Treasury Laws Amendment (Tax Reform No. 1) Bill 2026; Consideration in Detail

Steggall supported the negative gearing and income tax cut schedules but opposed the broad application of capital gains tax changes to shares, startups, and business assets. Steggall argued that the legislation should target speculative investment in established housing rather than productive enterprise and long-term savings. Steggall moved an amendment to restrict schedule 1 to real property only, allowing the parliament to debate other asset classes after further consultation and modelling. Steggall expressed concern that the lack of clarity regarding carve-outs created uncertainty for small businesses and ordinary investors.

Spender criticised the bill for retaining $77 billion in revenue for the government rather than returning it all to taxpayers and for being rushed through parliament. Spender argued that the capital gains tax indexation model was flawed and proposed a reduced flat discount of 35 to 40 per cent instead. Spender moved three amendments: to exclude active businesses from the new indexation regime, to allow regulation to address the mismatch between real gains and nominal losses, and to replace the minimum real tax rate with income averaging over the life of the asset. Spender believed these changes would improve fairness and simplicity while maintaining revenue neutrality.

Ryan focused on the need to modernise the small business capital gains tax concession regime, noting that thresholds had remained unchanged for nearly 20 years. Ryan argued that the current limits of $2 million in turnover and $6 million in net assets no longer reflected the realities of modern small businesses due to inflation. Ryan moved amendments to index the net asset value test in line with the consumer price index, aligning it with recommendations from the 2005 tax review. Ryan sought to ensure that concessional tax treatments remained accessible to small businesses operating at a scale consistent with current economic conditions.