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

Ms COKER (Corangamite) (12:46): Our communities succeed when hard work is rewarded. They succeed when a young person can build a future through their own effort, through buying their own home. They succeed when families can plan ahead with confidence, and they succeed when the opportunities available to one generation are passed on to the next.

That's what this bill, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, is all about. It's about ensuring that our tax system better reflects modern Australia, and that means fairly taxing income, whether it comes from wages, shares or sale of a property. As our economy changes, as our communities grow and as new challenges emerge, government has a responsibility to ensure that the rules continue to serve the national interest.

That's what this legislation is about. It is about backing working Australians with a fairer tax system, it's about strengthening the dream of homeownership, and it is about ensuring the opportunity remains within reach for future generations. That's why these reforms are so significant.

They are also measured. Importantly, they are guided by a simple principle: Australians who earn their living through hard work should know that the system is working for them too. Across my electorate of Corangamite in Victoria, I meet people who are contributing every day to the strength of our economy and our communities.

They are nurses in Torquay, teachers in Leopold, tradies working across the Bellarine, hospitality workers on the Surf Coast and small business owners in Ocean Grove. They work hard, pay their taxes and contribute to the communities they call home. They want a tax system that recognises their contribution and they expect government to tackle long-term challenges rather than leave them to future generations to solve.

The Albanese government recognises this. We are a reforming government and we are acting. That's what this bill is about.

A key part of our reforms includes additional tax relief for working Australians. The working Australians tax offset will provide a permanent tax offset of up to $250 each year for more than 13 million workers. That is practical support directed at people who earn their living through wages and salaries.

It is support for the teacher helping students reach their potential. It is support for a nurse working the night shift. It is support for the small-business employee opening up early and locking up late.

It is support for the apprentice learning a trade, and it comes on top of our $10,000 incentive for construction apprentices and our support for free TAFE. These reforms build on that work too, because we know that, for our young community members and for all working Australians, every dollar matters, skills matter and getting rewarding work matters. Our measures recognise that reality.

The bill introduces a $1,000 instant tax deduction for work related expenses, because we know—the Albanese government knows—that, for many Australians, tax time has become unnecessarily complicated. This reform simplifies the system while also delivering additional financial benefit. Around 6.2 million Australians are expected to benefit.

More than half are women. More than a quarter are under the age of 30. Importantly, workers who incur work related expenses above $1,000 will still be able to claim those deductions under existing arrangements.

This is about making the system simpler, fairer and easier to navigate. Together with the income tax cuts already delivered by the Albanese government, these measures provide meaningful and ongoing support to Australian workers. But this legislation is about more than tax relief.

It is about one of the defining challenges facing younger Australians today: housing affordability. Homeownership has always been about more than bricks and mortar. It is about security, stability and belonging.

It is about having a place to raise a family, to build a future and to become part of a community. Across my electorate, housing is one of the issues people raise with me most often—young people in Torquay at the local farmers market, young families in Ocean Grove at the footy, and workers in Drysdale, Armstrong Creek and Clifton Springs. Many tell me the same thing: they are working hard, they are saving and they are making sacrifices, but homeownership feels further away than it should.

That is why the Albanese government is continuing to take action. Our housing agenda remains firmly focused on increasing supply. We are investing in social housing, we are supporting affordable housing and we are working with states and territories to boost construction and unlock more homes.

But supply alone cannot be the whole answer. We also have a responsibility to ensure that our tax settings support the goal of homeownership rather than working against it. This legislation limits future negative gearing arrangements for residential property investments to new builds.

Importantly, existing investments are grandfathered. Australians who have made decisions under the current rules will not be affected. Investors who purchase new housing that adds to supply will continue to have access to negative gearing.

We are changing incentives so that tax concessions are directed towards increasing housing stock rather than intensifying competition for existing homes. That matters, and it makes absolute sense, because, if a tax concession exists, it should support outcomes that benefit the broader community. As Australians, we're all in it together.

Treasury modelling indicates that these reforms will help about 75,000 additional Australians purchase a home over the coming decade. For many young Australians, that could make a profound difference. It could mean the difference between remaining locked out of the market and owning a home of their own.

On top of this, the bill also reforms capital gains tax. It is important that debate on this issue be grounded in the facts. The reforms return capital gains tax closer to its original intent.

Rather than applying a flat discount, the new arrangements will allow investors to index the cost base of assets to inflation. In simple terms, people will pay tax on real gains rather than inflationary gains. That is a simple, sensible principle.

It reflects economic reality, and it helps ensure a more efficient and more fair tax system. These changes apply prospectively, with capital gains accrued before July next year remaining unaffected. Additionally, family homes are unaffected, and there is no inheritance tax.

Despite the misinformation we have heard in this debate today by those opposite, these facts remain unchanged. Importantly, these reforms also recognise the role small businesses play in our economy. Across my electorate and the broader Geelong region, small businesses are central to local communities and the local economy.

They employ local people. They sponsor local sporting clubs. They help create the vibrant towns and neighbourhoods that make our region such a great place to live.

That is why the existing small business capital gains tax concessions remain in place. Eligible small businesses will continue to have access to concessions that can substantially reduce or eliminate capital gains tax when a business is sold. Treasury modelling released this week shows that around 90 per cent of Australian small businesses will be covered by these concessional arrangements.

That is an important point, because, while there has been a great deal of commentary, the reality is that the overwhelming majority of small businesses will continue to benefit from concessions under the law. Every generation faces choices about the future it wants to build. Sometimes those choices require government to challenge long-established tax arrangements, and sometimes they require us to look beyond the immediate political debate and focus on the long-term national interest.

That is what a reforming government looks like: making the hard decisions that will benefit our nation and Australians now and into the future. This bill recognises that housing affordability matters. It recognises that workers deserve a tax system that supports them.

And it recognises that intergenerational fairness should not be simply discussed; it should be acted upon. For too long, too many younger Australians have felt that the pathway to homeownership has become increasingly difficult. For too long, the tax system has not always reflected the balance we need between rewarding work and rewarding investment.

This bill builds on our work to address those challenges through careful, considered reform—reform that cuts taxes for workers, reform that supports first business owners, reform that encourages investment in new housing supply and reform that helps ensure that the opportunities Australians value today remain available to the generations that will follow. At its heart, this legislation is about fairness.

It's about ensuring that hard work is rewarded. It is about ensuring that aspiration remains achievable. That's what matters to Australians, and it's what matters to the Albanese Labor government.

In closing: this bill is about ensuring that Australia remains a nation where opportunity is broad, not narrow; where prosperity is shared, not concentrated; and where the promise of a fair go remains as strong for the next generation as it has for every generation before.