Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026
Mr HAWKE (Mitchell) (20:18): It's very difficult to know where to start with these two bills, the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. It's a shame that we come to this night in this House and this late sitting to rush through tax changes that were deliberately denied by the Albanese government over 51 times prior to the last election.
But the Assistant Treasurer has belled the cat a little bit. This is not just about housing or housing reform for young people; he's sort of acknowledged that this is a 30-year culture war of the Labor Party to basically get revenge for capital gains tax changes they disagreed with in the Howard government. Perhaps that's why they're including pre-1985 assets—something that even Paul Keating ruled out—in breach of faith and trust and the compact between government and citizen that what you earn and your private property belong to you and should not be permanently at the mercy of a government or a government tax.
On coming to office, this government spoke briefly about productivity. It said that productivity was one of our nation's greatest economic challenges. At that stage, I agreed with Treasurer Chalmers; he was correct.
But, shortly after coming to office, the government abandoned the productivity challenge. In fact, it abandoned the whole idea of having a productivity roundtable. That's why, at this time, when productivity growth is 0.2 per cent, it's unbelievable that, in these bills before the House now, the Labor Party is looking at introducing new taxes that form a revenue grab of about $77 billion off the private capital and savings of ordinary Australians—the worst thing you could do to our nation's productivity in this productivity crisis.
Don't believe the Labor Party as they attempt to dress this wolf of a budget, these wolves of bills, in sheep's clothing. This is not about getting housing for more people. If the Assistant Treasurer and the Treasurer are right about 75,000 new dwellings, they'd be better off just building those 75,000 new dwellings.
We don't need to collect $77 billion to do that. I don't believe the Labor Party at all as they attempt to retrofit the argument for a massive revenue grab and for tax changes that they didn't put to the Australian people and for which they don't have the Australian people's consent. The most insulting thing of all out of these bills is that they are trying to tell you that the Working Australians Tax Offset, their new measure—250 bucks in their Working Australians Tax Offset is the return that you will get out of Australians paying $77 billion more in revenue to the government.
Given that the Morrison government had LMITO, with a minimum that started at about $255—it went up to $1,500—it was the first thing that Treasurer Jim Chalmers abolished. They've taken away the same offset for five years—it was a much higher offset for most people, and it was graduated the more you earned—and they've returned 250 bucks, with a massive tax increase, in this legislation.
This WATO of 250 bucks is an insult to every single Australian. To me, it's not a WATO; it's more of a WASPPO—a Working Australians Stay Permanently Poor Offset. Two hundred and fifty bucks is the government's way of saying to you, 'You will be permanently poor.' Their modelling that says you'll be better off because you get $250 is a massive insult to every person in this country—a massive insult.
You would have to be stupid to believe that a $250 tax offset is going to make you better off. I don't believe that anyone in this country has bought that. That's why we saw the scenes of the Prime Minister, in front of his conference, being emotional.
There's one time when the Prime Minister does get emotional. He wasn't emotional because of the $77 billion that he's going to collect. That wasn't the reason for the emotion; he's been celebratory about that.
He wasn't emotional for the small businesses—they're going to work longer hours and do it harder—for the families struggling to pay or for the other pain from this legislation that we're considering. He was emotional because his popularity has declined, because Australian's aren't silly. A Working Australians Tax Offset of two hundred and fifty bucks—are you kidding?
Is the government kidding Australians that this is somehow an offering that it's going to give back and that this makes our society more fair? This doesn't do anything for fairness in our society. This is absolutely insulting to every single working Australian.
Labor hopes you'll be fooled by the 250 bucks, but Australian small businesses are being taxed more every time they want to do something or make a capital gain within their business. Labor is also removing the ladders of opportunity that got every member of the Labor cabinet ahead. Every member of the Labor cabinet has taken advantage of negative gearing.
Now they'll just take that away for the next generation. People like the Prime Minister and the Minister for Social Services got free educations; they never had to pay HECS. They had access to negative gearing, and they took advantage of it.
That's the system. But they're saying to the next generation of Australians, 'You'll pay for your education, and, also, we'll take away from you the opportunities that we had to pull ourselves up the ladder.' You tell me if that's fairness or intergenerational equity. It doesn't sound like intergenerational equity to me.
It sounds like: 'We're alright, mate. We'll pull up the ladder. You guys work a little bit harder in the future.' Just think of this—and I say this to the Prime Minister: think of every day these bills take from every hardworking small-business owner, all those mums and dads in their own family businesses, all across our great country.
On Monday, they turn up to work; they work the whole day and longer. They work on Tuesday. They go to work on Wednesday.
On Monday, Tuesday and Wednesday, they have worked for the government every day before they've turned a cent of revenue for themselves or for their business. They've worked every second to pay the government and government taxes. No wonder we have record insolvencies in Australia today—the highest number of insolvencies on record.
The truth about these bills is this is a war on capital and the movement of capital in our economy. It's a government raid on private savings and future capital gains—everybody's future capital gains. The modelling that says with $250 you'll be better off doesn't take into account that a young person starting out in their life will hope to have a number of capital gains in their life after all that activity, from whatever they are invested in.
The Assistant Treasurer says, 'We just want you in equities. Why bitcoin?' Well, it's not for him to say. It's private capital.
This isn't government capital. This isn't a command economy. This is still the vestige of a free market economy, although that's changing under the Albanese government.
The Assistant Treasurer reveals that he wants to direct your investments now. That's why these tax changes are coming. That's what he said in his argument for this bill.
He is alarmed that people are investing in new technology, new products, new financial services. That's how society evolves, Assistant Treasurer, by people risking their capital, putting it into new ventures and new ways of investing. That's how we've come to the modernity that we enjoy today.
So for him to ask why people want bitcoin or why do they want other forms of distributed ledger technology—well, that's how you get innovation. The capital is vital. So, for the government to create a capital gains change regime that threatens investment and capital in our economy is a war on capital.
The tax changes that come in these schedules, in schedules 1 and 2, mean that everyday Australians are all going to be poorer. We already know that national debt will be higher out of this budget. We now know that taxes will be much higher out of this budget.
We know that family and small-business insolvencies will be higher out of this budget. We know that productivity will be lower out of this budget, including less housing in the government's own budget. Disturbingly, we know that the national savings pool will be lower out of these tax changes.
The savings that we must have, the private savings that really backup the economy, will be lower. And economic growth will be lower. As we know, without negative gearing and without the opportunities that the capital gains tax discounts represent, the investment incentives, we know that there will be fewer opportunities for young people looking to get ahead.
We hear Labor creating a phony war. They are trying to say there is a war between salary earners and wage earners and the people who invest and create and take the risks. This is a symbiotic relationship I say to this government.
The risk-takers and the innovators and the people who start the businesses create the employment that pays the wages and the salaries. There is no conflict between those two ways of earning income in Australia. In fact, they are needed.
They are vital; they rely on each other. The businesses rely on the wage and salary earners; the wage and salary earners rely on the investors and the businesses. If you attack, through your capital gains changes, every Australian small business, and you remove their ability to reinvest in their business—they don't suck money out of their business—you will actually create higher unemployment, which is something that isn't modelled in this budget.
Australian small-business owners—already-struggling with record insolvencies, difficult economic climate, working longer for less—will have no choice but to employ fewer people. That will be a by-product of these bills. Many of my colleagues here, members opposite and members on the crossbench, have given the government a leave pass.
They've kind of said they don't understand the changes, or there is some confusion. Certainly the Treasurer and the Prime Minister are trying to pretend they are still going to consult, as if they hadn't thought this through. I have a different view.
This government, and this Prime Minister in particular, has deliberately set out to do this. The Assistant Treasurer said as much just now, that this has been a 30-year culture war by the Labor Party to reverse what they regard as Liberal capital gains tax changes 30 years ago. The Prime Minister has been clear his whole life that he is a socialist, and now, when he has come to the apex of his prime ministership—he has misled the Australian people before an election—he is showing his true colours with this budget, with these bills before the House, and he means business.
He absolutely believes that small business should pay more tax. He thinks that every time they make a capital gain that it is wealth. Most of that money gets reinvested back into those businesses.
Most of that money gets reinvested back into the economy, which makes everybody wealthier. And yet we see a Prime Minister struggling to explain his own rationale and his own reasons, and the attempt of Labor members to say this is about increasing housing stocks has not made any sense from day one. It doesn't make sense today.
There is less housing in their budget. This will not contribute to having more housing in the economy. In fact, we're already starting to see that major disruption to the housing and property price market is very dangerous—straight after the government set up a five per cent first-saver deposit scheme.
Did the government consider this before they made their changes? For hundreds of thousands of people underwritten by the government, without mortgage lenders insurance, all the risk is put onto the government—and then you pump up the price. You pump up the price by having a five per cent first-saver scheme.
That went up six per cent, three or four times the modelling that the Treasury gave to the government. The price went through the roof. So they paid a premium price underwritten by the government, overleveraged in their debt.
Did the government think this through—that changing the negative gearing arrangements now, in the most dramatic way in 30 years, would have no risk to these overleveraged borrowers who have paid a premium price? What do they think will happen if the price crashes? If the price comes down four per cent, five per cent, 10 per cent, what happens to these people?
The government created this. They just put them on. They encouraged them to get on, knowing that they were going to crash the price.
The government are saying they're doing this deliberately. So the value of their own assets will be less than the money they borrowed from the bank. Hundreds of thousands of people, potentially, in this country have been put onto this by the Labor Party.
Does this sound like economic success to you? Does this sound like a good idea, I ask you? With the taxpayer underwriting a lot of it, who's going to foot the bill in relation to this if someone loses their job?
Is the Labor Party going to make sure that person can pay their mortgage? This is very unclear. But now we know that the government's setting out to lower the property prices of all the properties in Australia deliberately, by design, you have to ask yourself: did they even consider these people on the way through?
They overleveraged them, made them get large mortgages that they probably couldn't have afforded, with a price increase on the way through. When you look at these bills, the Labor Party is being true to form, and it is true that the party of Chifley—and, as the Assistant Treasurer says, a range of other socialist figures in our country's history—see your money as their money.
They see your property as their property. They see your investments as their investments. They don't really accept the notion of private property or private wealth creation.
They don't understand it, that's for sure. And they don't understand the conditions that allow for capital to move in an economy and stay in place and get invested and reinvested so that we can have a more prosperous society. The Labor Party believes that the government creates wealth.
Nothing could be further from the truth. Government spending is 26½ per cent as a share of GDP, the highest ever. We already have the biggest government that we've ever had in Australian history, and our economic prosperity, you can see, is struggling.
Is the answer to massively increase the size and scope of government now? The Liberal and National parties say, no, it is not. Is it time to increase the tax take by $77 billion?
We say, no, it is not. Of course we will support schedules 3 and 4 of the bill. But the cheap trick that Labor is introducing here is saying, 'We'll take $77 billion.
We'll insult the entire country by giving you $250 back. We'll tell you you are better off. And, as we deny you opportunities to get ahead, we'll say we did that for housing for a certain amount of people.' This could not be further from the truth, and this legislation needs to be defeated.