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

Mr WOOD (La Trobe) (10:43): One of the all-time classic novels is by HG Wells. It's The Time Machine. He wrote it back in 1895.

And I must say, too, that I love the movie, with Rod Taylor, of 1960, and I encourage all government members to watch it. It's got this classic scene. Obviously he's gone forward in time and the world is a different place, with all these humans dressed in white dresses—and the guys all looking great too!—and they're picking up fruit, and it looks like the most amazing utopian place ever.

Then all of a sudden he hears sirens coming from two large doors. The doors open up into a cave underground, and he's trying to stop all the humans from going in there, because obviously he's travelled in time and doesn't know what they're doing. This actually reminds me of Labor's caucus, when they're all just going in there aimlessly.

What happens to the humans in the time machine is that they end up being taken prisoner and held as slaves by these underground creatures. Worse still, they end up getting eaten and destroyed. Can I just make the point to the Labor MPs that this is what you are doing now when you're following your prime minister into supporting all these changes, in particular when it comes to trusts and capital gains tax.

You are just blindly following the leader, and your seats will be at risk because the devastation is so much so. I've been here before in my own government side with a budget the community didn't like. Can I just say we spoke up at the time, and the budget was changed.

The Labor members will not do that. If you're just going to blindly follow your leader and not listen to your business community and especially all those people who have set up trusts—in every single phone call, I speak to a business person. I ask, 'Have you got to trust?', and they say, 'Yes, I set up the trust was advised by my accountant.' I go back to my time as the minister when it came to multicultural affairs and the shadow minister.

Every Indian accountant and every multicultural accountant I know always tells their clients, who, obviously normally due to language barriers, go to their person can also speak the mother tongue, especially if you've got connections overseas—they've advised them to set up trusts. If one of the family members is not working, you can divert the income to them.

Labor, as we know, has changed that, and it's been absolutely rushed through this week. They're going to be hit with a 30 per cent tax, and that is absolutely devastating. When it comes to the capital gains taxes too, no longer are you going to get the 50 per cent discount.

I'm speaking to young—I listened to the Labor member before me saying how amazing it is and how it's going to help young people. Can I tell you now the young people I speak to who are trying to get in front have been investing in shares and using that as their home deposit. They're going to be hit in the future, and they're not going to get the same benefit as obviously the Prime Minister and people like myself have received.

I've done negative gearing in the past. They're not actually giving the young people a break. You're actually giving them a huge burden, and it's going to really hurt them.

The people who benefit the most from Labor's changes when it comes to the negative gearing—it's not going to be mum and dad who's going to say, 'Why don't we actually subdivide our little block and put a couple of townhouses on it?' In my electorate of La Trobe, it's the big land developers who may own 30 or 40 hectares. When they develop those, they're going to be selling those to two groups.

It's going to be the investors in there fighting with the first home owners. The other issue is areas—I've mentioned this before in the Dandenong Ranges—such as Cockatoo, Gembrook and Emerald, there are not many places for rent up there, and there's not much land for redevelopment. There's hardly a block up there that you can actually redevelop.

We have green wedge zones, so the land's not there. All those young kids leaving school et cetera and who want to stay close to the parents—there are going to be no places to rent. They have to go down like 30 or 40 minutes away.

That will be the closest we're going to actually see. When we look at this budget, the projected decade of deficits is about $150 billion and gross debt $1.25 trillion. I was first elected under John Howard, and we actually had a final budget with Peter Costello.

I think the surplus was like $97 billion. That's completely gone. Annual interest is over $42 billion each year, roughly $80,000 per minute.

Higher taxes announced are about $50 billion in total, including $15 billion personal income tax. Government spending is the highest level in 40 years outside the pandemic. Again, this is putting huge pressure on inflation, with everything going up.

I know the Labor treasurer. I like the Treasurer, but he's got this wrong. He and the Prime Minister talk about it being because of the war in Iran and the fuel going up.

Well, hang on. We had the highest inflation rates out of any Western economy even before that. The reason is that the government has spent so much money.

This has put so much pressure on interest rates, and the Reserve Bank governor has had no discretion but to raise the rates. Also, in the government's own budget papers, it says there will be 35,000 fewer homes built. And then I come to another one.

This has really betrayed our seniors, who over the years have paid for their health insurance. You get the warning—'If you don't get health insurance, you'll be paying extra for your Medicare, and you'll be paying more for it.' So people have chosen to do the right thing. Labor has betrayed Australians that are 65-plus, who after a lifetime of paying health insurance premiums are being hit with major changes in Labor's budget.

Labor is removing the private health rebate for people over 65, cutting support purely based on age and not their income. So you get to retirement, and you've been planning this for many years, and they just hit you in the guts. Scrapping the private health rebate means up to $807 extra a year for singles and $1,600 for couples.

That's a lot of money if you're a pensioner or retired. Seniors already struggling with rising bills now face another financial hit. Thousands may drop their insurance entirely.

Again, what does that mean? It means that for the younger generation their premiums go up. It's as simple as that.

More seniors relying on public care means longer waits and more pressure on hospitals, as we know. Again, this hasn't been thought out. 'My word is my bond'—I'll challenge any Labor MP to put that on their next brochure going out to their electorate. I just can't see it happening.

That is a slogan that is never going to be used again in Australian history by any member of parliament or by any businessperson. There won't be anyone standing up and going, 'You know what? I promise you—my word is my bond,' because the Prime Minister, Anthony Albanese, has completely destroyed that slogan.

The old rule was a 50 per cent discount on capital gains assets held for 12 months or more. The new rule is that those 50 per cent discounts will be replaced by inflation indexation plus 30 per cent minimum tax on gains applied from 2027. Again, for everyone who has been seeing their accountants for years and taken all this into account, it's going to change.

This policy will raise taxes on ordinary Australians and reduce rental supply. Sellers will pay more tax under the new rules than under the old 50 per cent discount, obviously. Not just big investors but small landlords, retirees and long-term owners face higher tax bills.

Some investors may sell or drop off buying established homes. I know this is what the government's tactic is. We want the investors to get out of the market, so in actual fact it actually allows the first home buyers to get in.

But at the same time too, when it comes to rentals, you need the investors to be there. Most investors in this space are actually mum and dad investors. We're going to talk about the multicultural communities.

A lot of these guys have negatively geared properties, and in the future they're not going to be going and buying another one. At the same time, think about this. If I owned—which I don't—three or four negatively geared properties, even two negatively geared properties, do you think I'll be selling those at the moment?

They're like gold dust now because they're going to get the benefit. So people will hold onto those existing ones, and they're not going to go and sell one to go and take the risk of buying an off-the-plan where potentially things can go wrong with builders. If they've got an existing dwelling which is doing well, why would you sell it to go invest elsewhere?

So a lot of the investors are going to hold onto those properties. This is what's been told to me by people in the property industry. Again, when it comes to the capital gains tax, I make the point that for young people in particular it's going to be tough on them when they've been putting money into shares and planning for their future.

As I said, Labor is hitting those with deposits when it comes to home deposits and when it comes to shares. I know my electorate has taken up, like many around Australia, the five per cent deposit scheme. What I'm hearing now is that the house value has actually dropped.

You can have a bank loan larger than the value of your property. Obviously, in ten years, property prices will increase. But what if that young person in five years time wants to move out and start a family et cetera?

The Labor government is hoping that everything lines up for that young person. And if it goes wrong—and I think it's going to go terribly wrong—it's going to put a great burden on them financially. The other thing which I and so many people are really annoyed about is the trust situation.

I mentioned this before. When people go and see their accountant, they're advised, 'You know what, it could be a good idea, for younger people too, for one of the family members—it could be the husband, wife, partner or whoever—if you're not working, to set up a trust where you can distribute any gains.' And yes, of course, it's a way of—how should I say—not paying the tax you normally would.

But now, as that money goes into the trust, they're going to be hit by a 30 per cent tax. What I'm hearing at the moment is that everyone who's got these trusts is going to the accountant and asking what they need to do. And the accountants are at the moment saying, 'Hey, hopefully they will make some changes.' Obviously, it doesn't sound like they're going to.

So they're paying the accountant a fee at the moment to get some advice to basically do nothing. Then, after this week, they're going to be paying the accountant for advice on: 'What do I need to do next? Do I need to set up a company?

Do I need to get out of the trust?' Like 800,000 people's tax arrangements must change because of this measure. That's 800,000 people in Australia who, at the very worst, on advice from the accountant, will be changing plans which they've put into effect possibly 10 years ago, and they're leading up to retirement, and all these things are going to change. And this budget is bad for young people.

Young people don't feel helped by the budget. Many think they'll be worse off. Labor's changes close the pathway to buying a home and building wealth.

Gen X and millennials feel forgotten too. New taxes and housing rules make buying and renting harder and more expensive. More homes won't appear as quickly as the government estimates.

In actual fact—I'll go back to the budget papers—that reduction of 35,000 is promised by the government in its own budget papers. Small landlords will exit the system, and it's going to be a devastating time for investment. An amount of times, the Prime Minister, prior to last election, said, 'My word is my bond.' But, again, on 9 April, when asked about changes to negative gearing and CGT—'How hard is it?' Condescendingly, that's what he says for the 50th time.

Again, on 22 April, he said, 'I rule it out. There are no plans.' It was live TV. 'We won't cut the CGT.' In August 2025 he said, 'The only tax policy we implement is the one that we took to the election.' Well, obviously that hasn't happened. I just finish off by saying, no-one will ever use 'my word is my bond' ever again in Australia, whether in politics or business.

I challenge all the Labor members—I see the member for Bruce—to put that on your next brochure: 'My word is my bond.'