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

Ms TRISH COOK (Bullwinkel) (20:23): I rise today to speak in strong support of the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026. This legislation represents one of the most significant and forward-looking tax reform packages in more than a generation. At its heart, it's about building a tax system and an economy that works in the interests of more Australians.

It's about fairness, aspiration and responsibility. It's about ensuring that we look to the future and that we're not leaving difficult structural problems for the next generation to fix. The Albanese Labor government is delivering a new round of tax cuts, helping more Australians achieve the dream of homeownership and supporting investment and innovation.

This package is pro-worker, pro-investment, and pro-aspiration. It is designed with a clear purpose to make the system simpler, fairer and more sustainable. Through these reforms, we are reducing the tax burden for 13 million workers.

We're supporting around 75,000 more Australians into homeownership. We're delivering $3.5 billion in new measures to support businesses and startups and cutting compliance costs by around $540 million every year. This legislation builds on our government's record of responsible economic management.

It ensures that the revenue raised is returned to workers and businesses in the near term while improving the sustainability of the budget over the medium term. These reforms are sensible, thoughtful, balanced and necessary. They address the distortions that have built up over decades while supporting growth and opportunity across the economy.

I want to turn to schedules 1 and 2 of the legislation—reforms to negative gearing and the capital gains tax. These are important changes as they go to one of the most pressing challenges that we face as a nation—housing affordability. For too long, the current tax settings have locked out many Australians from owning their own home, particularly young Australians.

The existing system has incentivised investment in established properties, and that investment is over the new housing supply, so it's contributed to rising prices and reduced accessibility. This legislation addresses that. It limits negative gearing for residential properties to only new builds for properties purchased after budget night, with changes taking effect from 1 July 2027.

Importantly, these changes are grandfathered, meaning that Australians who currently own investment properties or negatively gear will not be affected. This is a targeted reform. It does not punish existing investors.

Instead, it redirects future investors with future incentives in new builds. It encourages investment where it is most needed, and we all know that is in new housing supply. By doing so, it is expected to support around 75,000 Australians into homeownership over the next decade.

This is about opening the door to homeownership for more Australians. Alongside this, the legislation reforms capital gains tax arrangements. From 1 July 2027, we are replacing the blanket 50 per cent discount with a system of cost base indexation paired with a 30 per cent minimum tax.

This is a sensible and measured reform. It restores the system to its original intent, ensuring that investors are taxed on real gains and not inflationary gains. It also reduces the distortion in investment decisions.

Under the current settings, investments have been skewed towards assets that benefit most from tax concessions, particularly established housing, and these distortions have had wide-ranging consequences for both housing affordability and economic efficiency. By applying these reforms consistently across asset classes, we avoid creating new distortions. We are creating a more neutral system, one that directs investment towards where it earns the best real return, not the greatest tax advantage.

Importantly, these changes preserve existing small business capital gains tax concessions. The vast majority of small businesses will continue to benefit from reduced or zero capital gains tax when they sell. We are also consulting carefully on how these reforms will apply to startups and businesses with low or zero cost bases, because we recognise the important role that they play in our economy.

These changes strike the right balance. They improve fairness, support housing supply and enhance productivity. I now turn to schedule 3, the introduction of the working Australians tax offset.

This is a new, permanent structural improvement to our tax system. From the 2027-28 income year, it will provide a $250 tax offset to Australians that are earning income from work. More than 13 million Australian workers will benefit.

This is a straightforward measure with a powerful impact. It recognises a simple truth: for most Australians, particularly young Australians, income comes from work, and the tax system should reflect that. It will effectively increase the tax-free threshold for workers, boosting it to nearly $20,000, or close to $25,000 for those eligible for the low-income tax offset.

Combined with our previous tax cuts and other measures in this package, this will benefit the average worker by almost $3,000 by 2028. This is real cost of living relief. It helps workers keep more of what they earn, it encourages workforce participation and it supports aspiration, because people should be rewarded for their efforts.

Importantly, this measure is not temporary. It is a permanent improvement to the structure of the tax system. It is particularly significant for younger Australians.

Millennials and gen Zs are expected to make up around two-thirds of the beneficiaries. This is a practical way of giving back to the next generation, helping them to get ahead, save and build for their future. Schedule 4 of the legislation introduces another practical and impactful reform: a $1,000 instant tax deduction for work related expenses.

This measure delivers on our election commitment to make tax simpler, faster and fairer. Each year, millions of Australians spend time and money gathering receipts and navigating complex rules to claim work related deductions. These reforms cut through that complexity.

Workers will be able to claim an automatic $1,000 deduction—no paperwork required. For those with higher expenses, the option remains to claim actual costs. This measure is expected to deliver, to around 6.2 million workers in the first year, an average tax saving of around $205.

It comes with another important benefit: it reduces compliance costs by an estimated $380 million annually. That is time and money that is back in the pockets of Australians. It is a reform that recognises the value of people's time and makes everyday interactions with the tax system easier and more efficient.

These measures do not stand alone. They form part of our broader strategy to strengthen the economy, improve productivity and ensure long-term fiscal sustainability. We are delivering these reforms whilst managing the budget responsibly, making substantial expenditure savings, strengthening Medicare, securing our fuel supplies and providing cost-of-living relief to Australians.

We are also supporting investment through a broader productivity agenda, by cutting red tape and reducing regulatory costs by more than $10 billion per year. Responsible economic management is about making choices, and it's about balancing support today with sustainability tomorrow. This legislation reflects that balance.

At its core, this tax-reform package is about intergenerational fairness. For too long, structural issues in our tax system have been allowed to persist—issues that distort markets, entrench inequality and place increasing pressure on younger Australians. This government is taking those challenges very seriously.

We are not deferring them. We are addressing them. We are ensuring that our tax system is fit for purpose, not just for today but for decades ahead.

We are creating a system that supports aspiration, rewards work and directs investment to where it is most productive. We are doing so in a measured and responsible way, providing certainty through staged implementation and ongoing consultation on the more complex elements. This approach reflects best practice.

This legislation represents meaningful reform. It delivers tax relief to millions of workers. It supports more Australians into homeownership.

It encourages investment where it is most needed. And it simplifies the tax system and reduces compliance costs. It does all this while strengthening the sustainability of our budget and economy.

This is what responsible government looks like. This is what reform in the national interest looks like. These reforms are the reforms that make our economy work better for more Australians.

I commend this bill to the House.