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

Ms STEGGALL (Warringah) (11:39): The government argues that this legislation is about making the tax system fairer between income earned from wages and income earned from passive investments. But that framing is too simplistic. A capital gain is often realised only after many years of risk, delayed reward, reinvestment, losses or uncertainty.

If we want an economy that backs enterprise, innovation and productivity, we must recognise and reward responsible risk-taking. I support the principle of reforming housing tax settings. Negative gearing and capital gains tax concessions have too often encouraged investment into established housing rather than new supply, and that has contributed to a market where too many young Australians are locked out.

That is why I support the bulk of this legislation, schedules 2, 3 and 4. But schedule 1 requires amendment, and that is the amendment I have moved. This bill goes much further than housing.

It extends the CGT changes across shares, ETFs, managed funds, startups, small and larger business assets, employee equity trusts and family business succession. If the government's policy target is speculative investment in established housing, then the legislation should target that. It should not drag productive investment, business risk-taking and modest long-term savings into the same net.

The government has framed this package as reform for workers, first home buyers and future generations. But the concerns raised consistently with me in Warringah are that the CGT changes are not properly targeted. Young professionals, small-business owners, startup founders and families feel blindsided.

Many are not wealthy investors living off passive income, as has been suggested by too many members of government. They are working Australians trying to build a financial buffer outside the property market. The government may say that there will be amendments, carve-outs and extensions.

But that leads us to the difficulties. We simply do not know where that is going to land. We are not privy to the negotiations around where the thresholds for business are going to be.

For many young Australians who cannot get into housing shares, ETFs or employee equity are among the few remaining pathways to save, invest and build some financial security. Small businesses have raised similar concerns. Shares, startups and business equity are not the same as passive property investment.

For entrepreneurs, early employees and local investors, capital gains can be the reward for taking risks, for accepting lower wages, for reinvesting profits or for building a business over many years. Integrity in our trust system is also important, and income-splitting should be ended. But many family businesses and small operators also use trusts for legitimate reasons.

The suggestion that businesses can simply restructure into companies is too simplistic again. Restructuring can mean legal costs, accounting costs, state taxes, transfer costs and additional administration. For small operators, that is not a minor inconvenience; it can be a major barrier.

There are also concerns around investment in clean energy and innovation. Australia needs more capital flowing into productive enterprise startups, renewable energy and growth businesses, not less. The object should be clear: reduce tax advantages that encourage speculation in established housing while protecting investment pathways that support productivity, entrepreneurship and long-term economic resilience.

The government has said there will be carve-outs, but the parliament has not seen what they are. I am not in a position to genuinely say to the people of Warringah that I think the carve-outs have met the right balance or are fair. We don't know which businesses will be protected, which asset classes will be exempt, how startups will be treated, or whether ordinary investors and employee equity arrangements will be caught.

And that's precisely why my amendment is appropriate. It restricts schedule 1 to real property now, where the government says the core problem lies. Once the government has done the modelling, consulted properly and settled the detail for other asset classes, the parliament can then have a proper debate about whether or not CGT changes should apply beyond property.

It avoids capturing shares, ETFs, business equity, startup capital and other productive investments that are not the source of the housing affordability problem. It's a cleaner and more defensible approach. I recognise that this has been a difficult debate and that it has taken courage from the government to bring a debate on housing investment in changes to CGT and negative gearing.

I welcome it. I took that to the last election, but there is just so much uncertainty around the rest. I commend this amendment to the House.