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

Ms BOELE (Bradfield) (18:18): I rise to speak on the government's proposed tax reforms, Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. I want to start by commending the government for showing grit and determination to attempt something genuinely brave. Since the last election, many of us in this chamber have called on the government to use its mandate to do something courageous and meaningful.

Real reform is hard. It's politically costly, and too often governments simply avoid trying. Whatever my reservations about the details of these tax changes—and I'll get to those reservations shortly—I commend the government for attempting to address the structural inequalities that have been embedded in our tax system for a generation.

These bills go to the heart of what kind of country we want to be. Who should bear the burden of tax? What kind of wealth building do we want to encourage, and what realistic chance do young Australians have to own their own home and to get ahead?

These are serious questions, and I'm glad that the government is finally trying to answer them. But let me briefly explain what is in front of us, because the public debate has not always been clear. The bill has four main elements.

The one that has received the most attention is a change to the capital gains tax discount. Currently, you receive a 50 per cent discount on capital gains tax, and that's being replaced with the discount based on inflation, so you only pay tax on real above-inflation gains. Based on historical data, for some assets, like detached housing, that's likely to reduce your discount.

But, for other assets, like some apartments or shares, your discount may actually increase. It depends, of course, on how much your capital gain is due to inflation or due to real gains. There will also be a minimum tax rate of 30 per cent on real capital gains.

The second element of this bill limits negative gearing on residential property. Investors who purchase existing properties will only be able to offset their rental losses against rental income, not against their wages or other income. Investors in new builds, however, retain the full negative gearing benefit.

This design is clearly intended to tilt investment toward new housing supply, and, of course, I welcome that. The third element of the bill is a tax cut of $250 for working Australians, and the fourth is a $1,000 instant tax deduction, allowing you to claim up to $1,000 in work related expenses without having to keep all of those receipts. I want to focus today on the CGT changes and negative gearing, because they are the most consequential for restoring fairness for Australian workers and for backing business to take risks, employ Australians and contribute to productivity.

I'm constantly listening to people in my community in Bradfield speak about housing. The system just isn't working. I speak to young people who grew up on the North Shore but who simply cannot see a path to owning, let alone renting, a home there.

I talk to parents who are watching their adult children move further and further away. I see a generation that has done everything right and is still shut out of the market and the opportunities that were afforded to their parents. The capital gains tax discount, combined with negative gearing on investment properties, has contributed to this broken system by distorting the housing market.

For decades, these tax arrangements have encouraged investors to treat property as an asset class. Over the years, we've learnt to accept this as normal, but it's not. People in other countries find our relationship with property, quite frankly, bizarre.

This drive to treat property as a financial asset has been damaging. Since the capital gains tax discount was introduced in 1999, property prices growth has dramatically outpaced wages growth. Houses have become unaffordable to just too many people, and far too much money has been redirected from productive investments to sit passively in properties.

Doing nothing about these taxes would mean that we continue to face persistent and worsening problems of housing affordability and inadequate shelter. Doing something is necessary, and some of the government's changes will indeed help. By limiting negative gearing for existing investment properties while preserving the full benefit for new builds, the reform steers capital toward where it is actually needed—new housing supply.

The CGT changes, when applied to property, are defensible on similar grounds. So, in relation to housing, I want to emphasise that change is welcome, and my electorate broadly supports this. In a survey that I conducted earlier this year, people in my electorate overwhelmingly supported reforms to capital gains tax discount for housing, even if they themselves held investment properties.

People recognise that change is needed for their children and grandchildren to live prosperous lives, and I share that support. But, alongside many colleagues on the crossbench, I have a number of reservations about the design of the government's proposed changes. I have concerns about the way that the government has conducted this process.

Why? Because the government is trying to sell this as a housing policy, but it has extended CGT changes to every asset class, not just real estate but also shares like ETFs, bonds, larger small businesses and startup equity. The government's stated rationale is that it doesn't want to replace one distortion with another.

Consistent tax treatments across asset classes is a legitimate policy goal, and I accept that in principle. But the case for extending these changes beyond property, at this time, has not been clearly made to the Australian public, and the result has been confusion and concern and, in some cases, anger. I've had constituents contact my office who genuinely thought that the changes were only going to be about investment properties; they were blindsided when they realised their other investments were going to be affected too.

The government hasn't communicated well enough on this. I've heard from self-funded retirees who are too old to be completely funded entirely through superannuation and who were intending to sell shares as a retirement strategy. I've heard from young people who are using ETFs to save.

I've heard from small-business owners with no super who are planning on selling their business to fund their retirement. And I've heard from young parents who are banking on selling some shares to get through an extended parental-leave period. These plans are now all in doubt.

That's why I came out, right after the budget, to call for the government to ring-fence the reforms to residential property and to slow down on the other changes—to consult first, consult widely, and make sure other changes do not result in unintended consequences. I still hold that view now. Then there are the concerns being raised by business.

As someone with a background in venture capital, I see how these proposed reforms threaten to place a significant tax burden on this important part of the finance sector that takes risks and backs business. A VC fund will back 20 entrepreneurs with their ideas or business models, knowing that only one will likely net them any profits in five or 10 years time.

The proposed tax changes mean that government will reap rewards when profit is made, but they leave all the downside risk with VC investors. Now let's talk start-ups, particularly those without formal VC inputs—people who take a loan from the bank or from family or from friends. The sector has a unique relationship with risk and reward.

Founders spend years building their companies, and, often, forgoing wages or super, in the hope that their risk-taking will yield long-term rewards. But the financial and time investments in these high-growth assets will be punished under the new scheme. This will likely disincentivise people from engaging in the years of hard work that go into start-ups, or it will push them to take their businesses elsewhere—overseas.

I surveyed constituents about this issue as well, and three in four people who responded supported a CGT carve-out for founders. They recognised that passive property gains and active business gains are different and that the government's tax reform should reflect this. These start-ups are not just the unicorns that we hear about in the news—the companies that will end up worth over a billion dollars.

Those are rare. This is also about the far-more-numerous smaller start-ups, that you don't hear about but which also do such valuable work: driving innovation, employing talented people and making our economy more productive. I'm particularly concerned about the climate tech sector.

This is one of the most important emerging parts of our economy. Helping it grow will help us tackle the climate crisis and improve energy security, and make us more prosperous in the process. We're fortunate to have such a burgeoning climate tech sector: 800 companies employing 12,000 people, with world-class researchers and entrepreneurs working on all kinds of important issues, from energy storage to clean agriculture to industrial decarbonisation.

Many of these companies manufacture products right here in Australia. And over 30 of these companies are on track to reach a $1 billion valuation in the next two years. Now, the government claims to want to see this sector thrive, but its tax changes undercut that goal.

These are companies like MCi Carbon, which decarbonises cement and steel production and turns CO2 emissions into valuable products; or Allume, which is helping residents in apartment blocks to install solar and electrify—companies doing innovative, valuable decarbonising work, towards an economy that is going to prosper, and unlocking economic opportunities.

Bradfield is home to many people working in and investing in climate tech. We want to see these companies stay in Australia; we don't want to see a brain drain. The government says that they want this too, which is why they've committed to consulting on possible exemptions for start-ups—and I welcome this.

But it raises an important question: why the rush? The government's asking the parliament to pass a fundamental framework for this reform, while acknowledging that significant design questions remain unresolved. Why legislate the framework before these thorny issues are settled?

Despite all of the resources that it possesses, the government has chosen to develop something behind closed doors and spring it unexpectedly on voters who are expecting to see targeted changes to property taxes. This process just doesn't cut it. We saw another example of these rushed and opaque processes in the budget, with the government's announcement of separate tax reforms on foreign investors that would disproportionately affect the renewables industry—again, problems that could have been foreseen and resolved but were not, because the government didn't engage with the industry players before setting out legislation to make changes impacting those groups of people.

I support fellow crossbench member Allegra Spender's motion last week to refer this bill to the Standing Committee on Economics for a report by the end of July. The government voted down this motion. I'm pleased to support amendments today which call on the government to limit CGT reforms to property, but the government will almost certainly vote those down too.

A Senate committee is looking into these bills, but it'll only have a couple of weeks to do so. That's not enough time to properly scrutinise these reforms, nor is it enough time to build support amongst the public. Why not take the time to build genuine community understanding and support that would help ensure that any changes endure beyond this government?

I want to say again that I welcome the government's bravery, but I ask it not to rush. Consult properly and return to parliament later this year with reforms that have been properly scrutinised and designed, and take the time to explain to Australians clearly what these changes mean for their own financial lives. Take the time to consider people's views and genuinely listen.

Continue to be brave, but have the humility to change the design of these reforms in order to mitigate unintended consequences. I genuinely believe in the direction of this reform. If this bill were only about housing—if the negative gearing changes were paired with the CGT reform and ring-fenced to residential property—I would vote for it without hesitation.

But that is not what is before us. What we have been presented with is a change that applies across all asset classes and is introduced ahead of consultations that the government acknowledges it still needs to conduct, and it's happening with design questions still unresolved and without the broader public having been brought along on the journey. I will, of course, hold the government to account on its ongoing consultations with the startup and small-business sector, and I will keep pushing for more information and clearer communication about the impact of these changes.

I commend the government's appetite for reform, but just because a policy is courageous doesn't mean it has been well designed or that the process has been thoughtful or transparent. For those reasons, and with genuine regret given how much I support the housing elements, the tax deductions and the tax cuts of this bill, I will not be supporting this legislation today.

I urge the government to take the time to get this right, because this cause is just too important to continue to get wrong.