Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026
Senator CAROL BROWN (Tasmania) (19:12): I rise to support the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026. As a Labor Senator for Tasmania, I judge reform by a simple test: does it make life fairer for working people in my home state? These bills do.
They help people keep more of what they earn and give more Australians a fair chance to own a home. Leaving everything as it is would be the easiest political choice. But the current system is not working for too many Australians, especially younger Australians.
Doing nothing would pass the problem on to the next generation. The first major part of these bills is the new working Australians tax offset. From the 2027-28 income year, eligible workers will receive a permanent tax offset of up to $250.
Nationally, 13.3 million workers are expected to benefit. In Tasmania, around 270,000 workers are expected to benefit. That includes nurses, teachers, aged-care workers and apprentices.
The bill also delivers the $1,000 standard deduction for work related expenses. From the 2026-27 income year, eligible workers can choose a standard deduction of up to $1,000 instead of claiming each expense separately. Workers with expenses above $1,000 can still claim their actual costs.
Around 6.2 million Australians are expected to benefit, with an average tax saving of $205. The Australian Taxation Office estimates the change will reduce paperwork and compliance costs by $380 million each year. Around 140,000 Tasmanian workers are expected to benefit.
For a worker managing rent, groceries, power bills and fuel, $205 matters. These bills are also about housing. We need more homes, including social and affordable housing.
But tax settings also shape where money is invested and who has the strongest hand when a home is sold. In Tasmania, I hear from young people who are working, saving and making sacrifices but still feel ownership is moving further away. It may be a young worker trying to buy in Glenorchy, a couple saving by renting in Hobart or a family trying to stay close to work and relatives in Kingston.
They're asking for a fair chance. Schedule 2 changes negative gearing for future residential property investments. For residential properties purchased after 7.30 on 12 May 2026, negative gearing will only be available for new builds from 1 July 2027.
Existing investments are protected. People who own a residential investment property or who have entered into a contract before that time can continue to use the current arrangements. Investors can also continue to negatively gear new homes.
That directs the tax benefit towards investment that adds to the housing supply, by respecting decisions people have already made. The government expects these reforms to help an additional 75,000 Australians buy a home over the next decade. Schedule 1 reforms capital gains tax from 1 July 2027.
The current flat 50 per cent discount will be replaced with a system that adjusts the purchase cost of an asset for inflation, alongside a 30 per cent minimum tax on net capital gains. In simple terms, tax will be paid on the real gain rather than the part caused by inflation. The changes only apply going forward.
Gains built up before 1 July 2027 will remain under the existing discount. The family home remains exempt from capital gains tax. These bills do not create an inheritance tax.
The four existing small-business capital gains tax concessions will remain, and, following consultation that the government has undertaken, the government has announced it will increase the turnover threshold for the existing 50 per cent active asset reduction from $2 million to $10 million. This will make the concession available to all 2.7 million active small businesses and 98 per cent of all active businesses.
That is important in Tasmania, where small businesses are the heart of our towns and regional communities. The government is also consulting on new concessions for eligible innovative startups, to be included in later legislation. People receiving payments, including aged pension and JobSeeker, will be exempt from the 30 per cent minimum tax in a year when they receive an eligible payment.
Deductible gifts and donations will also reduce the capital gains subject to minimum tax. Investors who buy new builds will continue to be able to choose between the existing 50 per cent discount and the new arrangements. The discount for eligible affordable housing will remain.
These details are important, because we have seen a campaign of fear and misinformation from those who do not want the system to change. That includes the Liberal Party, the National Party and One Nation. They say they care about first home buyers, but they oppose reforms that will help 75,000 more Australians buy a home.
They offer anger, but they do not offer answers. We have heard claims about a death tax, a tax on the family home and the end of small business. None of that is true.
The family home remains exempt. There is no inheritance tax. Existing investment properties are protected.
Small-business concessions remain and are being expanded. Parliament should not protect the status quo simply because reform is difficult. Fear campaigns are easy; reform is harder.
Labor is prepared to do the hard work because leaving the system as it is would leave another generation locked out of homeownership. We are cutting taxes for workers, making tax time simpler, supporting new housing and improving the fairness of the tax system. For Tasmania, this means support for hundreds of thousands of workers.
We're backing young Tasmanians saving for their first home; protecting existing investments; and supporting small businesses, pensioners and affordable housing. Most of all, it means taking responsibility for the future. Every generation should have the chance to build a secure life, earn a fair wage and own a home with rules that do not only favour those who already have wealth.
These bills will not solve every housing or tax challenge, but they are an important step towards a fairer system that rewards work, supports new housing and gives the next generation a better chance. That is good for Tasmania, good for working Australians and good for the country. I commend the bills to the Senate.