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

Senator GALLAGHER (Australian Capital Territory—Minister for Finance, Minister for the Public Service, Minister for Women, Minister for Government Services and Manager of Government Business in the Senate) (11:03): The government will not be supporting these amendments. The amendments seek to, essentially, do as was in the discussion on the moving of the contingent notice of motion, which is to separate the schedules and not proceed with the CGT and negative gearing schedules in the bill.

I really think this goes to demonstrate in a very clear way the complete lack of economic or budget credibility of those opposite. They sit here, having moved a second reading amendment just a second ago which calls upon us to consider indexing tax brackets in line with the Leader of the Opposition's budget reply, without having that costed, without having any idea how they would fund that, and then try to take out the two elements of the package which then fund the working Australians tax offset as the other component of the package.

What we've done is put a package of reforms together, funded reforms, that take those decisions about CGT and negative gearing and rebalances the tax system so that those earning an income are not having to take on an unfair level or not have a heavier burden, perhaps, than those who earn income from assets, and move it onto a more equal footing. But, in order to do that, yes, we have to make some decisions about negative gearing and capital gains tax which we think are right and fair.

They allow us to ensure that we're giving all of that back across the forward estimates via the working Australians tax offset, which is then coupled with the instant deduction as part of this package. Those two elements feed into the tax cuts that we've already taken through the parliament, which will come in on 1 July this year and 1 July next year. In relation to Senator Chandler's concerns about there being further tranches of legislation, the Treasurer and I have made it clear that when you do complex, big tax reform—which is what our budget does—there will always be a series of bills associated with that.

These bills set that overarching framework and provide the certainty that's needed for investors and the like about the tax arrangements that are going to operate from 1 July next year. That is no different to the way former governments have done significant tax reform. If you go back and consider the last comparable tax reform that was done under the new tax system, I'm advised that there were 30 bills over a period of time associated with that tax reform.

Tax law in this country is complex, and it is appropriate that you deal with some of those in separate pieces of legislation, just as former treasurer Costello did in relation to his reforms under the new tax system. So we have been clear from budget night that that would be the case, but we were also very clear and keen to make sure that there was certainty provided through these bills as soon as possible, and the passage of these bills later today will provide that certainty.

There are already a number of issues that the Treasurer is consulting on with regard to startups and the like. We've got some other amendments that we will move in order to deal with the amendments we've already determined, but we expect there will be issues that we will work through and bring back to this parliament in a second tranche of legislation, and it's absolutely appropriate that we do that.

There will be complex interactions of tax law that will require amendment through a second tranche of legislation. We've been clear about that; it will be coming. But, essentially, the important architectural legislation is what we are debating today.

So I don't think the criticism from Senator Chandler about the staging of our legislative implementation of the budget is appropriate. I disagree with it, and the fact that we have so many TLABs, Treasury law amendment bills, coming through this Senate is an example of the normal course of business when it comes to implementing legislative reform through the Treasury portfolio.

So that's the approach we will take. I think Senator McKim wants to say a few words before 11.15. We do not support the splitting of the bills.

It is packaged reform, and you can't just take one side of it and not look at how you're going to fund the implementation of other elements of the package.