albanese.

Quite frankly, Labor—the Albanese Labor government—were clearly warned by the Senate and others prior to this legislation going through, and they still rushed it through the parliament. They still forced a vote in the parliament. Of course the Australian Greens were there every step of the way. And what did they do? They actually legislated, as I said, a tax that hurts widows, divorcees and women escaping domestic violence.

Sadly, this is no longer an abstract debate about some disastrous tax policy. This is about the Albanese government, those opposite, deliberately voting for a tax that is imposed upon Australians at the most vulnerable time in their lives. A woman whose husband has died will be taxed more by the Albanese government. A woman leaving a relationship, a woman getting a divorce, will be taxed more now by the Albanese government. A woman trying to escape domestic violence, separate her finances and rebuild her life with her kids—that's the real-life example that is now all over the newspapers—has been taxed more by the Albanese government. That is just sick.

But there's worse. You've got to ask yourself: how did the Prime Minister of Australia allow this to happen? How did a Labor government that, along with the Australian Greens, never, ever stops lecturing Australians about fairness, compassion and standing up for the most vulnerable in society—how in God's name do they then legislate a tax that affects the most vulnerable in society: widows, those escaping domestic violence, divorcees. I've got to say to those on the other side, to the Labor women, and even the Greens down there, who also like to pontificate, how did the self-proclaimed 'party of women' legislate a tax that creates another financial obstacle for women who are escaping domestic violence? That is just sick, quite frankly, which now appears to be the hallmark of the Albanese government.

What's worse is that Mr Albanese and the Labor Party were warned. Concerns were raised about the impact of these laws and what they could mean for property ownership changes because of death, divorce and family breakdown. The government knew that there were problems, but what did the Prime Minister do? He legislated those problems anyway. Worse, they pushed those laws through, and Labor senators voted for them.

I would have thought that we'd return to the parliament today—particularly now that there is a woman who has been affected directly by these taxes—and they'd at least have the decency to legislate that change. Get rid of the tax on the widows. Get rid of the tax on the divorcees. Get rid of the tax on, in particular, women who are escaping domestic violence with their children. Instead, when we raised it earlier today, they had the audacity to sneer at us. You should be ashamed of that.

Where's your Minister for Women? Senator Gallagher is always out there saying what a great job she's doing—seriously, legislating a tax on these people? Where's Senator Wong? She's another one who likes to pontificate. Yet again—Senator Wong, you voted for this tax on women. It is a disgrace. Let me tell you right now, if you don't abolish it, the coalition will.

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

I rise to oppose this motion. It's yet another Liberal Party scare campaign dressed up as concern. They have taken some of people's hardest moments—the death of a partner, the end of a relationship or escaping family and domestic violence—and, in fact, tried to use them as cover to defend an outdated tax concession for property investors.

At the age of 17, I joined the Western Australia Police Force. I've worked alongside women and families living through family and domestic violence, and the stories that women have trusted me with have never left me. The questions they ask themselves when leaving are: 'Can I keep a roof over the head of my kids? Can I afford to start again? Will I be safe?' For someone who's lost a partner, a property may be the home they built together that holds a lifetime of memories. These are deeply personal moments. To strip away the humanity and use them to defend outdated tax concessions is absolutely beneath this Senate.

I want to be very, very clear. The Albanese Labor government will not allow victims, a widow and someone going through relationship breakdown to lose existing negative-gearing treatment simply because ownership of a property transfers. We said that we would address this in the next tranche of legislation, and that is exactly what we are going to do. Last week we released the draft legislation ensuring that property acquired from a spouse through inheritance or relationship breakdown will retain access to negative gearing if it was owned on budget night, and that includes transfers under recognised court orders, court approved agreements and binding financial arrangements.

Capital gains tax rollover interactions will also be addressed in the further legislation. These reforms do not commence until 1 July 2027. The family home remains exempt from capital gains tax. Superannuation and small-business CGT concessions are not affected. And for other inheritance there is grandfathering that will generally end where there is a need for genuine change in ownership consistent with longstanding tax arrangements. That is a reasonable and principal distinction. Legislating major reforms in tranches is a standard practice in this place. We said we would consult in good faith, and the exposure draft is open until 21 of August. Treasury have consulted banks, which confirmed that they can account for the policy in lending decisions.

So let's put those scare campaigns aside and deal with the facts today. There is no widow tax. There is no divorce tax. There is no tax on escaping violence. Senator Cash had a copy of the exposure draft. She had the protections right in front of her and she signed this notice for this debate anyway. On 5 August the shadow Treasurer, Tim Wilson, demanded more consultation, and now the coalition is condemning the reforms before the consultation has even finished. They demand a consultation and then they run a stunt like this to try to shut it down. That is the worst type of hypocrisy I have ever seen. Those opposite are fighting to preserve a system that makes it easier to buy your 10th home than your first, a system that has left fewer than half of the Australians aged between 25 and 34 owning a home. That system is not sacred. It is not fair. Our reforms direct negative gearing for future investment towards new homes, placing a blunt capital gains tax discount with indexation, and they are expected to help 75,000 Australians become homeowners. They are also helping to fund tax cuts to 13 million working Australians.

If the coalition wants to come in here and debate which party supports Australian women then let's have that debate. Since 2022, the Albanese Labor government has invested more than $4.4 billion under our National Plan to End Violence against Women and Children, and that investment has supported more than 1,400 organisations and helped 444,000 women experiencing family and domestic violence. That is the fact.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) | Link to this | Hansard source

It gives me a great deal of pleasure to debate the fact that the Labor Party talks a lot about hypocrisy on our side of politics. The greatest hypocrites of all is the government who say they care about women, who say they care about domestic violence victims, who say they care about making sure they get first home owners into a home, yet their housing policy and their budget are delivering outcomes in direct opposition to that. The level of economic incompetence from this government knows no bounds. I have been in parliament a long time. I am yet to recall a period of time, whether in government or in opposition, when we were still talking about the mistakes in a federal budget in August. The reality is this government's economic incompetence has seen us now chasing to fix an economic mess of its own making, where its own legislation means, if you are going through a financial settlement as a divorcee, you are actually going to be subjected to the capital gains tax changes. If your partner dies, that estate will also be going through the capital gains changes. Instead of consulting and getting it right before they make it l-a-w law, we are still here eight weeks, 12 weeks—it'll be 16 weeks before we get a chance to fix it.

And that is why Australians are furious with Anthony Albanese and the Labor Party. They are not up to the job. Inflation's through the roof. Interest rates are higher than they need to be. They blame the Middle East, but, when you look across all developed countries, inflation is higher here than it is in other developed countries or like nations, and for longer than it needs to be. That is a fact, and it is because of the Labor Party's inability to manage their own spending.

As I said earlier, if a couple is separating at a time when they still have a very high mortgage to pay off, or if the couple decides as part of the divorce settlement to retain the family home in the name of one person, maybe to make sure the children of that partnership continue to remain in the family home, limiting the destabilisation of those young people—they might want to put the house up for rent—the divorcee will lose access to grandfathered negative gearing and capital gains tax laws. If the couple were already renting out an investment property, again, after the separation and transfer of assets into one name, the divorcee—potentially and often the woman—will lose access to the negative gearing arrangements available to other taxpayers who owned their home prior to 7 pm on 12 May 2026, budget night.

The government pretends this is an unintended consequence of their law. Again, really! Surprise! Not responsible! But we now know that they were advised that this would be a consequence of the decision they took, and they didn't care, because they thought no-one would notice. The reality is that property investors, in the main, are nurses, teachers and coppers—that's the data—trying to prepare a future and retirement options for themselves. Those are the people that are investing in property. And they are the people that were lied to by this Prime Minister and this Treasurer 50 times before the last election when they were told that this would not be part of—

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Senator McKenzie, resume your seat. Minister?

Anthony Chisholm (Queensland, Australian Labor Party, Assistant Minister for Regional Development) | Link to this | Hansard source

I'd ask that Senator McKenzie withdraw.

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Senator McKenzie, please withdraw.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) | Link to this | Hansard source

What am I asked to withdraw? This is a fact.

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Please take your seat and I will tell you.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) | Link to this | Hansard source

You lie—

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Take your seat, Senator McKenzie. I think you just used a word that you know is inappropriate. If you recalled for one second what you said, you would know appropriately responding to my request is a plain and simple withdrawal.

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) | Link to this | Hansard source

I withdraw.

The Australian public was sold a pup when the Prime Minister stood up 50 times and said there would be no changes to negative gearing. And what happened? This is why Australians are furious: if they had known, they wouldn't have voted Labor. They would have gone into the voting booth and actually been able to assess the two parties of government and what they were offering. Instead, they were sold falsehoods— (Time expired)

Richard Dowling (Tasmania, Australian Labor Party) | Link to this | Hansard source

There are two facts that Senator Cash hopes this motion will obscure. Firstly, the government is already addressing the precise issue she describes. Secondly, her coalition went to the last election promising to increase income tax for every Australian taxpayer.

Let's begin with the substance. On 25 June, the government committed in this Senate to address property transfers arising from inheritance or relationship breakdowns. On 4 August, Treasury released the detailed exposure draft, and consultation remains open until 21 August. It preserves the existing negative gearing treatment when a property owned on budget night passes to a surviving spouse or co-owner or is transferred following a relationship breakdown. These changes do not operate until 1 July 2027.

Under the government's published design, no new tax is triggered simply because someone is widowed, separates or escapes a violent relationship. The draft confirms that the property's grandfathered treatment follows the relevant transfer. So Senator Cash is demanding that we axe a penalty we have already published a legislative fix to prevent almost a year before the rules even begin. Only last week, the shadow treasurer asked whether the government would allow 'more than two days of consultation'. Today, Senator Cash wants us to stop consulting altogether and axe the reform. For the coalition, consultation is apparently vital, right up until the government actually consults.

But let's step back and just wonder why these broader reforms are actually necessary. Since 1999, house prices have risen more than twice as fast as average full-time earnings. Between 2001 and 2021, homeownership among households aged 25 to 34 fell by seven percentage points. Our reforms keep negative gearing for new builds, grandfathers existing properties held on budget night and directs incentives towards additional housing supply. It's expected to enable another 75,000 Australians to own a home over the next decade. More than 13 million workers will also receive a tax offset of up to $250, and, separately, 6.2 million workers will benefit from the standard deduction, saving an average $205, with more than half of those being women. So these are reforms that reward work, support new housing and give younger Australians a fairer chance.

Contrast that to the coalition's tax record. At the last election, Labor had legislated further tax cuts for around 14 million taxpayers. The coalition voted against them and then lodged election policy with the independent PBO to repeal them. The coalition's own costed election policy would have increased the lowest income tax rate from 14 per cent to 16 per cent, hitting some of the lowest paid Australians and costing them up to $536 more every year. Taxing the lowest income Australians was their stated official policy. By the way, there were no exemptions for widows, divorcees or victims-survivors of domestic violence. They were captured; they were going to cop a tax increase along with every other Australian. If they earned taxable income, the coalition planned to make them pay more. That's not an allegation. It's their own costed election policy.

Senator Cash invokes victims-survivors. This government's commitment is measured in action. More than $4.4 billion has been invested since 2022 to deliver the National Plan to End Violence against Women and Children. People facing bereavement, separation or violence deserve protection. They should not be deployed as political cover for preserving a tax concession. The specific issue is being addressed. The broader reform makes housing fairer, supports new supply and cuts taxes on work. Labor will protect affected Australians and get the details right. The coalition wants to protect the status quo and erase its own record in proposing higher taxes for every taxpayer. That is the real contrast before the Senate, and I oppose this motion.

Jane Hume (Victoria, Liberal Party, Shadow Minister for Employment and Industrial Relations) | Link to this | Hansard source

If you really want to get up the Labor Party's nose, you only need to use one word, and that is 'mean'. If you call the Labor Party mean, they will squeal. They squeal every time. But that's exactly what the widows tax is. It is mean. It's a mean tax. It's a tricky tax. And don't for a second be fooled into thinking that it wasn't entirely deliberate. The widows tax imposed by Labor was no accident. There were plenty of chances for the Labor Party to fix it six weeks ago, when the Senate was sitting, when the original taxation legislation was being passed. But they chose not to. It wasn't an oversight; it was a deliberate act, and it was a mean, tricky act. More importantly, it was a failure of basic moral reasoning. But the Labor Party persisted.

It's a tax that catches people at their most vulnerable. Don't for a second let Labor fool you into believing that these tax increases are reform. They're not reform; they are tax increases. Labor's tax increases were supposed to grandfather existing investment properties, protecting them from changes to negative gearing and capital gains tax if they were bought before budget night. However, what this tax does is ensure that, if one owner dies or a couple divorces, the property is transferred to the other owner, and Labor treats that as a change in ownership, and that grandfathering—that protection—disappears. That's what this tax does. It was intentional. It wasn't an oversight. They had a choice, and they chose to inflict it upon the most vulnerable.

The extraordinary thing is that Labor clearly know that this is a problem. They know it's a problem because now they're saying that they're going to deal with it. They're going to deal with it by attaching it to another bill and then consulting on it. Yet every single other senator In this chamber is willing to change this now. They realise it's a problem. Labor has chosen to pass the bill with the widows tax still in it. Senator Cox was incorrect. There is a widows tax. It's no-one's imagination. It is there, and it is a divorcee tax and a tax on survivors of domestic violence. It's been deliberately chosen by the Labor government.

Labor had six weeks to produce a bill to remove this tax, and they've chosen not to. Instead, they've chosen to delay. They've put out an exposure draft, sent it out for consultation and bundled it with legislation that deals with trusts and other tax changes that they know that the coalition won't support. They've done this because they're doubling down on being mean and tricky. In the meantime, they're playing politics with people's lives—with women's lives. It's disgusting. It's an extraordinary way to deal with a problem that's affecting people who are grieving or going through a divorce, and it raises a very, very simple question for government: if there's no rush then why was there so much of a rush to impose it in the first place?

Now Australians are simply being told: 'Oh, don't worry. Trust us. We're going to fix this. Don't worry about it.' But how out of touch can you be? Australians don't rely on a law that might pass; they rely on laws that have passed, and you have passed a widows tax—a mean and tricky widows tax. Australians operate on what the law says today, not what the law might say tomorrow. A widow refinancing an investment property cannot simply say to her bank: 'Don't worry. The government say they're going to fix this eventually, so you don't need to worry about me.' It doesn't work that way. So the law needs to be fixed. It needs to be fixed immediately, and we will help this Senate chamber to fix it immediately.

I'd like to acknowledge Senator David Pocock's work on this issue. Just recently, he was contacted by a 44-year-old victim of domestic violence who was unable to secure financing for an investment property that she co-owned with her former partner and was due to receive as part of her divorce settlement. But she can't, because of the uncertainty that Labor created from its tax increases. So the coalition will work with Senator Pocock and the crossbench to remove this terrible tax, because we agree that it should not exist.

Labor says there's no rush. Well, there should be a rush. They should be rushing to fix this right now because, for Australians that are caught up in this mess, it's not a theoretical problem; it's a real problem. It's their lives. Australians shouldn't be punished by a tax system simply because their spouse has died. They shouldn't be punished by a tax system if they're escaping domestic violence or experiencing divorce. So Labor should stop delaying. It's hard to imagine a clearer example of a policy failing the people that Labor claim to protect. (Time expired)

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

This has been an embarrassing time to be an Australian, between the diplomatic incidents created by the Prime Minister's appalling discussion about the Japanese prime minister and then the general chaos of the economic mismanagement that we've seen since the budget. I think many Australians would say, 'Why is housing so buggered in this country?' and the answer is that this government has made it so much worse by giving us more tax, more regulation and more corruption than we've ever seen before in the housing system.

On the first point, on tax, the government has a deliberate design feature to reduce housing supply. They've got in their budget some sort of tricky offset. They say that they're going to have an infrastructure fund which may supply more homes, but they have a deliberate design feature to reduce by 35,000 the houses that would have been funded by individuals. I make that point—individuals. The government is against individuals investing to create houses for other Australians. They think this is a bad thing—it's bad for the individual—and they are desperate to help their friends at the union and industry super cartel to become landlords.

This is all part of their great Australian dream, trying to completely change the character of Australian housing. The chasing of individuals out of the housing market as investors is a top priority for this government. They think it's very bad that individuals should invest for their future because the only investment the Labor Party likes is when the investment is in a compulsory superannuation scheme which they can use to pilfer—and all their friends can get their snouts in the trough. This is the theory behind this budget: 'We want to chase out individual investors.'

Of course, on the way through, they've caused themselves a number of problems. What's been exposed is this widow's tax and a number of other technical issues, including the fact that the Treasurer—Dr Chalmers or whatever he calls himself now—has passed a budget bill ostensibly about housing taxes without a definition of what a new build is. What a joke of a country we've become! If this treasurer, this pathetic treasurer, had been the CFO of a company, he would have walked the plank years ago. His first tax policy on unrealised gains collapsed. His second tax policy on negative gearing and CGT has collapsed. What a joke! You pass a budget with a tax hike as the centrepiece and you have no idea what a new build is, which is just ridiculous. So they've got to come back and tidy this up. They say they'll fix up this widows tax. Let's see. I'd say they've been pretty callous about this. For the people that have had to suffer through these widows tax transactions, it's a terrible time because there's no certainty that they can actually get from their government because it hasn't passed this chamber.

Similarly, the government was desperate to pass their terrible budget. They came to the coalition, I imagine, and said, 'Look, would you like to pass our $77 billion of new taxes?' and we said, 'No, thank you,' so they went to the Greens. The Greens said, 'Yes, we would love to help you pass your $77 billion in new taxes on the economy, because we think that it's good to have more taxes on housing.' I'm sure that will solve the problem. Housing is already very heavily taxed, so more taxes will create more houses. The price the Greens party asked of the Labor Party was this: 'We want you to abolish the ability of SMSFs to borrow to invest in residential property because that's something that's hurting Cbus, hurting Australian Super and hurting all our mates. They're losing market share. We've got to stop that from happening because it's terrible that people would invest to purchase new properties off the plan and create new houses for other Australians. That's terrible.'

When the Australian people have to consider why rents are sky high and why affordability is in the toilet, it's because the government hates new housing. They've got a policy to tax it into oblivion. They've got a policy to cancel the ability of other Australians to provide rental stock for Australians. That is why we're in a terrible, terrible mess. As I say, it's been an embarrassing time to be in Australia, with this shambles of a budget and a prime minister who goes around the world embarrassing the nation by engaging in disgusting phrases and terminology that should be beneath the office of a prime minister. And this Treasurer, Dr Chalmers—I think he calls himself that now—needs to go back to do another PhD on actual economics so he can learn how to do a budget.

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

The question is that the urgency motion moved by Senator Cash be agreed to.