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

Senator CHANDLER (Tasmania) (10:53): by leave—In respect of the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, I move opposition amendments (1) to (4) on sheet 3882 together: (1) Clause 2, page 2 (table items 2 to 4), omit the table items. (2) Clause 2, page 2 (table item 5), omit the table item. (3) Schedule 1, page 3 (line 1) to page 47 (line 24), to be opposed.

(4) Schedule 2, page 48 (line 1) to page 53 (line 11), to be opposed. These amendments go to a simple principle: that Australian families and businesses should be better off, not worse off, because of tax reform. The opposition believes in a lower, simpler and more certain taxation system.

We want to deliver lower income taxes permanently and ensure governments cannot increase taxes without proper scrutiny and the passage of new legislation. What is before us today, as I have said many times now in this chamber, does not meet that test; in fact, it comes nowhere near it. I want to be clear once more: what this government is proposing is not genuine tax reform.

This is a bad deal stitched up together between the government and the Greens. But, deal or no deal, the coalition remains unconvinced that the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 leaves Australians better off. For that reason, we cannot support schedules 1 and 2 of this bill, which contain the provisions in relation to changes to capital gains tax and the provisions in relation to changes to negative gearing, and we will not support the associated Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026.

This debate is very simple. Capital investment by everyday Australians is made using income that has already been taxed. Capital gains tax is not some separate tax in isolation; it is, in effect, another layer of income tax.

Under these changes, Australians will pay tax when they earn their income, and then again if they take the risk to invest and build something more. They work hard and they take risks, and yet under these changes they will be left with less. That is not fair and it isn't right.

In fact, the day that these bills pass will be the day that Australia will become the country with the No. 1 highest capital gains tax in the world. That simply does not make sense. The Senate is being asked to legislate what is, in reality, an income tax increase—an increase that was not put to the Australian people at the last election and an increase that the government repeatedly assured voters, time and again, that it had no intention of pursuing.

Remember the Prime Minister's words: My word is my bond. The last six weeks in this place and outside this place, as these laws have been debated amongst the community, and the business community in particular, have demonstrated just how inaccurate the Prime Minister's assessment was when he said that his word was his bond. Clearly, that was not true.

This is a proposal that is so complex that, through the sham Senate inquiry process that we held for these bills, even accounting and advisory professionals advised that they cannot clearly explain these changes to their own clients. That's a pretty galling situation for professionals to be in, and, as I've said previously, they didn't get any help or guidance from Treasury officials who came to the Senate inquiry clearly unable to answer basic questions about how this legislation would operate.

This legislation is a regime that leaves key definitions unresolved and significant matters to be determined later through delegated legislation. Again, this is far from a perfect situation for Australian taxpayers. Taxpayers deserve certainty when it comes to the system they are operating within.

What we will be doing today when these bills inevitably pass this chamber, because the government has done a deal with the Greens to facilitate that, is setting in motion changes to the taxation system that are not yet fully understood or fully defined. This is a system that is expected to impose hundreds of millions of dollars in compliance costs each and every year.

In a situation where Treasury can't answer basic questions about how the legislation is going to operate, when we have financial professionals saying that they don't know how to advise their clients on how the changes are going to operate, I fear that those estimations of the compliance costs will end up being woefully under what they actually end up being, because we don't know the full extent of what we are being asked to agree to today.

These changes will cause real and avoidable harm to the housing market, to investment in resources, to small- and medium-sized businesses, to innovation, to the integrity of the taxation system itself, as I've said, and even to the charitable sector. Despite all this, this government, backed by the Greens, has been pressing on with this plan. I've lost count of how many different off-ramps we've tried to provide the government.

Indeed, Senator Pocock and I just tried to provide an off-ramp in referring the problematic schedules in relation to CGT changes and negative gearing changes off to a further Senate inquiry. Those Australians listening along at home today can be very sure that this government knows that there are issues with this legislation. They would have been listening along to the Treasury officials that appeared at our Senate inquiry.

They know that there are basic questions that cannot be answered. Indeed, I suspect when we get into the Q&A section of the Committee of the Whole consideration today, it will again become abundantly clear that there are questions yet to be answered from this government in relation to this legislation, yet they are pressing forward. You can't make decisions if you don't have all the requisite information in front of you, and I think it is really problematic that that is what we are being asked to do here today.

We have seen an extraordinary process unfold with this legislation. Amendments have been circulating for days. Further government amendments have been introduced following last minute carve-outs announced by the Prime Minister and the Treasurer.

That tells its own story. It tells us that these tax policies were rushed. It tells us that it was being negotiated on the run.

In fact, it was clearly being negotiated quite quickly. I think I made comments in the media at the start of the week that I anticipated that at some point in the fortnight a dodgy deal would be reached. I had no idea that it was about to happen in the next 24 hours.

This tells us that key elements of this bill have been treated as bargaining chips, whether we're talking about ministerial powers, definitions or the scope of application. The most significant amendments are not coming from scrutiny; they're not coming from consultation—we know that because of the rushed inquiry process that we've had to go to. They are coming from the government itself trying to fix its own flawed legislation in real time.

Australians deserve so much better than this. They deserve so much better than what they are getting from this government. They deserve a tax system that is stable, predictable and fair.

They deserve reform that encourages investment, not punishes it. And they deserve honesty about the impacts of what is being proposed and how much it will cost to implement what is being proposed. They don't deserve a measure that was ruled out before the last election, several times, only to be introduced in this place 12 months down the track, in a rushed manner, where people have not been able to fully consider the consequences.

Let us not forget: the government does not have a mandate to make the changes that they are proposing here today because they did not take these changes to an election. The coalition's position is clear. We support sensible tax reform, we support lower taxes and we support a system that rewards effort and investment.

Maybe, if that's what this government was doing, we would be able to support what they are trying to achieve here today—but it is not and we cannot. That is why I'm moving an amendment seeking to move items (3) and (4) on sheet 3882 together, just to clarify. This amendment will remove schedules 1 and 2 from the bill, the provisions relating to capital gains tax and negative gearing changes, to keep the taxation system fairer, simpler and more certain.

I commend these amendments to the Senate, because, like I say, Australians deserve much better than what they're getting from this government.