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

Mr FRENCH (Moore) (17:07): Budgets are ultimately about choices. They are choices about what we value, what we reward and what kind of economy we want to leave behind. This bill makes a clear choice.

It backs workers. It backs first home buyers. It backs productive investment.

It backs a tax system that is fairer, simpler and better aligned with the country Australia needs to be. I rise to support Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the related bill. This is a significant tax reform, but its purpose is practical.

It cuts taxes for working Australians. It makes tax time simpler. It supports more Australians into homeownership.

It begins to remove distortions in the tax system that have, over time, worked against fairness and productivity. I speak in this debate as the member for Moore. Moore is one of the best places in Australia to raise a family.

From Ocean Reef to Iluka, down through Mullaloo, Kallaroo, Hillarys, Sorrento and Duncraig and across to Joondalup, Woodvale, Padbury, Heathridge, Kingsley and Currambine, people work hard to build decent lives. They do not go looking for special treatment. They are looking for a fair go.

They want to work, save, invest, raise their children, start businesses, retire with dignity and leave something behind for the people they love. That is aspiration, but aspiration needs a fair starting point. For too many people in my electorate, particularly younger working people and families trying to buy their first home, that starting point has moved further and further away.

A young couple in Moore, both working full time, can look at the suburb they grew up in and realise they are not simply being asked to climb the property ladder. They are being asked to reach for a first rung that keeps moving. That is not a failure of effort.

It is a system out of balance. Before entering this place, I was a qualified electrician, and I worked on building sites across Perth and in the resources sector in the Pilbara and the Goldfields. I know what it means to buy tools, keep receipts, claim deductions and hope there is still something left after the bills are paid.

I later worked as an industrial lawyer representing firefighters and electricians who were not asking for favours; they were asking for decent wages, secure jobs and a system that didn't quietly shift more and more of the burden onto people who work for a living. I also come from a small business family. My parents ran pubs and run a small painting contractor business.

So when small-businesses owners in Moore write to me about tax reform, I do not see a line in a spreadsheet; I see payroll, risk, family pressure, debt, long hours and the kind of unpaid work that rarely makes it into the economic commentary. Since the budget, my office has heard from many constituents. I've heard from young people trying to save for a deposit.

I've heard from parents worried their children will never be able to buy near the community where they grew up. I've heard from small-business owners concerned about capital gains tax, trusts, succession planning and the sale of businesses they have spent decades building. I've heard from retirees who are anxious because some of the claims being circulated online have been designed to frighten rather than inform.

Those concerns deserve to be heard properly. But hearing concerns does not mean defending every part of the status quo, because the status quo is not neutral. It is a set of policy choices.

It is a set of tax rules. And, over time, those rules have increasingly rewarded passive asset ownership over work and investment in existing housing over investment in new supply. That is the problem that this bill begins to address.

This legislation contains four central measures. First, it introduces the working Australians tax offset. Second, it delivers a $1,000 instant tax deduction for work related expenses.

Third, it reforms capital gains tax by returning to cost based indexation, with minimum tax on capital gains accruing after 1 July 2027. Fourth, it limits negative gearing for future residential property investment into new builds. These measures fit together.

They cut taxes for workers. They make tax returns easier. They support homeownership.

They direct investment toward new housing supply. And they begin to make the tax system more even handed between income earned from work and income earned from assets. The working Australians tax offset is a tax cut for Australians who earn income from work.

That matters for most Australians, for whom income does not come from complex structures or passive capital gains. It comes from shifts, rosters, apprenticeships, small businesses, classrooms, hospitals, workshops, building sites and offices. In Moore, it comes from nurses at the Joondalup health campuses, the teachers in our local schools, the tradies on site before sunrise, the retail and hospitality workers, the police officers, the aged-care workers, the small-business employees and the parents working hard to keep their household moving.

This measure recognises that work should be rewarded. It is permanent tax relief for working Australians. It helps people keep more of what they earn.

And it builds on the tax cuts this government has already delivered. This bill also introduces a $1,000 instant tax deduction for work related expenses. That is a practical reform.

Anyone who has ever lodged a tax return after buying tools, uniforms, safety gear, stationery, training materials or other work related items knows how quickly tax time becomes more complicated than it needs to be. For many workers, the question is not whether they have work related expenses; they do. The question is whether the paperwork, receipts and recordkeeping are worth the return.

This measure makes the system simpler. Workers with more than $1,000 in genuine work related expenses can still claim more. Charitable donations, union and professional association fees and other deductions can still be claimed on top.

This is not taking anything away from workers with higher genuine deductions. It is saying that millions of Australians should not need to maintain a small forensic archive in the glove box just to lodge a tax return. That is sensible reform.

It saves time, it lowers compliance costs, and it puts money back into workers pockets. One of the most contested parts of this bill is the housing tax reform, and I want to deal with it directly. Supply remains essential.

We need more homes, we need more affordable homes, and we need more diverse housing near transport, schools, shops, services and jobs. In Moore, we need housing options for young families, key workers, older Australians looking to downsize and people who want to stay connected to the community they know. But supply cannot be the only answer, when the tax system continues to help investors to compete against first home buyers for homes that already exist.

Negative gearing will continue to support investment in new homes, because supply matters. But we should direct that support to homes that add to supply, not to investors competing with the first home buyers for those existing houses. That is the principle.

Existing investment decisions are protected. If someone already owns an investment property, or made an investment decision under the existing rules, they can continue under those rules. Nobody is having the rug pulled from under them.

What changes is the direction of the incentive. Future support through negative gearing will be directed to new builds. That is fairer and a more productive use of the tax system.

If the Commonwealth is going to support housing investment through tax settings, then that support should help create new homes. On the capital gains tax, the government is returning to a fairer principle: tax real gains, not inflation. The current 50 per cent discount is blunt.

It does not accurately measure inflation, and it can overcompensate some investors and undercompensate others. It also creates distortions in investment decisions. Cost base indexation is more coherent.

It recognises that not every increase in the value of an asset is a real increase in wealth. If part of the gain is simply inflation, the tax system should recognise that. Under this reform, investors are taxed on real gains, not merely inflationary gains.

That is not an attack on investment; it is a better way to tax investment. Some people will pay more under the new arrangements; some may pay less. It will depend on the asset, the holding period, inflation and return.

That is how proper tax design works. It does not treat every nominal gain as though it is the same. It looks more closely at the real economic position.

The capital gains changes apply across asset classes, because the government is not trying to create new distortion while fixing an old one. If we change the rules for one asset but not the other, capital would simply move towards the next tax advantage. That would not be reform; that would be administrative whack-a-mole.

And the tax system already has enough moving parts. The objective is to make investment decisions more neutral. Investment should flow to where it earns the best real return, not to where the tax preference is the greatest.

I also want to address the concerns raised by small-business owners in Moore. The existing small-business capital gains tax concessions remain. That matters.

Eligible small businesses can continue to access concessions that may reduce or eliminate capital gains tax when a business is sold. The local family business, the contractor who has built something from scratch, the small employer with staff to pay, the tradie who has spent decades building goodwill, the business owner who has put their house on the line to keep people employed—those people deserve certainty and respect.

They should not be casually dragged into a scare campaign that pretends every small business will be hit the same way. That is not accurate. There will be, also, further consultation on more complex cases, including firms with low or zero cost bases, start-ups and small businesses.

I welcome that. Tax law is complex. Anyone who says otherwise has either never read it or has been unusually brave in public.

Major reforms are often legislated in stages. That allows the core policy settings to be established, while the more technical issues are worked through properly. That is not a flaw; that is responsible lawmaking.

I also want to address the misinformation directly. This bill is not a tax on inheritance. It is not a tax on the family home.

It is not the end of aspiration. It does not mean every Australian will pay more capital gains tax. It does not abolish investment.

It does not punish work, enterprise or small business. It is a reform that says that the tax system should work in the interests of more Australians. It says that workers should keep more of what they earn.

It says that first home buyers should have a fairer chance. It says that investment should be directed toward real economic value, including new housing supply. And it says that we should not keep leaving the hard problems for someone else to fix later.

Some constituents have raised another issue with me. They've said that these reforms were not all put to the electorate in this form. That concern should not be dismissed.

Trust matters in public life. When people feel blindsided, we should listen. But government also has a responsibility to govern.

Housing affordability has become one of the defining economic challenges of our time. Tax settings that may have seemed sustainable in one era can become unfair and distortionary in another. The responsible course is not to pretend the problem is smaller than it is.

The responsible course of action is to act, explain, consult and be accountable for the decision. That is what I'm doing as the member for Moore. I'm not pretending every person in my electorate agrees with this bill.

They do not. I'm not pretending that every concern is unreasonable. It is not.

But I am saying the government's position is defensible, necessary and directed at a very real problem. We cannot keep telling young Australians that homeownership is central to the Australian dream, while refusing to examine tax settings that make it harder for them to compete; we cannot keep saying we value work, while allowing the tax system to increasingly favour asset income over labour income; and we cannot keep saying we support housing supply, while providing the same tax advantage to the purchase of existing homes as to the construction of new ones.

This bill cuts taxes for workers; it simplifies tax time; it protects existing investment decisions; it directs negative gearing toward new housing supply; it taxes real capital gains, not inflation; it maintains existing small-business capital gains concessions; and it provides a framework for further consultation on complex issues. That is responsible reform.

There is always a reason to avoid tax reform. There is always a reason to wait. There is always another report, another scare campaign, another vested interest and another person insisting that the system is broken but their particular part of it must never be touched.

But the workers carrying the tax burden have waited long enough. The first home buyers competing against tax preferred investment have waited long enough. The young families in Moore, looking at house prices and wondering whether the system still has a place for them, have waited long enough.

This bill will not solve every problem in the housing market or the tax system. No single bill could. But it makes a clear and necessary choice.

It backs workers. It backs first home buyers. It backs new housing supply.

It backs productive investment. It backs a fairer and simpler tax system. That is a fair choice, that is a Labor choice, and I commend the bill to the House.