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

Ms SPENDER (Wentworth) (11:32): I rise to speak on the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026. Although this bill derives its name from schedule 1 of this omnibus bill, my speech will focus on schedules 2, 3 and 4. Schedule 2 of this bill legislates a long anticipated decision by this government to include a definition of 'real property' in the Income Tax Assessment Act for the purpose of CGT for foreign investors.

It has long been a principle of the tax system—and, indeed, international best practice—that foreign residents are liable to tax on gains from assets that derive their economic value from the use of Australia's land and natural resources. But, until now, there has been no actual definition of real property in Commonwealth legislation. As outlined in the explanatory memorandum, this bill is required to remove ambiguity created by the unintended narrowing of adjacent definitions under various state and territory laws that has emerged over time.

The supposed ambiguity particularly relates to the treatment of assets affixed to land. This bill makes clear the expectation that foreign investors pay capital gains tax on such assets affixed to land, including utilities, infrastructure, transmission lines and substations but also wind turbines, solar panels and battery storage. In doing so, as the EM admits, the bill therefore 'broadens' the definition of real property.

It had been clear since the 2024-25 budget that the government intended to clarify this position, as they are entitled to do, to protect the stated policy intent and government revenue. I also don't dispute the principle that assets affixed to land do derive some economic value from Australia's land and therefore should be considered in reasonable terms under foreign-resident CGT regimes.

However, my concerns are twofold. Firstly, I don't accept the government's characterisation of this bill as a clarification. I believe it's reasonable that existing investors feel entitled to transition arrangements.

My second concern is about the impact that perceived sovereign risk might have on foreign investment in Australia, particularly investment required to meet Australia's energy transition. These provisions are being explained by the minister as if they are a simple clarification of the original policy intent. In his second reading speech, the Assistant Treasurer said: This confirms that assets with a close economic connection to Australia … are in scope of the foreign resident CGT rules.

This responds to a longstanding area of uncertainty … But I don't believe that honestly is the case. The foreign investors and tax practitioners I have met with to discuss this bill outright reject this. To them there was no uncertainty and no confirmation required as there was a long precedent that determined certain assets excluded from the CGT regime.

Law firm Clayton Utz described the broadening of the definition of 'real property' as a 'significant diversion from case law', and I have here a previous ATO ruling that summarises such case law to conclude that—in this case, for a wind turbine—the CGT regime does not apply: 'On balance, the circumstances indicate that the objective intention of the affixer is that the wind generation assets do not become part of the land.

Accordingly, the wind generation assets should be characterised as common law chattels.' Incidentally, I am told that this ruling, which I received via email, has since been removed from the ATO website. The assertion that this is therefore a simple clarification is an unfair characterisation of how reasonable investors might have made investment decisions. It's therefore not unreasonable that existing investors could expect concessional treatment for investments that were under the regime they invested under, only to change.

This brings me to the transition arrangements included in schedule 3 of this bill. As first drafted, this bill was retrospective. Understandably, given the very reasonable interpretation of previous case law as I've just described, the draft legislation caused an enormous amount of outrage among foreign investors.

Now, some people won't care about the outrage of foreign investors, but I do think this is for Australia always a question of sovereign risk. I'm therefore pleased that the government has since agreed that this change would be prospective only. Furthermore, I'm pleased that the government has made arrangements in schedule 3 for renewable energy assets to receive a 50 per cent CGT discount for CGT events.

The bill before us does apply that discount only between commencement and 30th June 2030, a grossly inadequate timeline to achieve the stated objectives. Even at its earliest possible commencement, that window would be 16 days shorter than the average development approval timeline for onshore wind in New South Wales over the past five years. In other words, a project could exhaust the entire concession period before it had even been approved.

Foreign investors in clean energy assets tell me their average holding period is eight to 10 years, after which they typically sell the completed infrastructure on. Under the originally proposed 3½-year transition, any investment made in the last four to six years would be unlikely to have seen any benefit from this arrangement at all and would be paying the full 30 per cent rate on disposal.

If it stayed at 2030, I honestly believe this would be in bad faith, and I think investors would have been reasonably disappointed with this. Again I raise the question of sovereign risk because Australia must maintain its reputation as a safe and stable country for investors to invest in—particularly those helping to grow Australia's energy infrastructure that we desperately need.

I have been engaging with both the sector and the government on these issues, and, while many in the sector would like to see the transition period extend to 2050 to support Australia's target of net zero by 2050, I believe the worst of these unintended consequences could be avoided with a date of 2040 while still preserving the policy intent. I really recognise and acknowledge the assistant minister's engagement with the crossbench and me as well as with the sector on this issue, and I'm very pleased to see that the amendment has been circulated extending the concession until 2040.

Australians are already paying for climate change. In June, the New South Wales Net Zero Commission put a number on it. University of New South Wales modelling found that 1.2 degrees of warming already locked in has been quietly eroding the state's economy for decades to the tune of roughly $21,000 per person in lost output in 2024 alone.

Deloitte's forward look is worse: on the world's current trajectory, the average New South Wales worker is about $3,500 a year poorer every year for the next 50 years and a family of four faces a $3,000 higher annual grocery bill by 2070. That is not a 2050 problem; that is a payslip problem, it is a cost-of-living problem and it is already here. So let me say plainly that there is no pace of decarbonisation in this country that is too fast if we can do it economically.

We must at an absolute minimum meet our 2035 target, and there is no version of that arithmetic that works without first decarbonising electricity and building the energy assets that we need. So what does this actually require? AEMO's 2026 Integrated system plan has grid-scale wind and solar rising from 23 gigawatts today to 61 gigawatts by 2030.

That is close to 10 gigawatts a year every year, starting now. Last year we switched on less than six, but, worse, last year just 2.3 gigawatts reached financial close, down 46 per cent on the year before—one of the weakest years in a decade. Capital committed to new generation fell from $9 billion to $4.4 billion.

We can't build by 2030 what we don't commit to today. We are investing at a quarter of the required rate, and the gap is widening, not closing. Among the investors who actually write the cheques, just eight per cent believe we are on track.

Tax treatment alone cannot bridge that gap, and no-one is pretending that it can. The Clean Energy Investor Group's latest survey found that 77 per cent of investors say Australia's investment environment has deteriorated over the last year, with transmission delays now the single biggest barrier. Behind that are planning approvals, grid connection, curtailment risk, community opposition and the persistent fog around when coal is actually going to close.

Just 58 per cent still rate Australia as an attractive destination, down from 69 per cent a year ago. The government needs to be laser focused on every one of these because these are the main game. This is why tax changes still matter.

Foreign investors supply around three-quarters of clean energy investment in this country. They are not reading our budget papers looking for reasons to stay. They are pricing risk, and every change that arises without warning, without grandfathering and with a transition window shorter than the life of the asset gets priced in as a higher cost of capital on every project forever.

I want to stress that I understand the motivations of this bill. I recognise that these changes are not the biggest impediment to our transition, but they don't land in isolation. They land on top of the transition delays, on top of connection queues, on top of coal closure uncertainty and on top of changes to thin cap and reporting requirements.

They have the danger of accumulating into a slowly decaying investment environment. I commend the government, and I particularly commend the minister, on the sensible amendments they have made since the exposure draft. The bill is better for the consultation process and the government's good faith engagement with the crossbench.

It's an approach I really encourage them to take—so thank you. I'd also like to briefly touch on schedule 4 of the bill. Schedule 4 addresses some of the core concerns raised during the first six months of the new merger regime, and I want to commend the government for listening and acting on that feedback swiftly.

I've been contacted by people, particularly within the venture capital sector, who were particularly concerned with the reporting for minority interests which were deemed as exercising joint control, which created significant, unnecessary and onerous reporting requirements for potential acquisitions from minority partners. The feedback from the sector was that the interpretation of the law was significantly outside the intention of the law—certainly when it was first explained.

That was of enormous concern. It was actually, again, slowing down investment in some of our fastest growing and most important sectors. I raised this directly with the minister for competition at the time.

I'm really pleased to see the government acted swiftly on this, and I have had feedback to say that the government's swift action on this and bringing forward of this bill have meant that the sector is already recognising the changes, and this is making a significantly positive impact on the investment environment, which is so important. So I thank the government and the minister for this.

Again, on behalf of my constituents, I'm grateful to the ministers for the work that they have done to bring this bill to a place that is a very sensible compromise for many and still supports the transition.