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

Senator CANAVAN (Queensland—Leader of the Nationals) (11:19): I move: That the question be now put. The ACTING DEPUTY PRESIDENT ( Senator Hodgins-May ): The question is that the question be put. A division having been called and the bells having been rung— The ACTING DEPUTY PRESIDENT: I've just received advice from the clerks that, because this was done under a limitation of time, it's not possible to move the closure motion.

The division is cancelled. Senator CANAVAN: The government hasn't been able to manage the budget, and people now know that they can't manage this chamber. They've clearly stuffed up their hours motion, but they're refusing to see common sense and run this chamber in a sensible way.

All we're seeking to do today is to make sure that there is sufficient debate on the most unpopular, unloved budget in living memory. The government wants to try and move this on straightaway today and avoid a committee stage, which should be occurring. That's what we should be debating in this chamber because the Australian people weren't given this debate before the last election, 12 months ago.

The Australian people went to the polls under the presumption, because the Prime Minister told them so, that there would not be increased taxes on capital gains, there would not be increased taxes on trusts and there would not be increased taxes on negative gearing. The Prime Minister, himself, said that he'd said that 50 times. Yet, less than 12 months later, the Prime Minister walked away from all of those promises, disenfranchising the Australian people.

And now he seeks to gag the people's parliament by limiting debate on these measures today. The reason the Labor Party don't want to debate these measures is that they're embarrassed by them. They're embarrassed by their broken promises, by how these taxes have been received by the Australian people and by the deals they've had to do with the Greens political party that raise taxes even more.

Since becoming Leader of the Nationals, I've been around a lot of the country and I've spent a lot of time in southern New South Wales for the Farrer by-election. I've held four small-business roundtables over the past week—in Rockhampton, Lismore, Bundaberg and Townsville. The thing that has come back to me the most is that people are just desperate right now for a government that helps them deal with costs that are out of control.

The cost of everything is going up and up for families and for small businesses, and they're struggling. They're struggling to hang on to their mortgages and hang on to their small businesses. They want a government that just helps with that.

They want a government that hears their concerns about these issues and comes up with a plan for small businesses. They are starting to lose confidence in the economy; they're seeing demand fall. Some of this is connected, of course, to the fuel crisis we see overseas.

The uncertainty about the global environment is pulling people back. There's a desperate hunger for a government that has a plan to resolve these issues, to give people hope and optimism that the government will tackle these challenges and make things better. People don't expect their governments to make things perfect, but they do expect them to try to make things better.

Even people that aren't directly affected by trusts, negative gearing or the changes to superannuation—which I'll come to—will scratch their heads. They're confused that the government is focusing on all these issues and not on the cost of living, not on the shocking performance of our economy and not on lifting our worst productivity performance on record. Why is the government distracted by what seems to be a series of class war issues microwaved from a failed Bill Shorten campaign?

Everything we're seeing right now, including the super changes overnight, was rejected by the Australian people twice. It wasn't taken to last year's election; it wasn't taken to the election the Labor Party won in 2022. But, in 2016 and 2019, Bill Shorten and the Labor Party went to the election with a platform to change negative gearing rules, to tax trusts and to change the arrangements for self-managed super funds.

They were rejected by the Australian people twice. They were rejected twice when they had that choice, and, now, because the government doesn't have a plan on the economy more broadly, they've reheated these failed policies and said, 'Let's go with that.' They've decided: 'We've got the numbers now. We've tricked the Australian people to vote for us.' They've got the numbers in the House, they've effectively got their numbers in the Senate with their partners, allies and coalition members in the Greens and they're going to force it, ram it, through the parliament with barely any inquiry and not much debate in the Senate.

They'll do the same in the other chamber in the next 24 hours. I don't think what we're debating here is matching the crisis our economy is in right now. When I hear government members speak in this chamber, I don't think they realise the precipice that we are on as a nation.

We have never had a four-year period where our productivity growth has been negative until this government, until these last four years. The Labor Party have been in government now for four years, and over those four years productivity growth not only has been negative for the first time ever in our historical record but has gone backwards by five per cent. It has gone way down.

It is off the charts—negative, down five per cent in just four years. As I said, it has never been negative before. This is important because the productivity growth rate determines how many things we make from the resources we've been blessed with.

And, by God, we've been blessed with a lot of resources in this country. We should be a productive nation; we should be a rich nation. But if that's falling the consequence is that there's too much money in the country chasing too few goods, and when you have too much money chasing too few goods the price of those goods has to go up, the value of money goes down, and we get something called inflation.

So what have we had in this economy? We've now had another outbreak of inflation. Yes, this government inherited an environment where inflation was high, but they took a lot longer to get it down than other countries, that's for sure.

The cost-of-living crisis in Australia was one of the worst post COVID out of anywhere in the world. It came back down, and then what happened as soon as the Reserve Bank lowered interest rates a little bit last year and let the economy run a bit to give people a bit of relief and some hope they might spend some more? Inflation broke out again.

Late last year, inflation started ticking up. By the beginning of this year, before the Iran crisis, our inflation had gone over four per cent a year—it was the highest in the developed world. So let's just be very clear.

The inflation rate in this country was higher than any other developed country in the world prior to the Iran conflict. That's because our economic productivity is not good enough. So what has the Reserve Bank had to do?

They've had to increase interest rates again. They've had to backtrack on their strategy because we have not got a government taking action on spending or economic growth; therefore, the only tool, the only lever, the Reserve Bank has to control inflation is to push interest rates up, which it's doing again. And now we have a situation where instead of trying to fix that fundamental economic issue of productivity, which is related to the high energy costs and massive red tape we've got—the government spending we have as well doesn't help.

Instead of tackling those things which are hard—it's hard to tighten your belts. Every Australian family knows that right now. They've had to do that in the last few years since COVID, but this government hasn't had to do that.

It's hard to do that. It's hard to cut red tape; it's hard to admit that you got it wrong on energy policy. Despite all your promises that bills will be cut by $275, they've skyrocketed, and they continue to go up.

This week has been terrible. There's a bit of a win drought; prices are through the roof again. You can't plan a business and you can't invest in manufacturing in this environment, so our productivity falls.

And, instead of focusing on all those things, the government has continued with what it has been doing, which is the same economic strategy: 'Let's put in more taxes. That'll fix things.' Ironically, there's a part of that which may work to bring down inflation. If we put taxes up high enough, it'll kill economic growth, and we'll have a recession we didn't need to have.

Yes, that will lower inflation. That will see house prices fall. We're seeing that right now.

I don't want people's house prices to fall because we have an economic recession. I don't want to see our inflation rate fall because people are put out of a job. But that's where we're headed to.

If this economy goes south in the next six months, it is on the head of this government. It is on their heads because it is they who have crashed confidence in our economy by unleashing a budget that was not taken to the Australian people—a series of taxes that people did not vote for and a government that has not been able to explain the basic elements of their proposal.

Last week they saw—I've never seen this in my political career—a budget five weeks old be ripped up and the government saying: 'Okay, we got it wrong on elements of the capital gains tax changes. We didn't realise. We forgot to factor in that there are these innovative businesses out there that will be massively disadvantaged.' The government seems completely ignorant of the fact we've had this tech boom.

We've got things called tech startups now. When you put on this massive capital gains tax that they're doing—this will be the highest capital gains tax in the developed world. Indeed, the Prime Minister was asked in the other chamber this week to name another country with a higher capital gains tax rate than we would have under your policies.

He couldn't name one. So we've got the highest in the world. We're seeing in all the developments we've got—the technological developments, the AI and all this stuff—that there are a lot of growth opportunities.

But anyone that goes for growth now gets absolutely smashed under these tax arrangements. So that chokes that off. Now the government is trying to jury-rig some kind of change last week and say: 'Oh, we've issued a consultation paper now and we're going to define what an innovative business is, and then you'll get the discount.

Then these other small businesses will get a capital gains discount too if their turnover is under $10 million.' Why bother then? Why are we bothering with this? I don't think the major problem for this country is a lack of complexity in the Income Tax Assessment Act.

We've got a lot of problems, a lot of problems. But one of them is not a lack of complexity in our income tax laws. Now the government has made those laws more complex, and you effectively need an accountancy degree to understand just the changes the government announced last week.

I read through them. It was ridiculously complex. You'll need to go to an accountant at the very least to work out exactly how you should structure your business just to deal with the changes, let alone the broader tax act we've got.

How much extra cost? How much impact on productivity is that going to have on the Australian economy? In the limited time I've got, I want to make two more points.

I mentioned here that, instead of raising taxes, we should have an economic plan that seeks to restrain the size of government and pull that back a little bit. I want to put in context why I think that's important. In the last budget before COVID, this place spent $479 billion.

In one financial year, $479 billion is a lot of money. That's what we spent in 2018-19, before COVID hit. In this budget that's just been handed down, the government expects to spend $829 billion.

That is a $350 billion increase in annual spending. Every year, we are spending $350 billion more than we did before COVID. That's a big number.

What does it mean? Well, there are about 10 million households in Australia. That means that, on a household basis, your government, since COVID, is spending $35,000 per household per year more.

Every year, we're borrowing this money. We don't have it. So we're putting that on the credit card every year.

Can you imagine if you ran your family budget and, over an eight-year period, blew it out by $35,000 a year and had to go and borrow and put on a credit card? I don't know about others, but my credit card is nowhere near that. You'd need to go and take a loan out again or mortgage your house to survive.

Why is the government getting away with this? What has happened? We've ended JobKeeper and ended all this. 'We had to help people out during COVID.' We ended all those schemes, and then the government used the excuse to go to another level and waste more of your money.

Now they're coming to you and wanting more of that money from your super, from your property investments, from the small businesses and farmers in this country. They're saying, 'We need more money to waste here in this place.' How about, before we introduce new taxes, we cut our own spending first? How about we take care of our own house first before we go and raid other people's houses?

We've got it the wrong way around right now. Because this government doesn't want to make the tough decisions to restrain spending to cut back on waste in this place, they are simply going to raid the piggybanks of other people all around our country. And worse, they didn't even ask those people about those changes first.

A basic right of British peoples that our country inherited is that taxation should not be imposed on you without your consent. People fought wars for that, right? We're about to celebrate one of those wars next week on 4 July—250 years.

They fought that to make sure they could have no taxation without representation. Well, now in this place if this gets rammed through today, we will have taxation on the Australian people, massive taxation, without any representation, without any consent from the Australian people. If the government had any guts, they would take these proposals back to the people.

They ran them through this place without their consent. Have the ticker to go before the people and argue for why you think this is the best thing for the Australian economy, and only then should the Australian people face a higher tax bill. Only if they agree to it, should they.

(Time expired)