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) (12:38): In terms of the government's decisions, lifting that threshold was the most effective way to reach all 2.7 million active small businesses. It aligns it with other small-business concessions.

We believe that it, in the most affordable and effective way, deals with some of the concerns that have been raised since the reforms have been announced. I thank my adviser for bringing this to my attention. If you go to Budget Paper No. 1, page 149, you can see there's a table there, box 4.2, which shows part of the issue we're addressing here is that under the 50 per cent CGT discount arrangements there were significant periods of time over the last 25 years where investors have been under-compensated for inflation.

Moving to an indexation model will address that—you are taxing real gains.