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

Senator DOWLING (Tasmania) (11:17): I rise to support the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026. With it having a title like that, you could be forgiven for thinking this is going to be complicated. It's fair to say that Treasury has once again resisted the temptation of a short title.

But the questions underneath it are much simpler and much more important: (1) Can Australians trust professionals who handle their tax affairs? (2) If someone makes a gain from Australian land and resources, are they paying the tax they should pay here? and (3) Are our competition laws strong enough to protect consumers while still being practical enough to let investment happen?

They're pretty simple questions, and they all go to one thing: trust. Trust is part of the infrastructure that makes an economy work. You can go back to the father of economics, Adam Smith, who understood that markets cannot function on self-interest alone.

In his The Theory of Moral Sentiments, he described justice as 'the main pillar that upholds the whole edifice'. That is an important insight. Markets work because we expect contracts to be honoured, we invest because we expect property rights to be respected, we hand sensitive information to professionals because we expect standards to be enforced, and we pay taxes because we expect other people to meet their obligations too.

Trust does not replace rules. Good rules create the conditions under which trust is possible. That is what this bill is about.

Now, most Australians do not spend much time thinking about the Tax Practitioners Board; nor should they have to. They should be able to go to an accountant or tax adviser, hand over some of their most sensitive financial information and trust that the person sitting across from them is properly regulated and acting professionally. The PwC tax leaks matter showed what happens when that trust is abused.

Confidential government information about proposed tax laws was misused for commercial purposes. It was a serious failure of professional standards. But the weakness in the regulatory system did not suddenly appear with PwC.

We can go back to 2019, when the independent review of the Tax Practitioners Board identified a significant gap in the regulator's sanctions framework. At one end were cautions and education, and at the other were suspension, termination and court action. A regulator should not have to be forced to choose between a slap on the wrist and the most serious sanction available.

This bill gives the Tax Practitioners Board a more graduated and practical toolkit. It introduces infringement notices, enforceable undertakings and new suspension powers. It creates new civil penalties for breaches of the professional code and new criminal offences for people providing or advertising tax services for reward when they are not registered.

And, where registration is terminated for misconduct, the maximum period before a practitioner can reapply doubles from five years to 10. That is not about treating every mistake as misconduct; it is about giving the regulator the ability to respond proportionately to what is actually in front of it. It is worth remembering who benefits from that.

The overwhelming majority of tax practitioners do the right thing. For a small-business owner, a good accountant can mean more time running the business and less time at the kitchen table trying to work through tax paperwork. Those professionals should not be undercut by people who are prepared to operate outside the rules.

Good regulation protects consumers, but it also protects honest businesses from competitors prepared to cut corners. The same principle of fairness applies to foreign investment. Australia needs foreign investment.

Tasmania needs foreign investment. It finances projects, helps businesses grow and supports jobs. We should welcome it.

But welcoming foreign investment does not mean surrendering Australia's right to tax gains that are properly connected to Australia. The foreign resident capital gains tax rules have been affected by uncertainty about what counts as real property, including the interaction between Commonwealth tax law and state and territory property law. This bill makes the Commonwealth rules clearer and broader so that assets with a close economic connection to Australian land and natural resources are treated consistently.

There is also a fairly simple economic principle underneath all of that: tax law should follow economic reality. If the value being sold comes from Australian land or resources, the tax outcome should not depend on an ingenious choice of legal wrapper. The bill also introduces some sensible integrity measures.

Where a foreign investor sells an interest worth more than $50 million and takes the position that the gain is not taxable, the ATO will need to be notified, and the principal asset test will look across 365 days rather than only a snapshot at the point of sale, reducing the scope to temporarily alter an entity's asset mix simply to change the tax outcome. There is also a useful lesson in how these reforms were developed.

The initial exposure draft proposed retrospectivity, and stakeholders raised serious concerns about this. The government listened, and a substantive expansion in the bill before us applies prospectively. That is what consultation should do.

It should not merely provide people with an opportunity to speak; it should improve the policy where the evidence warrants it. Schedule 3 shows the same practical approach. At the same time as strengthening the foreign resident CGT regime, the bill provides a targeted 50 per cent CGT discount for eligible foreign investment in renewable energy assets including wind, solar, hydro and large-scale battery storage.

And, after further consultation, the government amended the bill in the House to extend that concession from 2030 through to 2040. That matters, because major infrastructure is not planned, financed, approved or built overnight. If Australia wants long-term capital, our policy settings have to recognise real-world project timeframes.

For Tasmania, this is especially relevant. Clean energy has been part of our economic story for generations. Our hydro resources have supported Tasmanian industry for decades, and our renewable energy advantage gives us an opportunity to attract another generation of investment in storage, generation, transmission and energy-intensive industry.

The opportunity is to use that energy advantage to attract businesses, expand existing industry and create more skilled jobs. But investment needs certainty, so the combination in this bill is deliberate: strengthen the integrity of the tax base while providing a targeted and time limited transition for renewable energy investment. These objectives are not contradictory; good economic policy should be capable of doing both.

The same principle applies to competition policy. Competition can sometimes sound like an abstract economic concept, but it certainly is not. For households, competition means having somewhere else to go when prices rise or service gets worse; for small businesses, it means a genuine chance to win customers from a bigger competitor; and, for the economy, it means businesses have to keep improving instead of relying on market power.

That is why the government strengthened Australia's merger laws. Since 1 January, acquisitions meeting the relevant thresholds must be notified to the ACCC before they proceed. But good regulation is not set and forget.

When a major new regime starts operating, government should pay attention to what happens in practice and fix unnecessary friction when it appears. The early evidence shows the new system can be both rigorous and timely. The ACCC expected around 80 per cent of acquisitions to be dealt with within 20 business days through an early decision or a notification waiver.

Across the 2025-26 data, in fact, 92 per cent of notification and waiver determinations were assessed within the timeframe. This bill also now makes several practical refinements. A transaction that should have been notified will no longer automatically become void.

Instead, the ACCC will be able to ask the Federal Court to declare the acquisition void where that is appropriate. The bill also clarifies control rules so that investments that are unlikely to give an investor meaningful competitive influence are not unnecessarily captured. Not every minority investment is a takeover in disguise, and that matters particularly for venture capital and startup investment, where an investor can acquire ordinary governance rights without actually gaining control of the business.

Where an approved transaction legitimately takes longer than expected to complete, the ACCC will be able to extend the period for completion rather than forcing parties, unnecessarily, back through the process. None of that weakens the central purpose of the merger regime. The ACCC still needs the ability to stop acquisitions that substantially lessen competition.

But being serious about competition does not require us to be enthusiastic about unnecessary red tape. The remaining schedules make a number of smaller but worthwhile changes. They update the Commonwealth law for the 2024 National Competition Policy arrangements, provide or extend deductible gift recipient status for several organisations, replace the obscure term 'ancillary funds' with the clearer 'giving funds' and fix the timing of foreign resident CGT withholding credits so taxpayers are not pushed into unnecessary duplicate returns for the same transaction.

Having worked in economics and business, I've never found the argument about whether we need more regulation or less regulation particularly useful. That is too crude a test. A rule can be tough and still be badly designed.

A rule can appear light touch and still impose enormous costs if nobody can understand how it actually works. The real question is whether the rules are doing their job. Are they protecting people and allowing honest businesses to compete?

Are they stopping misconduct without creating unnecessary barriers? Are they giving investors enough certainty to make long-term decisions? When experience shows that a rule is not working as intended, our government's prepared to fix it.

That is the approach that is reflected in this bill. If you handle another person's tax affairs, you should be accountable for how you conduct yourself. If you make a gain from Australian land and resources, you should meet Australian tax obligations that properly attach to it.

If you run a business, you should have a fair chance to compete on the quality, price and value you offer customers. And, if you're prepared to invest capital in Australia for the long term, you should have confidence that the rules will be clear and workable. This bill strengthens the rules where they need to be stronger, it closes gaps where they have emerged, and it fixes unnecessary friction where experience shows the system can work better.

That is good economic policy, and I commend this bill to the Senate.