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

Mr HAMILTON (Groom) (21:54): From the bottom of my heart, thank you very much, Speaker. I rise with great joy and enthusiasm this evening to speak on these tax reform bills. From listening to the debate so far, I'm reminded of the old adage that the power to tax is the power to destroy.

This comes from the 1819 Supreme Court of the US finding in McCulloch v Maryland. At that time, the states were trying to destroy the federation's ability to produce banknotes. This was the second Bank of the United States.

When a government decides to destroy something, when it decides to bring something down, the most powerful tool it has is taxes. So we have this adage, which in the US context speaks to the issue of states' rights and that contest between the state and federal government, but in the broader context we talk about it in regard to how a government can apply its taxation settings and the careful balance that every government must find in using taxation settings to generate some sort of societal good to shape the economy around the needs of those who are most vulnerable or to provide opportunity for areas in growth which the government wants the nation to build towards.

That must be balanced with the power of taxation to disincentivise investment. When done to a certain extent, to its fullest extent, the outcome is the death of a certain industry. That's what that comes to.

I'm reminded of that when I hear my colleagues use the line, 'When you tax something, you get less of it.' That's just a modern way of saying the same thing. When you tax something, you get less of it. In the budget and the bill that we're speaking to tonight, we see a perfect example of that played out.

I can remember very clearly reading page 158 of Budget Paper No. 1 with great surprise that that budget paper would include in it the explicit line that the result of applying these taxation settings as proposed in this bill would be 35,000 fewer houses built by the private sector. That is a perfect example of taxation settings being deployed—no doubt with good intentions.

There is no doubt that the societal benefit that they sought to deploy was there. But the consequence is clearly a downward pressure on economic activity—in this case, in the housing sector. The fact that that particular detail was included in the budget papers was rather extraordinary because it really does just lay bare the biggest counterargument to every speech we've heard so far on this debate—that these taxation settings are driving down the number of houses that will be built by the private sector.

The only way possible the government comes up with offsetting that is that we'll build houses ourselves. We'll fund social housing. Well, where is that going to be paid from?

From taxes collected by Australians, which means that taxation revenue that would have been used for other things—hospitals, roads, schools and who knows what other good things—will now have to be deployed into the housing sector to make up for the 35,000 fewer homes that will be built as a direct result of these taxation settings. The worst bit about this isn't the outcome.

The worst bit is that we all knew this was what was going to happen. It's exactly what happened in New Zealand when they did the same thing. As soon as you remove these, there will be a downward pressure.

We will see less investment in the housing sector. When you tax something, you get less of it. So we will see less investment in the housing sector.

We'll see fewer homes built by the private sector—35,000 fewer homes is the estimation of the government themselves, of Treasury. The number from Treasury is 35,000 fewer homes. That's what this is doing.

It's as simple as that. In assessing the outcome of these bills, of these taxation changes, we will have fewer homes. If the societal benefit were to produce fewer homes, sure.

The societal benefit put forward by the government was intergenerational fairness—that we would create more opportunity for the next generation. Well, we're not doing that. It's clearly failing the very test the government set out.

This does not provide more fairness for the younger generation. This does not create greater opportunity to enter into the housing market for the younger generation. What it does is reduce the number of houses that will be built.

Very simply, when you reduce supply and maintain demand, the price will go up. That is what will happen. That is basic economics.

We've seen that time and time again. Debate adjourned. House adjourned at 22:00