Treasury Laws Amendment (Delivering an Efficient and Trusted Tax System) Bill 2026; Second Reading

Continued the debate

Thistlethwaite argued that the taxation system was broken and unfairly burdened essential workers while benefiting asset investors. Thistlethwaite stated that reforms to negative gearing and capital gains tax would redirect investment toward new housing supply, supporting approximately 75,000 Australians into homeownership. Thistlethwaite highlighted immediate cost-of-living relief measures, including legislated tax cuts, a $250 working Australians tax offset, and a $1,000 instant tax deduction. Thistlethwaite also noted that Schedule 5 would increase Medicare levy low-income thresholds by 2.9 per cent to align with inflation, protecting over one million low-income earners. Additionally, he explained that Schedule 6 would extend the period pensioners can travel overseas before losing their supplement from six to 12 weeks, while ceasing payments for those living abroad permanently.

Government response

Mulino commended the bill for modernising tax administration and strengthening system integrity. Mulino confirmed that Schedule 1 removes the $2 minimum threshold for deductible gift recipient donations to support philanthropic giving. Mulino noted that Schedule 2 requires trustees to report beneficiary tax file numbers directly in tax returns to improve compliance and prefilling capabilities. Mulino stated that Schedule 4 excludes gambling and tobacco activities from R&D tax incentives, except for harm minimisation research, to prevent public subsidisation of harmful industries. Mulino acknowledged an amendment moved by the member for Mayo regarding online gambling harms and highlighted broader government reforms to protect children from wagering advertising. Mulino concluded that the bill delivers a fairer framework for tax and pension systems.

Opposition response

McCormack opposed the bill, arguing that the government had breached public trust through inconsistent policy announcements and failures in fuel supply logistics during sowing season. McCormack claimed that changes to capital gains tax and trust laws would negatively impact farmers, small business owners, and veterans, particularly regarding capped allied health services. McCormack asserted that removing tax incentives for investment would reduce individual savings, increasing future reliance on government pensions and public health systems. McCormack described the legislation as part of a broader pattern of breaking election promises and undermining aspiration. McCormack called for the bill to be referred to the Senate Economics Legislation Committee for proper scrutiny rather than being rushed through parliament.