Treasury Laws Amendment (Tax Reform No. 1) Bill 2026

Mr TAYLOR (Hume—Leader of the Opposition) (12:34): The Prime Minister and this government have no mandate to raise taxes. Did they take these tax increases—these toxic taxes—to the last election? No, they didn't.

Of course he didn't, because the Prime Minister didn't have the guts. He knew millions of Australians would have voted against higher taxes had he done so. He knew that millions of Australians would have given this government the boot if he had done so.

So, instead, he misled Australians. Prior to the last election, this prime minister ruled out any changes to negative gearing and a capital gains tax, in his own words, 50 times. He ruled out changes, and now this prime minister is imposing these toxic taxes on Australians against their will.

I'll tell you what: it's arrogant—and Australians use colourful terms, adjectives, next to 'arrogant'. It's illiberal. It's a broken promise.

And this prime minister stands condemned. This government stands condemned, too. I say to the Prime Minister: call an election.

Let the Australian people decide whether or not they want to see these tax increases. I know they don't. If you don't have the courage to call an election now, we will make the next election a referendum on these tax increases.

One way or another, hardworking Australians will have their voices heard, and we will ensure that that is the case. Time and time again, this prime minister and this government have broken faith with Australians. Time and time again they've betrayed Australians.

He promised Australians they would be better off under his leadership, but they're not. Under Labor, Australia has experienced the biggest collapse in living standards of any developed country in the world. He promised Australians that their power bills would go down by $275.

Not even close: we've seen bills soar by 40 per percent. He promised Australians they would have cheaper mortgages. No way: a typical mortgagee in this country is paying an extra $30,000 in after-tax income—with increasing taxes, of course, under this government—that they didn't have to find before Labor came to power.

And now he's pushing ahead with his toxic taxes and he has broken the mother of all promises that he made, in his own words, 50 times. Labor's budget reminds Australians that this prime minister's word is never his bond. He leads a government that misleads and deceives on a daily basis.

It's a government that's tricky and sneaky, a government that says one thing and does another. This is a prime minister who has no reverence, no respect for the truth and certainly no respect for hardworking Australians. He is an oath breaker, and Australians know it.

Labor treats Australians like mugs. At the recent Victorian Labor Party Conference, the Prime Minister had the gall to describe his budget as 'pro-aspirational' and 'pro-supply'. I can understand that those behind me believe this is some kind of joke.

But the government thinks it can get away with portraying its toxic tax grab as addressing intergenerational equity. Australians aren't falling for Labor's ruse. They know that beneath Labor's weasel words is a budget that is a massive con job.

Let's first consider Labor's changes to negative gearing. The government's own budget papers show that its changes will reduce housing supply by 35,000—page 158—which snuck through the 400 staffers that those opposite have. In the end, the Australian people will work out the truth that these negative gearing changes will reduce the supply of housing in this country—the very simple truth that, if you tax something more, you get less of it.

It's pretty simple. This is a toxic tax on housing, and there will be fewer houses available for young Australians as a result of this tax. Beyond the budget papers, we now have independent modelling that verifies the ramifications of this budget, and I thank Master Builders, the Property Council and the Real Estate Institute for the work they've done, which they released last Friday.

Here's what it says: over a four-year period, new housing supply will fall by 8,700 and construction jobs by more than 3800, and rents will increase by $500 a year. The Treasury secretary has also been surprisingly upfront—I would expect that of an honest public servant—about how the government's budget will reduce housing supply. Ms Jenny Wilkinson was speaking last week at an Australian Business Economists forum, and she said the changes were 'more about changing the distribution of housing ownership, rather than addressing sort of an overarching sense, supply'.

She was honest about what was in the budget papers, page 158: it's going to reduce supply and increase rents. The government's own budget papers say this. Only in this government's world of Orwellian doublespeak can housing scarcity be dressed up, as they've attempted to do, as pro supply—Orwellian doublespeak.

Let's also consider the capital gains tax changes, the scrapping of the 50 per cent discount. This is again a toxic tax, pure and simple—a tax on savings, a tax on taking risks, a tax on having a go, a tax on some of the very hardest working Australians and a tax on Australians who are already doing it incredibly tough, who are working more hours for less as a result of an economy that is not working for some of the hardest working Australians.

It's also a tax on every asset class: shares, crypto, ETFs, small businesses, farms and more. And who's being whacked by Labor's taxes? Young Australians—whacked.

Australian trying to build a nest egg—whacked. Australian small business and family businesses—whacked. Australian startups—whacked.

Australian farmers—whacked. Tax, tax, tax—that's what this government believes in. They are going after Australians' money—some of the hardest working Australians, who are putting that money aside for the future, investing in their businesses, their communities and their future.

The government's CGT changes will shut down growth-enabling investment, they will obliterate opportunity and they will kneecap so many Australians. It's no wonder that we see Australians expressing their frustration. Some are doing it in satirical ways, and every day there are new AI memes depicting the Prime Minister as a business co-owner, a co-founder who never puts his shoulder to the wheel.

An opposition member: Asleep at the desk. Mr TAYLOR: Asleep at the desk. Of course, the Prime Minister dismisses these memes as misinformation and disinformation.

He and his government dismiss Australians' concerns because they are clueless about the impact of these toxic taxes because they haven't worked in small businesses. They don't understand how it works. They haven't got a clue, and that's because so many in Labor's ranks not only have not worked in small business but don't like it.

They don't like it, and there's a simple reason for that: they can't unionise it. Labor's toxic taxes are a war on aspiration, an assault on aspiration, a war on the very essence of being Australian and a war on the soul of our nation. They're an attack on the wealth creation that benefits all of us, and they will crush reward for hard work and the spirit of reward for hard work that underpins our nation's success.

And do you know what? Labor knows its budget is an aspiration killer, and that's why it's caving to carve-outs. That's why it's toying with compromises.

Since the budget, there's been talk of a carve-outs for tech startups. But what about for other businesses? What about hairdressers, tradies and fitness instructors?

Does the government consider such businesses unworthy of a carve-out? With all this talk of compromises, the government has unleashed absolute confusion, and we don't have any information on where the government might go with this. Just as it did with the Voice referendum, the government is avoiding the details, because the details really matter on this one, because they are going to impact on people's lives.

As far as the government is concerned, the details are an afterthought, and they're going to be left till after the legislation comes through. Frankly, the government has no idea what it's doing, and that's why we are not interested in carve-outs. We want these toxic taxes axed.

What is truly concerning about this legislation is the sheer power that it grants to the Treasury and the Treasurer, as I touched on a moment ago. If passed, these laws will permit an unprecedented level of ministerial discretion on tax decisions. As the Australian's Matthew Cranston pointed out, the Treasurer will be able to make no less than eight captain's calls on negative gearing and capital gains tax without bringing it through the parliament.

Not only did they absolutely refuse to take these toxic taxes to the last election; they don't even want to take them to the parliament. They're going to leave it to the minister. He's going to make decisions for them.

The Treasurer will be able to determine whether a home is classified as a new build. We know how this government works. The truth is irrelevant as far as they are concerned.

He will be able to exempt properties of his choosing from being negatively geared—up to him! He'll be able to stop investors. Given the leaks we've seen from those opposite, he's not going to want to talk to anyone else about it.

That's clear. He'll be able to determine which assets should pay capital gains tax and which should be exempted. In effect, the Treasurer can decide what's going to be affected and, more importantly, who is going to be affected and who will not be.

This is absolutely outrageous. The Treasurer wants these sweeping powers because he hasn't thought through his tax changes or, if there's a stray chance that he has, he doesn't want any accountability for them. They'll avoid any accountability at all.

Now, Jenny Wong from CPA Australia has said: I have never seen this many determinations in one bill … which shows that it has been rushed. … … … And given ministerial determinations don't go through the same scrutiny, this leaves the door open for further changes and that means less certainty. And, with less certainty, you get less investment, less increase in real wages, less productivity and less prosperity in this country—the exact opposite of what we need right now.

Stuart Broadfoot from K&L Gates has said: … they were not ready with the legislation, and not ready with the details, and they are trying to essentially ram through a system of legislation that hasn't had the required thought. The one thought they've had is they need to make a tax grab. That is the very clear thought but not much beyond that other than a willingness to hurt some of the hardest working Australians.

Barrister John de Wijn KC has said: It shouldn't be left to minister discretion to work out how it's going to be applied— well said! The Treasurer is seeking other powers, too. This one's extraordinary.

Through this legislation, he will have the discretion to reduce the government's $250 annual income tax cut where he sees fit. He can reduce it. It doesn't actually have to be $250.

Now, we want more than $250. I'm going to come back to that! But he can actually reduce it.

I mean, why would that be in there? I tell you what: nothing he says about why that's in there is credible, because you can't believe a word this treasurer or this prime minister says. This legislation is incomplete.

It trashes transparency. It trashes accountability. It is a power grab and an overreach.

It is an utter disgrace. Let me be clear. Australians need relief from the economic disaster that has been wrought on this country and our economy.

We support Labor's $250 annual income tax cut, but we want it to be bigger. We support Labor's $1,000 reduction for work related expenses. These cost-of-living measures could have passed parliament easily with our support.

But tricky Labor has deliberately tied these measures to its toxic taxes. That's what it's done. It's using a single piece of legislation, an omnibus bill, for its tax cuts and tax increases, putting them both together so it can sneak them through.

Labor could have put forward separate bills. It's very easy to do. There's absolutely nothing stopping it from doing that, other than trying to ram them through.

It didn't separate them out. What Australians see is a bad-faith government playing a cynical political game, as it does every single day in this place. In 2022, on the day he was sworn in, no less, the Prime Minister said, 'I look forward to heading to a government that doesn't seek to have wedges.' I think he was talking about potato wedges.

He certainly didn't seem to be talking about 'wedgislation' like we're seeing right here, so maybe it was a joke. The truth is that we know this prime minister's word is never his bond—never! Ramming this 'wedgislation' through the parliament without sufficient scrutiny is an act of political bastardry and expediency.

Labor is more interested in headlines than it is in helping Australians. That's the truth. And Australians know it.

Our resolve is clear. Labor's toxic taxes need to be axed. That's why we don't support Labor's legislation.

We have proposed amendments. I'll come back to those. And should these toxic taxes pass the parliament with support from the Greens and Independents, our resolve is also clear.

A coalition government under my leadership will repeal these toxic taxes with immediate effect. There's a reason why the government is desperately trying and failing to depict its budget as pro aspiration. I find it hard to even say.

It's just absolute nonsense. But there's a reason why they're going to extraordinary lengths to paint this shameless tax grab as the solution to intergenerational equity. The Albanese government has lost control of its spending.

Government spending as a proportion of the economy is at a 40-year high outside of the pandemic. It's why we are about to cross the threshold of $1 trillion of debt. It's why inflation in our country remains stubborn and sticky.

It's going up, not down. The Treasurer told us that he'd beaten inflation. The truth is that inflation had beaten this hapless Treasurer.

The government now needs more than ever to take money from Australians to fund its spending addiction—and when Labor runs out of money, it comes after yours. The Treasury secretary was upfront about this being a tax grab. At the Australian Business Economists forum last week, she also said: Individuals are sensitive about paying additional tax— she's right about that— which is understandable.

But revenue needs to be raised from somewhere … She could have said that revenue needs to be raised from someone—just from people who don't vote for Labor is obviously the way they're thinking, or at least the way the government's thinking. Let me repeat that last part: revenue needs to be raised from somewhere. Without compunction, the Albanese government is coming after Australians' money however it possibly can.

There's no more harmful tax than Labor's inflation tax. The higher this Labor government’s homegrown inflation goes and the longer it lasts, the more this government takes from Australians. That's how it works.

That suits Labor just fine—because the government's reckless and unrestrained spending requires more revenue. Labor's only too happy to see inflation push more Australians into higher tax brackets, so it can take more of their income as tax. That's what they're doing.

Bracket creep is their best friend. As I said, we support the government's $250 annual income tax cut. But here's what Labor is not telling Australians.

If that were put in place tomorrow, it would be gone by Christmas because of inflation. That's what it does. It will be gone by Christmas.

Here's the reality. Labor are stealing more money from Australians through inflation than they're giving back through their tax cut. That's how they work—give a little bit with one hand and take way more back with the other.

That's how they're doing it. That is how Labor always like to do it. The Albanese government's not so dirty little secret is that it likes inflation because that way it gets more money for its spending.

A coalition government under my leadership will stop Labor's dishonest tax. In my budget-in-reply, I announced the coalition's policy to index income tax thresholds to inflation, and we call that the tax-back guarantee. Never again will the government be able to steal from Australians year after year via stealth, as this Labor government is doing.

In simple terms, our policy will help protect Australians' incomes from inflation, that thief in the night. We will protect it in a way Labor never would. From 2028-29, we'll index the bottom two income tax thresholds to inflation, and that will fully protect 85 per cent of income earners.

From 2031-32, we'll index the top two tax thresholds as well. Of course, that will protect all income earners from inflation. Let me give you two examples of how this works in practice.

Let's assume that inflation was at the Reserve Bank's target rate of 2½ per cent. It's a big assumption under this government; it won't be under our government. Mr Kennedy: It's double under these blokes!

Mr TAYLOR: It's double at the moment; that's right. Let's assume wages are growing by three per cent. Heather is a hairdresser earning $70,000 a year.

Under Labor, her real wage gains will be completely taxed away—all gone. They're not getting real wage gains under this government. They're going backwards right now.

But, under our tax-back guarantee, Heather will get a tax cut of about $250 in year 1, and that will rise to $1,000 in year 4. Paul the plumber is earning $140,000 a year, working incredibly hard. Under Labor, his real wage gains will be completely taxed away as well—all gone.

Under our tax-back guarantee, Paul will get a tax cut of $250 in year 1 and $1,200 in year 4. In short, under our policy, Australians will get more each year. We will give Australians a bigger tax cut without the tax increases that are occurring under this government.

Australians will be rewarded, keep more and get ahead, because that's what we believe in. The Treasurer, of course, has given the game away. On Sunday, after budget week, the Treasurer was being interviewed by David Speers on Insiders.

In that interview, the Treasurer said that our indexation policy will cost a quarter of a trillion dollars over the decade. Well, there's the rub, because that's the figure he wants to steal from Australians. That's his hidden tax.

He admitted it. That's how much he wants to get. Of course, if he can get inflation up higher, he can take more.

He'll keep trying to push it up, no doubt. But it will not happen on our watch. We will ensure Australians keep their money.

Our policy is fair. It's simple and it's honest, unlike those opposite. As I said, the coalition has proposed amendments to Labor's legislation.

I move the second reading amendment circulated in my name: That all words after "That" be omitted with a view to substituting the following words: "the House declines to give the bill a second reading and: (1) calls on the Government to immediately pass laws to end bracket creep and implement a Tax Back Guarantee, by indexing the personal income tax brackets to inflation starting with the first two tax brackets in 2028-29, and the remaining tax brackets from 2031-32; and (2) notes this will deliver lower income taxes, permanently, to all Australians and ensure that income taxes cannot rise without the passage of new laws".

Our proposed amendments include the following. Labor's $250 annual income tax cut stays in the bill. We support it.

We seek to retain schedule 3. Labor's $1,000 deduction for work related expenses also stays in the bill. We support that as well.

We seek to retain schedule 4, but we oppose Labor's toxic taxes on Australians. We don't support Labor's changes to capital gains tax as contained in schedule 1. These changes punish aspiration, and the coalition therefore seeks the removal of schedule 1 from the bill.

We also don't support Labor's changes to negative gearing in schedule 2. Their own budget papers explicitly admit that the combined impact of these taxes will reduce housing supply and push up rents. The coalition therefore seeks the removal of schedule 2 from the bill as well.

Put simply, we support tax cuts. We oppose tax increases. It's that simple.

Here's what Australians need to know. If the Albanese government doesn't endorse our changes, it means two things: (1) Labor is for imposing higher aspiration-killing taxes on Australians, and (2) Labor is for inflation, pushing more Australians into higher tax brackets, paying more tax so it can have more of their income. The ball is in Labor's court.

They have an opportunity here to support our proposal to protect Australians' incomes from inflation, to support our policy to end bracket creep, to support the coalition's determination to provide real, meaningful tax cuts to Australians, to support our plan for generational tax reform, to support our vision for a fairer, freer and better Australia and to restore Australians' standard of living and protect their way of life.

We believe in aspiration. If Labor truly seek to preserve the reward for the hardworking spirit that makes our nation tick, they will support our amendments. The DEPUTY SPEAKER ( Ms Chesters ): Is the amendment seconded?

Mr Tim Wilson: I second the amendment and reserve my right to speak. Debate interrupted.