MATTERS OF PUBLIC IMPORTANCE

Senator SCARR (Queensland) (15:44): Just for those who are listening or watching, I want to read out this matter of public importance, which the Senate will now be debating, and it reads as follows: The Albanese Government's decision to ram through a massive tax overhaul that imposes a so called "widow tax", higher taxes on some Australian small businesses, and damaging new taxes affecting investment, housing, charities and the broader Australian economy.

Last week, in this place, the Greens and the Labor Party did a deal under which the Labor government rammed through material tax changes which will have a huge impact on the Australian economy and are already having a huge impact on the Australian economy. We saw it just last weekend when, across the country, auction clearance rates in relation to people attempting to sell their houses had fallen through the floor.

They've fallen to levels which have not been seen since during COVID. That's how bad it is. That is the lack of confidence in the Australian property market at the moment we're seeing as a direct result of the Labor Party's introduction of these massive tax changes.

Auction clearance rates—that's the rate at which houses are being sold at auction—across the country are less now than at any other time except during the height of COVID, when, especially in Victoria, people were locked up. That is the undermining of the confidence in the Australian property market caused by this Labor budget, and it's an absolute disgrace. I also want to talk about the so-called widow tax and to explain to people what this means.

There were provisions in the budget that provided for grandfathering with respect to investment properties that are owned as at the date of the budget. They would continue to receive the benefit of the existing regime, and that makes sense on the basis that someone has purchased a property on the basis of the existing taxation arrangements; that property should be continued to be treated the same way whilst it's held by whoever the owners are.

We found out from the Senate that there's a problem with the way the government has drafted this proposal, and there's a problem with the legislation that was passed just last week by the Greens and the Labor Party. If an investment property is held by a wife and a husband, two spouses, and one of the spouses dies, that triggers a change in ownership, and that triggers tax consequences in relation to the surviving spouse.

That's absolutely unacceptable. All those mum and dad investors out there who buy investment properties in their joint names are potentially going to be impacted by this glitch. The second issue is where two spouses buy a property in both their names and then they get divorced.

Again, it's going to trigger potentially disastrous taxation consequences for that couple. What is so surprising is that the Labor government didn't think about this before they put forward these tax changes. These are obvious issues which should have been considered by the Labor government before they broke their promise, which they took to the last election, with respect to making no changes to negative gearing or capital gains tax.

We saw the Treasurer on Insiders on Sunday, when he was specifically asked by the host, 'How are you going to fix it? What are you going to do?' because the Treasurer said, 'We're going to fix it. We're going to do something to fix it,' even though they pushed the legislation through last week.

When he was specifically asked, 'Treasurer, how are you going to fix it?' he couldn't say. He didn't know how they're going to fix it. We have no idea.

There's no detail nor clarity whatsoever. So there will be Australians today who own property in their joint names who are at risk that this issue is not going to be correctly rectified. It is just one example of the unintended consequences which are flowing from the Labor Party's budget, which we saw in reality on the ground over the weekend with that massive fall in auction clearance rates because of an undermining of confidence in the Australian property sector.

It's the same across the board, in the mining sector and biotech sector. Young shareholders and older shareholders have lost confidence to invest in this country because of Labor's budget.