Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026

Mr FRENCH (Moore) (11:17): I rise to support the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026. This bill covers a fair amount of ground. It deals with tax practitioners, foreign investment, capital gains tax, renewable energy, mergers, competition policy, philanthropy and tax administration.

That is quite a journey for one piece of legislation—an odyssey, one might say. But there is a clear thread running through it. This bill is about making our economic rules fairer, clearer and more effective.

It strengthens regulation where stronger powers are needed, it removes unnecessary complexity where it serves no useful purpose and it makes sure the tax system applies fairly to everyone who benefits from doing business in Australia. Schedule 1 is a good place to start. It strengthens the powers of the Tax Practitioners Board in response to the weaknesses exposed by the PwC leaks scandal, Australians rightly expect people who receive confidential government information to keep it confidential.

They certainly do not expect that information to become a commercial opportunity. The scandal showed that the system regulating tax advisers needed stronger safeguards. But the weakness was not new.

An independent review in 2019 had already identified a significant gap in the Tax Practitioners Board's enforcement powers. The regulator had too few options between low-level sanctions and the much more serious steps of suspension, termination or civil penalties. The previous government received that recommendation and noted it.

Then, as sometimes happens in government, the recommendation appeared to enjoy quite a few years on the shelf. This government is acting on it. The bill gives the Tax Practitioners Board a broader range of proportionate sanctions.

There will be criminal penalties for unregulated, unregistered preparers as well as strong civil penalties, new consequences for breaches of the professional code, and penalties for false or misleading statements by unregistered preparers. The board will also be able to issue infringement notices, accept enforceable undertakings and impose contingent or interim suspensions.

For the most serious conduct, the maximum period before a person can reapply for registration after termination will increase from five years to 10 years. That matters because regulation works best when the consequences fit the conduct. Not every breach requires the regulatory equivalent of a sledgehammer, but a regulator should not be standing there with a rolled up newspaper when serious misconduct occurs either.

The Tax Practitioners Board needs tools between those two extremes. Most Australians who go to an accountant, tax agent or BAS agent are not tax experts. That is precisely why they are paying someone else.

They are placing trust in that professional, and they should be able to expect competent advice, lawful advice and ethical conduct. The overwhelming majority of tax professionals meet those standards. Strong regulation protects them too, because people who cut corners or provide unlawful advice should not gain commercial advantage over professionals who are doing the right thing.

There has been broad support for giving the board a wider enforcement toolkit. While some stakeholders have raised reasonable questions about safeguards around the new powers—and those concerns should be taken seriously—whenever parliament gives a regulator stronger powers, proportionality and procedural fairness matter. But the answer cannot be to leave a known enforcement gap in place.

If the rules are important enough to have, the regulator must have the tools to enforce them, and that principle runs through much of this bill. Schedules 2 and 3 deal with foreign resident capital gains tax, and the basic principle is straightforward if an Australian investor makes a taxable capital gain from an Australian asset, they can be required to pay Australian tax.

A foreign investor should not receive a better deal simply because their head office happens to be overseas. These reforms clarify that capital gains tax applies where a foreign investor sells assets with a close economic connection to Australian land and natural resources, and that includes certain infrastructure connected with energy transport, telecommunications and water.

Until now, uncertainty has arisen because state and territory property laws can influence whether a particular asset falls within the Commonwealth regime, and that can result in different tax treatment depending on where the asset is located. Commonwealth tax liability should not be an accident of state property law. The legislation establishes a clearer Commonwealth definition and brings Australia's treatment closer to international standards and to the treatment of Australian investors.

It also strengthens the integrity of the regime. Foreign investors disposing of an interest worth $50 million or more where they claim the interest is not taxable Australian property will be required to notify the ATO. The principle asset test will also apply over the 365 days before disposal, rather than simply at the point of sale, and that is sensible.

If tax treatment depends on the economic substance of an investment, we should look at the substance over time. We should not design tax laws around who can take the most convenient photograph on settlement day. The legislation also protects settled historical liabilities.

Foreign investors who have already paid capital gains tax as intended will not be able to reopen those assessments simply to obtain an unintended windfall following recent Federal Court decisions. Australia welcomes foreign investment. We need it.

But welcoming foreign investment does not mean giving foreign investors an advantage over Australians. They benefit from Australian infrastructure, Australian institutions and Australian natural resources. It is reasonable that they contribute fairly.

Foreign investment is welcome in Australia, but fair taxation is part of the deal. Schedule 3 shows that fairness and investment can be balanced. The government recognises that Australia needs very significant private investment in new energy infrastructure, so the bill provides a targeted 50 per cent capital gains tax discount for eligible foreign institutional investors disposing of renewable energy assets until 30 June 2030.

Eligible assets include wind, solar and hydro generation as well as large-scale energy storage such as grid batteries. For indirect investments, at least 75 per cent of the relevant underlying real capital must be attributable to renewable energy assets. This concession is targeted and time limited, and that is important.

We are strengthening the long-term integrity of the foreign resident tax regime while recognising the scale of the investment task between now and 2030. As an electrician, I am reasonably supportive of policies that result in more electrical infrastructure being built—call it professional bias! But the serious point is that building new generation storage and network infrastructure requires enormous amounts of capital.

Government has an important role, but government cannot and should not finance the entire energy transition itself. We need private capital, including international capital, invested in productive Australian assets. The tax system therefore needs to do two things at once: protect Australians' revenue base and encourage investment where Australians need it.

And that is what these schedules do. The concession has an end date because it is designed to address the immediate investment task, not create a permanent, preferential tax treatment. Schedule 4 turns to Australia's merger regime.

The government introduced the largest reform to Australia's merger control system in around half a century. When you make reform of that size, you watch how it operates in practice and refine it where necessary. That is not a sign the original reform was wrong; it is how competent regulation should work.

The mandatory system commenced this year after a transition period designed to give the ACCC, businesses and advisers practical experience with the new framework. These amendments respond to that experience. First, where a merger should have been notified but was not, the transaction will be voidable rather than automatically void.

That is an important distinction, because automatic voiding can create serious consequences for innocent third parties and surrounding transactions. Under these amendments, the ACCC can instead apply to the Federal Court for an order voiding the acquisition. The incentive to comply remains strong, but the consequence becomes more targeted.

Second, where an approved acquisition cannot reasonably be completed within 12 months, parties will be able to seek extensions of up to six months from the ACCC. Commercial transactions do not always run according to the optimistic timetable in the first board paper. Financial charges and conditions need to be satisfied.

Approvals take time. Sometimes reality simply refuses to cooperate with the spreadsheet. Allowing extensions in appropriate cases is common sense.

Third, acquisitions that are unlikely to result in a practical ability to influence competition will not unnecessarily be pulled into the notification system. That is particularly important for venture capital and startup investment. We want the ACCC focused on transactions that that can genuinely harm competition, not wasting resources on low-risk investments that pose little practical concern.

The goal is not maximum regulation; the goal is effective regulation, and that means strong intervention where there is genuine risk and less unnecessary paperwork where there is not. The practical benefit is certainty. Businesses should be able to identify whether an acquisition requires notification, what happens if something goes wrong and how an approved transaction can proceed where unavoidable delays arise.

The ACCC, for its part, should be able to concentrate its attention on acquisitions that could substantially lessen competition. That is a better use of regulatory resources and a better outcome for consumers. Schedule 5 updates Commonwealth legislation to give legal force to the National Competition Policy agreement reached by the Commonwealth, states and territories in 2024.

It replaces references to the 1995 agreement and futureproofs the framework so parliament does not need to amend legislation every time those intergovernmental arrangements are updated. I suspect that even those of us who enjoy parliamentary debate can accept there are better uses of the House's time than repeatedly changing the name of an act. And the broader principle is worthwhile.

Competition puts pressure on businesses to improve services, innovate and offer better value. Competitive neutrality also helps ensure that, where government businesses compete with private businesses, they do so on a fair basis. Schedule 6 and 7 turn to philanthropy.

The bill extends deductible tax recipient status to a number of organisations, helping them attract tax-deductible donations. The DGR changes specifically support the Ross House Trust, Tanarra Social Purpose Ltd and the i4Give Foundation while extending existing arrangements for the Australian Academy of Law and Cambridge Australia Scholarships. These are targeted changes, but they reflect a broader point: governments can continue to support community organisations without telling them how to do their work.

Sometimes the most useful contribution is simply making it easier for Australians who want to give to do so. The bill also renames ancillary funds as 'giving funds', implementing a Productivity Commission recommendation. This is not the most revolutionary proposition ever put before the House—but it is a better name.

If an ordinary person needs a tax lawyer and a Productivity Commission report to work out what an ancillary fund actually does, there is probably room for improvement. 'Giving funds' do what the new name suggests; they allow donations to be pooled, invested and distributed over time to charities undertaking useful work in the community. Sometimes clearer language is a reform in itself.

Finally, schedule 8 makes a technical change to ensure foreign-resident capital-gains-withholding tax credits can be claimed in the same income year in which the underlying transaction is recognised. That reduces unnecessary compliance and avoids some taxpayers needing to lodge two returns for essentially the same transaction. There are few occasions on which I will object to removing unnecessary tax paperwork.

Taken together, these reforms are practical. They strengthen accountability after serious failures in the tax profession. They make sure foreign investors contribute fairly when they profit from Australian land and resources.

They support the investment needed to build Australia's future energy system. They refine the merger regime based on practical experience. They modernise competition law, philanthropy and tax administration.

Good government is not always about creating another rule. Sometimes it means strengthening a rule, sometimes it means clarifying one and sometimes it means recognising a rule that creates paperwork without achieving much and fixing it. A fair tax system depends on people believing that the rules apply properly to everyone—individuals, businesses, advisers and international investors alike.

Fair rules maintain public confidence. Effective regulators protect both honest businesses and the public from those who choose not to play by the rules. That is what this bill seeks to achieve.

I commend the bill to the House.