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

Mr WILKIE (Clark) (18:31): Our country is slowly flipping from a country of homeowners to a country of renters, and that's a terribly sad thing to observe and to live through. You know, you've only got to go back two or maybe three decades, and the normal course of events was that a normal sort of person, a regular Joe—he or she—would get a job, work hard, save up a house deposit and could afford to buy a modest cottage for the family to grow up in.

Then they might upgrade it and sell, to move up to something grander, a decade or a couple of decades later, when they could afford it. I don't want to go back to the white picket fence of John Howard, but I do want to go back to a day when a regular person had it within their capacity to own their own home. But, at some point during the last two or three decades, especially in the last half a dozen years or so, housing stopped being a fundamental human right in this country and became an investment product: in some ways, no better or worse than a parcel of shares or whatever someone might invest in—maybe cryptocurrency, these days.

So no longer was a home a fundamental human right and something that regular people could aspire to and achieve; it became an investment product, for those who could afford to, to try and make a buck from. I don't criticise the people who have made a buck, and I've traded a few houses myself over the years. What I am criticising, though, is the succession of governments, over decades, that quite deliberately put in place the policy settings to turn homes into investments and to take away that fundamental human right.

One, of course, was negative gearing. In fact, it wasn't just the introduction of negative gearing; I think the thing that made negative gearing worse was the change that allowed property owners to deduct property costs against their gross income, including their personal salary. That change, from when you could only deduct against the costs of the property, was, I think, a very significant and a very detrimental change in turning property from a human right into an investment.

Then there's capital gains tax. Of course you should pay some sort of capital gains tax when you have a substantial capital gain. The decision to halve the capital gains tax after 12 months might have been well intentioned, but I'm hard pressed to find one decent economist, one good economist, in this country who thinks that the halving of the capital gains tax—that so-called discount—was a good idea.

You can see where I'm going with this, Deputy Speaker. I obviously support—in fact, I applaud—the government for deciding to do something about the tax arrangements regarding residential property. I will support the bill, and I will do it with honesty, because I went to the last election campaigning for tax reform of residential property.

So I feel quite pure about this. I don't feel that I'm letting my community down by supporting this bill But it does bring me to the criticism of the government by the opposition and others that they went to the election promising not to do this. Well, do you know what?

To some degree I'll associate myself with the opposition's criticism here, because this is one of the biggest tax reforms that I can think of—certainly in my adult lifetime—and it would be proper process for something this big to have been taken to the election. So, although I will support it and I won't feel guilty about doing that, because I campaigned on such a reform, I would say to the government: you should have taken it to the election.

I'd say to the opposition: when you have big reforms in the future, take it to the election, because, whether it be Tony Abbott reneging on his promises before and after the 2013 election or the current government reneging on its promises before last year's election, all it does is feed that cynicism about the political class in the community. It's no wonder emerging parties are enjoying record popularity, because the old political class is letting the community down and the community want to ventilate that dissatisfaction and that displeasure.

So it feeds into that. I will go back to a positive, though, for a moment. By the way, if you think I'm a bit all over the place, it's because I think this bill is a bit all over the place.

It's got some really good aspects and it's got some really lamentable aspects. I do think that the idea of trying to achieve some sort of equivalency between the tax on income earned from investments and the tax on a similar amount of income earned from wages is a good idea as a matter of principle, and it is achieved to some degree insofar as, in this bill, the minimum capital gains tax will be 30 per cent instead of the old 25 per cent.

I would say, though, that that increase of five per cent, particularly when it's offset against the effects of inflation, means that people who are paying capital gains tax after 12 months probably won't actually be paying that much different an amount. They might even be paying a little bit less with this reform. I think the scare campaign around this minimum 30 per cent capital gains tax is quite dishonest.

It's coming from people who are accusing the government of dishonesty, but the scare campaign is equally dishonest. But, of course, the devil is always in the detail. When I look at this minimum 30 per cent, I think, 'Well, what happens to someone who is living off the income of capital gains and is getting less than about $200,000 in capital gain from that investment?' If that were just taxed as normal income, they would be paying markedly less than 30 per cent tax.

In other words—and this will be even more pronounced when we debate the next bill, which goes to the detail of trusts—the problem with setting a minimum of 30 per cent is that anyone who's getting income from investments or a disbursement from a trust of less than about, I think, $192,000 or $195,000 will actually be paying more tax than they were before. I think that's very unfair.

In fact, I'll quickly jump to that point of trusts. They say that an age pensioner will be exempt from the 30 per cent tax on a disbursement from a trust in retirement. Well, they'll only be exempt, of course, if they're receiving at least $1 of income support payment from Services Australia through the age pension.

But, of course, you don't get any age pension for a couple if your income is more than about $100,000, in rough figures. So what happens to a couple who are living off their investments and getting somewhere between $100,000 and $200,000 income? They will be paying 30 per cent tax on the disbursement from the trust, or—looping back to simply a capital gain—they'll be paying at least 30 per cent tax on the income from that capital gain.

That is actually markedly more than if they were simply paying, for example, personal income tax. So the settings on this aren't right, and one of the reasons the settings aren't right is that it was never socialised. There was never a public consultation.

There was never an exposure draft. There was never, or never will be, a detailed parliamentary inquiry into these changes. There will never be the opportunity for the government to adjust the exposure draft and get it 'just right'.

You don't just suddenly drop this sort of change on us and say, 'There you go,' and then, when you come under media pressure or political pressure, say, 'Oh, don't worry about the lack of detail'—or the settings between $100,000 and $200,000 I described. 'Don't you worry about that' sounds like Joh Bjelke-Petersen! 'As sure as night follows day, we will consult after this becomes law, and we will change it in your favour.' Well, excuse me.

No wonder people are sceptical that that will be done right, particularly with these reforms increasing pressure on the minister to make adjustments and bring down subregulations or whatever. No, we should do this properly. We should have proper process.

The proper process, by the way, starts with making an election promise and then, once you're elected, saying: 'Okay, we're going to go through this. We're going to have an effective consultation process with the community, with industry groups and with other peak bodies. We're going to talk to everyone, from people in the bush on their properties right through to the captains of industry in the major capital cities, and we're going to come up with a reform that works and is fair.' Then they might have created that exposure draft and circulated that and asked, 'What do you think?' There might have been more consultations.

They might have carefully drafted a bill, and then we would have come to the parliament knowing exactly what we were voting for. I've been talking to quite a few backbenchers this week from the government, the opposition and the crossbench. I've been asking questions of them, and they've been asking questions of me, and I'll tell you what—I've lost count of the number of times my colleagues have said, 'Oh, I don't know about that,' or, 'I'm not sure about that; I don't know what that means.' We pulled out the bill today in my office, and we tried to make sense of one particular point of detail.

There were three of us, and I think our six eyeballs all glazed over trying to make sense of it. It's not the way to do big reform. I did mention the subsequent bill, on trusts.

I've been to a series of elections campaigning for tax reform for at least residential property, so I will honour my promise to my community and support this bill, but I'll warn the government that I'm not going to extend the same support as it stands to the next bill, which will go into the detail of trusts. That is such a complex area. You just can't have a 'one size fits all' approach.

It just doesn't work. It basically comes from a place of demonising anyone who's got a trust as—I can't be unparliamentary, but you know where I'm going with this, Deputy Speaker Boyce—a rich person who's just dodging tax, and that's not the case. I had a family trust when I had a small business in a previous life.

It was the most effective structure for me in order to run my company. I wasn't dodging tax. Heavens, with the little business my wife and I had, we were lucky to take home $80,000 a year.

Nothing was being dodged. It was just a sensible structure for our little business. What jumps out at me as the most ridiculous aspect of the trust proposals is that we would put a 30 per cent tax on the disbursements from testamentary trusts.

That's an appalling proposition by the government. I probably don't need to go into any detail here and detain the House. We've heard so many examples in the last week or so about all of the good and sensible reasons people need to have such trusts protecting their estate, particularly if their beneficiary might be a child with disability, a child with a gambling addiction or a child who they are concerned might fall into a relationship with a scoundrel who ends up fleecing them.

There are countless reasons why testamentary trusts are a sensible and good idea to protect your family. I'm in a blended family myself. Clare and I love each other, and I don't doubt that we will always do the right thing by each other.

But, heavens, there are a lot of blended families where one partner or the other must be wondering, 'If I drop off the perch, what happens in 10 or 20 years time when my surviving spouse meets that scoundrel who fleeces her or him?' That's an example of where I think the next bill will run into a real brick wall. It might be amended adequately that I can support it.

But, as I stand here now, I certainly won't, and I look forward to joining the debate about that. In closing, can I just say: I welcome changes to make housing more affordable. Hobart is a beautiful little town, but I've never seen homeless like it.

I've met people holding down steady, reasonably well-paying jobs living in their car. This is just bizarre. We're one of the richest countries in the world—I think we're the 14th-biggest economy in the world—but we've allowed our housing arrangements to devolve to the point where we have all these homeless people.

People are couch surfing. I was on the Gold Coast not that not that long ago, helping my daughter get into some accommodation; she's at uni. She and her friend are paying $800 a week for a modest two-bedroom apartment with two bathrooms in a reasonable location.

It shouldn't be this way. So I do support this bill, and I will support future reform to make housing available and affordable. The DEPUTY SPEAKER ( Mr Boyce ): Some wise words, member for Clark.

I thank you for your contribution.