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

Ms O'NEIL (Hotham—Minister for Housing, Minister for Homelessness and Minister for Cities) (11:53): I'm really grateful for the chance to contribute to this debate, and I acknowledge other members who have had their say in the parliament. I'm really proud today to speak in support of the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026.

This package of bills represents four of the key measures in the recent federal budget. The first is the working Australians tax offset, providing a new tax cut for every single one of Australia's 13 million workers. There are an instant tax deduction of $1,000, reforms to capital gains tax and reforms to limit negative gearing to new builds.

There is a lot about this bill that is technical in the operations of the tax system, and I don't want to focus my comments on that today. I actually want to talk to you, Speaker, about the deep meaning of what the parliament is debating at the moment. So much of the language that we use to talk about public policy in this chamber has this dryness and this sense of avoidance of any kind of emotion or meaning.

As housing minister, I get to see what happens when housing goes wrong in our country. I get to see the pain, the distress, the discomfort and the incredible damage that this can do to the lives of people who are wound up in everything that is going wrong in our broken housing system. But I also get to see what happens when housing goes right—the transformative effect that stable housing has on Australian families, allowing them for the first time to be stable, to set down roots, to build a life in a new community and to know that no-one can move them on from something that is theirs.

That deep meaning is why Australians, for almost our entire existence since the postwar period, have fought and aspired to homeownership. But, whatever you may see about what's going on in our country today and whatever different views there may be around this chamber on what to do, we should all be able to agree on one thing, and that is that our country has a broken housing market.

We have got homeownership rates falling through the floor for Australia's young people. Of course, this is not just about Australia's young people. We see more and more older Australians who are heading into retirement with a significant mortgage.

All of us, if we're being really honest, can see in the parks and the streets of our own suburbs an increasing number of Australians who do not have a roof over their heads. Finally, we have a Commonwealth government that is standing up and saying that we are going to do something about this. We're having our usual argy-bargy as we have in politics in the chamber, but outside the chamber Australians are having a very similar conversation across households in their lounge rooms and at their kitchen tables.

They're talking about whether they will ever be able to buy a home of their own. They're sitting around a table and saying, 'How can we map our way out of this existence?' They're stuck in rental queues, paying too much of their income in rents and bouncing from short-term rental to short-term rental, all the while likely paying off someone else's mortgage rather than their own.

We want to change the opportunity for Australians like that. I want to tell you about Mika and Matt, who are a couple that I met pretty recently with the Prime Minister. We visited their home in Canberra, and they just recently bought into the market under the five per cent deposit scheme.

We saw the transformative effect of having homeownership for this family. They are setting up a life together, a productive, beautiful life in our great country. They told me about the first night that they stayed in their new home.

They had an experience that I want every Australian to experience. They sat on the floor in a home without chairs, and they ate pizza out of the box with their friends. What a beautiful moment for that family, and our government was so proud to have been part of making it happen for them.

But we're not seeing enough Mikas and Matts, and I want to see more of them. Increasingly, Australians are seeing that future slipping out of their reach. For decades, homeownership rates have been falling but falling particularly quickly for those young people whom I am so concerned about.

The tax system is not the whole story when it comes to what's going on in housing, but it's certainly pretty relevant. If we look at what has happened to our housing market since the tax changes were made by John Howard and Peter Costello all the way back in 1999, house prices and incomes decoupled. We saw this huge growth start to emerge in our housing market, yet wages were not able to keep up.

That was partly the effect of the tax changes that we are unwinding and revising today. If you've got any doubt about what's going on in housing today, I want you to remember this. We are at a point in our country today where the average time that it would take to save a 20 per cent deposit in your home city of Sydney, Deputy Speaker Freelander, is now up to 17 years.

We cannot let this go on without intervention, and that is why our government is standing up and making this change. No-one is suggesting that what's going on in housing happened in the last five years or indeed the last 10 years. This is a long-running, chronic problem for our country which has been building since, effectively, I was born.

For too long, governments around our country have failed to ensure that enough homes get built. We've seen planning systems around the nation get more restrictive. We've seen infrastructure fail to keep pace.

And, alongside all of those failures, we've seen a government that decided to tilt the housing market away from first home buyers and towards investors. Over time, Australia has allowed this tax system, which encouraged huge additional amounts of investments to flow straight into existing housing stock, to continue. When we look at where investors are investing in housing in Australia today, more than 80 per cent of their investments are in homes that have already been built.

Explain to me the public policy reason for the tax system to support such a thing. Of course, the results have been pretty predictable: more pressure on prices and fewer people being able to buy their first homes on a Saturday morning all around Australia. That's exactly why this bill is levelling the playing field for first home buyers in relation to investors.

At a time when housing affordability around our country is under such tremendous pressure, we just can't sustain a system that actively tilts things away from first home buyers who desperately need our help. The reforms in this budget will make our tax system better, fairer and simpler and deliver an Australian tax system that takes our intergenerational responsibilities seriously.

By replacing the 50 per cent discount on capital gains tax with a cost base indexation system and by limiting future negative gearing to new homes, we're going to get an additional 75,000 Australian households out of the rental queue and into the property market. The reforms have been really carefully designed. Existing arrangements for current property investors will remain in place.

If Australians out there want to invest in housing, they'll still be able to access these tax concessions, but we're changing the incentives. If you want to be a property investor, our government will back you in, but we want you to do something important for our country: build a new home. We want more Australians to own the home they live in, we want more homes built and we want first home buyers to have a fairer opportunity to compete.

These reforms of course form a part of what is easily the most ambitious Australian government agenda on housing that we've had for 70 years—the $47 billion Homes for Australia plan that is building more homes, making it better to rent and backing in first home buyers, just as an Australian government should. Part of this plan is our five per cent deposit program.

In this budget we are not only levelling the playing field between investors and first home buyers; for the first time, we, the Australian government, are standing behind the first home buyer, backing them in and helping them into the market in exactly the way that we should. We've seen new builds in Australia—new commencements—up 26 per cent on where they were last year, and you've heard me talk about those 55,000 desperately needed social and affordable homes.

It's the most important thing the Commonwealth can do to address that rising homelessness that I've talked about. We're working with states and territories to deliver a better deal for renters. This is an absolutely massive housing agenda, but, before this budget, we were not yet doing enough.

We needed to fix the critical problem of what investors versus first home buyers are facing at auction. I honestly, truly believe—having been in this debate and looked at this problem over a long period of time—that doing nothing about this is not an option for our country. If we want housing to be fair for Australians, we have to make the changes that are in this bill before us.

We're having a really important debate in the parliament at the moment about aspiration, and I want to be really clear about where the government stands on this. There is no greater aspiration in this country than the aspiration to own your own home. For most Australian families, this is without question the most important financial decision that they will make in their lives.

We will fight every day for Australians, to make sure that you get ahead and do it in a home that you own. These reforms to our unbalanced tax system are about helping Australians build financial security for themselves and for their families. We don't have to look too far to find survey data telling us that there is a majority, in some cases, of young people around our country saying that they actually don't think that homeownership is ever going to happen for them in our country.

If you want to talk about an aspiration killer, that's it—a broken housing market that tells the young people of this country: 'It doesn't matter what you do. It doesn't matter how much you save. It doesn't matter how hard you work and how hard you study.

The thing that you want most will still be out of your reach because the housing system is broken.' That's what a lot of young people are looking up and seeing today, and that's what we are seeking to change here. I think every member of parliament in this chamber knows about the housing difficulties faced by their constituents. I truly believe that, because you have to know; you don't have to be talking to a voter for very long before housing comes up.

It might be housing for them. Very often, it's not for them but for someone they love—a young person in their life who they are desperately worried about. They wonder if they're ever going to have the opportunity to set down roots in this country.

I want people to understand what's happening right now in the parliament—a Labor government that is seeking to change. We stand for change. We do not want this broken system to continue hurting Australians.

Those opposite are making speeches about everything except the housing difficulties faced by Australians because they are out defending the status quo, and I do not understand how in good conscience you can do that given the pain that this is causing Australians today. It is, of course, not just the tax changes that those opposite are opposed to. Their commitments basically amount to ripping up every single piece of the $47 billion program, which is helping Australians right now.

They want to wind back the five per cent deposit program. They want to scrap Help to Buy, which is getting into the market 10,000 Australians who in all likelihood would have had no realistic chance of getting in there. They want to scrap the Commonwealth's building of homes for people who would otherwise be homeless.

How could you do that in the middle of a housing crisis? On this side of the House, we refuse to sit on our hands. We're not going to ignore the hard decisions and the difficult problems our country faces—and, if we're looking for hard decisions and difficult problems, we don't have to go much further than housing.

I will say very quickly that I've spoken about my portfolio but I do want to touch on the tax reform that is in this, which is about benefiting Australian workers. This bill contains tax cuts for every single Australian worker, and we are so proud as a Labor government to be delivering that. When we look at what Australians are confronting right now, we see people who are working harder than ever and are struggling to get ahead.

I want to say to Australians: we want you to get ahead and we want you to do it in a home of your own, and that's what this bill is all about.