Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026
Senator LIDDLE (South Australia—Deputy Opposition Whip in the Senate) (12:12): Senator Canavan is right: the Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026 and the process that led to it coming into this place are nothing like the title of this bill. It was not efficient, nor should it be trusted. The name of the bill is deceptive, to say the least.
The coalition, however, will not stand in the way of this bill's passage. It is part of the Albanese Labor government's so-called tax reform package but is truly yet another toxic tax on hardworking Australians. No fewer than 50 times did the Prime Minister say that he would not do this, yet he did exactly what he said he would not do.
The Prime Minister didn't just change his mind. All of us have been hoodwinked. What we have here is more rushed legislation that follows a sham legislative review process—only two days of review—for major changes to our tax system.
We heard from ACOSS, the Australian Council of Social Services, and the unions on tax reform. On full display is contempt for the process of this parliament and, worse, contempt for people who will be affected—that is, most Australian taxpayers, hardworking Australian taxpayers. Australian taxpayers will be impacted most because they work hard for every dollar.
These are the Australians that choose to forgo spending their money at the cinema, on a car or on something else. Instead, they invest it, with the hope of financial return for the decisions that they've made. There are many words that could describe what this government has done in promising the Australian people it would not do what it has just done.
Australians know a broken promise when they see and hear it, but it will take time for the true consequences of this so-called tax reform to become clear. In my home state of South Australia, we've watched the cost-of-living pressures bite harder than almost anywhere else in the country. The reality is that our state has a different demographic and it will mean the impact will be felt strongly in our state.
Make no mistake: this bill is bad, but the coalition is not saying no to everything in it. The coalition does not oppose excluding tobacco and gambling activities from the R&D tax incentive. That incentive has traditionally been broad based and industry neutral.
If you are undertaking eligible R&D activity, you qualify—regardless of whether your business happens to be favoured by the government or not. That neutrality matters for business confidence. And it is bad news when a government starts picking winners and losers.
We support this schedule, but we want to be clear: we do not want our tax system to become full of political decisions about who should be winners and losers. What the government won't admit with this change is that it has lost complete control over the illicit tobacco industry nationwide. And there are no tobacco companies in Australia currently receiving the R&D tax incentive.
So this exclusion does nothing to address the actual problem; it is simply there to paper over this government's own abject failure. This is one of the biggest public policy failures in Australian history. In the 2022 budget, the projected tobacco excise for 2025-26 was $13.3 billion.
By the 2025-26 MYEFO estimate, collections had fallen to $7.3 billion—a reduction of $6 billion in that single year alone. It has gone down even further since the budget, not so long ago. More Australians are smoking, not fewer, because illicit tobacco has made cigarettes far cheaper than they have been in recent history.
That is now showing up clearly in wastewater data right around the country, including in my home state of South Australia. The result is: a government that has lost billions in tax revenue—revenue that could have funded genuine cost-of-living support without needing to legislate yet more taxes on hardworking Australians—instead, having run out of money through its own mismanagement, has come after yours.
While we lose billions in revenue under Labor, those in organised crime are just having a ball; they're having a great time in the black market—making heaps of money! An essential change within this bill is the increase, also, in the Medicare levy low-income threshold, so the levy keeps pace with inflation. The coalition, of course, supports this.
Without it, people would effectively be hit by bracket creep on the Medicare levy surcharge. We know how much Labor likes the sneaky tax grab called bracket creep. But here is what's revealing about this government's priorities.
This change is itself an admission of the damage that bracket creep does to ordinary Australians. If the government understands that bracket creep on the Medicare levy needs fixing, why does it reject the coalition's Tax Back Guarantee, which would address bracket creep permanently across all income tax thresholds? Just ask yourself that question: why would it push back on that?
You cannot claim to understand the unfairness of bracket creep in one schedule of a bill while refusing to fix the same unfairness everywhere else—unless your government has simply become reliant on that quiet, sneaky, creeping tax to fund its own mismanagement. The coalition's Tax Back Guarantee will ensure Australians are not taxed more simply because of inflation.
From 2028-29, the coalition will index the bottom two income tax thresholds to inflation, fully protecting 85 per cent of income earners, with relief of around $250 in year 1, growing to more than $1,000 a year by year 4 for a typical worker on $70,000. From 2031 to 2032, we will index the top two thresholds as well. This is generational, bold reform.
It is fair, simple and honest. This is not the fake reform dished up by Labor under this dirty bill. It respects taxpayers' money rather than secretly stealing it by stealth through an inflation tax every year, and it will back Australians, including the small-business owners across Australian suburbs and regions who work hard, take risks and invest in their own future.
As Deputy Chair of the Economics Legislation Committee, I did not have to imagine the damage these broader budget tax changes are causing. I heard it directly in hearing after hearing—submission after submission—from the very businesses, investors and industry bodies this government claims to be governing for. The Property Council of Australia said, 'The combined effect of these measures is to increase uncertainty for the businesses and investors that develop, own and invest in Australia's built and city-shaping assets.' They warned: At a time when governments should be focused on improving productivity, lowering delivery costs and removing barriers to investment, the Budget instead places new tax burdens on capital formation, enterprise and aspiration.
And they couldn't tell us how productivity—the one thing we need to improve in this country—relates to these reforms. That's because these are sham reforms. They will have no impact on productivity, and we heard that over and over again from experts in the sector.
Master Builders Australia, together with the Property Council of Australia and the Real Estate Institute of Australia, commissioned an independent piece of modelling on the overall impact of this budget. They found that the overall effect of the federal budget will see new home construction go backwards and rents rise higher than anticipated. You'd think they'd know about it.
They're the people that build the houses, rent the properties and sell them. I think they have more of an idea of what impact this is going to have than the people sitting on the other side of this chamber. Over the next four years, this budget will cause new housing supply to fall by more than 8,700 dwellings, rents to increase by up to $9 a week, GDP to reduce by $864 million and construction jobs to fall by more than 3,800.
We heard it over and over again. They'd done their homework, unlike those on the other side. If you'd have heard the Treasurer's interview on the weekend—he couldn't even answer basic questions about his own budget and the bill.
We see the Greens over there, who talk really big about grandfathering—the thing that protects the Prime Minister's own assets and his own investment plan—and now we don't hear it at all. Instead, they came up with self-managed super funds—'Let's go after them instead; let's restrict them' just to get the dirty little deal they got with the Labor Party. That dirty deal will have an impact on a significant number of Australians, changing the investment plans and the planning of Australians.
On this side, we know that uncertainty is a killer of investment. Uncertainty is a killer of aspiration. That's the blueprint of the Australian Labor Party.
This is friendless when it comes to issues of productivity, when it comes to issues of aspiration and when it comes to opportunity, including for young people. The Housing Industry Association warns the committee that progressing such significant change so rapidly risks unintended consequences. Who'd have thought!
Here we have the Treasurer, who's thinking about further changes because of this shoddy bill that he brought into this place, and a committee process that wasn't given the opportunity to explore these issues as it should, where the submissions that were made by people to that hearing weren't even uploaded by the time this bill was brought into this place. That's the disrespect the Labor Party has not just for this place but for the Australian people—hardworking Australians.
As for the Greens, down the end, they couldn't care less. They're just happy to get a dodgy, dirty deal. The Australian Chamber of Commerce and Industry told us they were alarmed by the government's approach because there was improper consultation with affected stakeholders and there wasn't a clear understanding of the consequences.
Well, spoiler alert—even the Treasurer himself doesn't know about the unintended consequences. He's still working it out, still considering it. The Business Council of Australia put it most bluntly of all: the consequence of this bill, including the impacts on investment, have not been properly assessed by the sector, it's been needlessly rushed, and that's reckless.
The Business Council reminded us that the only sure way to reduce the price of housing is to increase the supply of new dwellings and reduce the cost of constructing them. Just about everything in this budget does the opposite. I sat in those hearings listening to industry body after industry body deliver the same message, with slightly different words: this process has been rushed, there was poor consultation, and the consequences of those actions belong to the Labor Party and will be passed on to ordinary, hardworking Australians who want to invest in their futures and who want to invest the dollars they worked hard to earn to make more, if they've been lucky enough to do so.
South Australians looking to build a first home, to find an affordable rental or to see new housing supply finally catch up with demand in our state will feel the effects of this recklessness for years to come. This measure is expected to save the budget $218 million over the forward estimates and $63 million a year ongoing. We need to make savings where we reasonably can, and the coalition is ready to support this government when it does—when the ideas put forward are sensible, when they've been properly explored.
That's sensible. The removal of the outdated $2 minimum threshold for tax deductible donations? Well, of course that makes sense.
What doesn't make sense is the rushing through of this legislation—legislation that Australians did not vote for. They didn't vote for higher compliance costs, they did not vote for a tax system riddled with political winners and losers, and they did not vote for a government whose own budget—on the evidence of the Property Council, Master Builders Australia, the Housing Industry Association and the Australian Chamber of Commerce—will shrink housing, push up rent, cost jobs and, all the while, mean industries and Australians will suffer.
(Time expired)