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

Mr BIRRELL (Nicholls) (18:09): These tax changes are proving pretty unpopular out there in voter land, and the reason for that is multifaceted. Basically, it's the premise on which they were introduced, the personal impact that they're having on people, the inability of some ministers to explain how it's going to affect people and the fact that it's just a massive tax grab of $77 billion over the next 10 years.

I'll talk a bit more about that later. I'm hearing all these impassioned defences of these tax changes—capital gains tax and negative gearing; why we have to have it—and I'm just thinking, member for Dawson: I didn't hear any of this before the election. Mr Willcox: No.

Mr BIRRELL: None of this at all. And as the member for Gippsland said when he came in here before—he's seen seven elections; seen only two—he said that the convention in Australian politics is that the candidates, the parties, the people who are aspiring to be the government or to be a representative in the House of Representatives go out to the people and say, 'This is what I will do if I'm elected and this is what I won't do if I'm elected.' As we very well know, the Prime Minister said, 'For the 50th time, it's off the table,' in relation to negative gearing and capital gains tax.

So people voted the way they voted, and they said: 'Oh, well, I might vote Labor. I was considering voting for someone else, but the Prime Minister has taken negative gearing and capital gains tax off the table, so I might vote Labor .' And many millions of people probably did that. So, less than a year later, to bring into this place changes that are the exact thing he said he wouldn't do, along with the Treasurer, breaks the trust with the Australian people.

All of those opposite, particularly the Prime Minister and the Treasurer, will have a big problem the next time they go to an election, because they'll put policies forward and people will say, 'Okay, but you said last time that this was going to be your policy and you changed it.' And you'll hear a bit about what we plan to do. Not only is it real tax reform that will lead to people paying less tax but also we are having the courage and the decency to put it before the Australian people before the next election.

There's been a lot of debate in this place about what sorts of words we can use to describe the deception by the Labor Party, the Prime Minister and the Treasurer, and there are certain words we can't use. But I've consulted with some younger voters as to what we can explain this as: a 'fact-adjacent operation' was one of the things I heard, and 'colouring outside factual lines'.

I was also informed that election promises like these 'age like milk': eventually they sour. But I like to use the word 'furphy', which is named after a wonderful family in my electorate of Nicholls that has always made tanks. They made water tanks for World War I diggers.

When the World War I diggers hung around getting a drink it was like water cooler conversation. There were a lot of tall tales told around the Furphy water tank, and that's how a tall tale became known as a furphy. So I call this a furphy, because this is one of the tallest of tales that was told by the Prime Minister and the Treasurer before the election.

And I can tell you, the Furphy family in Shepparton have honesty, courage and decency, but that's not what we saw from the Labor Party before the election. In relation to the tax changes themselves, we oppose changes to the capital gains tax regime and we oppose changes to the negative gearing regime. But we do support schedules 3 and 4, which deliver the Working Australians Tax Offset, because we believe in lower taxes.

We also support the $1,000 standard deduction for work related expenses. That streamlines things. It makes it easier for people to fill out their tax returns and to get what they should be getting back from their tax.

But these things are put together in a bill with schedules that we cannot support. That's been described, appropriately, as 'wedge-onomics', because they want to claim we voted against the elements that we support. They won't split the bill so we can pass the good and reject the bad—and this from a prime minister who said he wasn't going to be the type of politician or the type of prime minister who wedges people.

Well, the wedge is on. The capital gains tax changes are very confusing for people, and they may—and probably will—tax and cruel aspiration. This will affect people who want to have a go and set up, invest in and build a business, such as a dairy herd—which involves very difficult work; you have to go around at 3 am and pull calves out of cows.

I spoke to a pharmacist who has a fantastic pharmacy in Hobart. His capital gain is going to rise pretty quickly because of his innovative ideas, his investment and the work that he's putting into it. But, on the figures, he's probably going to be slugged a lot more capital gains tax than he otherwise would have been when he goes to sell that business.

So the next person who thinks, 'Well, I'm going to have a go and combine my blood, sweat and tears, my labour, my capital and my appetite for risk,' Member for Dawson, might go and do that somewhere else. The finance minister from New Zealand is already saying: 'Come across the ditch. Come over here.

We want you.' We don't want those people to leave Australia. We want them to set businesses up here. In relation to negative gearing, I hear the arguments.

It's how a lot of people have created wealth over the years, including, probably, most of the Labor frontbench—and good on them. We're told that the changes need to be brought in so that young people can get into the housing market, but the budget papers say that this could lead to a reduction in supply. The budget papers say there would be 35,000 fewer homes.

The budget papers say that rents are going to go up. The budget papers say that people could be taxed on their capital gains, which often come from a share portfolio that they've put together to try and save the deposit for the new home. I understand the intent, and we all want to see more young people getting into the housing market, but the way you do that is to get more supply.

And how do you get more supply? You make it easier for people who want to build housing developments and build houses. So our plan is to provide $5 billion to the councils, the developers or whoever it may be to build the services—the sewerage, the electricity, the roads, the drainage and all of those things that are the roadblock between a housing development going ahead and a housing development not going ahead.

To be honest, sometimes the time it takes for a couple of paddocks to be zoned residential or until someone can actually pour a slab is way too long, and it's often the costs that cause it to be too long. I just cannot listen, in all seriousness, to the Treasurer and the Prime Minister and other people in the government who say, 'We are the party of tax cuts,' because this budget and these tax arrangements mean that $77 billion more tax will be collected over the next 10 years.

That's huge. Some of them bell the cat a bit, because they say, 'Oh, your arrangements would cost the budget $280 billion.' I heard that today. I heard someone say, 'Oh, your changes to reduce bracket creep will cost'—I just emphasise that word 'cost'—'the budget $280 billion.' Now, that money doesn't disappear; it just stops being in the coffers of the government and goes back into the pockets of the hardworking Australian taxpayer.

We've got a better plan, and I'm very proud to be associated with an opposition that has put forward a solution to one of the big problems in tax and tax policy in Australia, which is bracket creep. Bracket creep is where, as inflation rises, people go to their boss and say, 'Inflation is rising; I need a pay rise,' they get a pay rise, the pay rise pushes them into the next tax bracket and they end up paying more tax, but really they're not that much better off, because of inflation.

It's been described as the thief in the night, and governments, particularly governments with high inflation like this one, rely on it to top up their reckless spending. But it's money that's getting taken away from people. To index tax brackets to inflation is real tax reform, and it will put real money back into the pockets of hardworking Australian people.

Regarding the falsity of what I hear from some of the members of the government about intergenerational equity, intergenerational equity is making sure that the tax system is set up so that people pay less tax into the future and that they're not left with a government who has spent so badly that there is a huge deficit when they do become taxpayers. That's the big problem.

The bad budget is a hard sell, and these tax changes are a hard sell, but they are, as we're finding, very difficult for some of the ministers to explain. The Minister for Housing couldn't tell us what the arrangements are if someone wants to build a granny flat on a new property. There are all sorts of issues when it comes to trusts—testamentary trusts, discretionary trusts and charitable trusts.

What's affected? What's not? We're not getting clear answers.

I think that is because it's confusing and it's because the work hasn't been done to really outline what the impacts, including the unintended consequences, of this will be. I'm amazed that more people in the government are not lining up to defend this budget. I could be wrong, and I'll stand corrected if more people come in, but before I came in here I went into the whip's office, and only 26 of the 94 Labor members are scheduled to speak on this bill, Member for Dawson.

You would think that if they think this is so great they would be charging through the doors to come in and talk about how great these changes are and try and explain why they said one thing before the elections, when they were running around during last year's election campaign, and now we're doing something completely different. Maybe they don't want to be associated with that kind of deception, Member for Dawson.

I'm not sure, but I suppose I can't really blame them. But, on recap, we have taxes, lots of taxes. These new laws are just a big tax grab—taxes on small businesses, farm businesses, startups and entrepreneurs, which are the engine room of the Australian economy.

The CG taxes hit shares and businesses far beyond property, and the trust tax catches ordinary small businesses and farmers, not just wealthy investors. The budget locks in $50 billion of high taxes that no-one voted for. That's the point.

No-one got a chance to say, 'I like this idea. I'm going to vote for you,' or, 'I don't like this idea. I'm going to vote for someone else.' That is the compact that exists in Australian democracy.

We've broken a record. There's a record. This is the highest-taxing government in Australian history.

No government has collected more tax from the Australian people than this does. Mr Hill: It's almost like the economy's grown! Mr BIRRELL: I'll take that interjection, because it's flatlining.

It's flatlining on today's figures, Member for Bruce. I don't know if you checked those, Member for Bruce. Some of the hardest working Australians are going to be caught up by this tax grab—entrepreneurs, the people with ingenuity, the sweat equity, those generational businesses, the farmers that are trying for succession.

No-one voted for these toxic taxes, and I'm not going to vote for them now. I support the WATO, the working Australians tax offset. I support the $1,000 automatic deduction.

But I cannot support the changes to the capital gains tax and the negative gearing arrangements because of the way that they were brought in—stealthily—and the impact that they will have on real Australians.