The Albanese Government taxes aspiration. The Coalition backs aspiration.

I rise to speak on the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026.

These Bills reveal something much bigger than a debate about tax rates.

They reveal a fundamentally different vision for Australia's future.

The Coalition believes Australians should be encouraged to buy a home, build a business, invest, save, create wealth and leave something better for their children.

We believe the role of government is to help Australians stand on their own two feet.

The Albanese Government increasingly appears to believe something different.

Its answer to almost every challenge is a bigger government, higher spending, higher taxes and a greater role for Canberra in people's lives.

These Bills are the clearest expression yet of that philosophy.

They target investment, housing, entrepreneurship and wealth creation at a time when Australia desperately needs more investment, more housing and more economic growth.

Before discussing the consequences of these measures, it is important to understand what is actually being proposed.

The package contains four major reforms.

First, it abolishes the existing 50 per cent capital gains tax discount for future investments acquired after 1 July 2027 and replaces it with an inflation-indexation method for calculating taxable capital gains.

The Government argues this is a fairer way of taxing investment returns.

Second, it significantly restricts negative gearing arrangements for future residential property investments.

Third, it introduces a Working Australians Tax Offset.

Fourth, it creates a $1,000 standard deduction for work-related expenses and tax agent costs.

The Coalition supports measures that simplify the tax system and reduce compliance costs for working Australians. That is why we support Schedules 3 and 4.

However, we strongly oppose Schedules 1 and 2 because they go directly to the heart of Australia's investment system.

Whether the Government describes the change as indexation or tax reform, the economic question remains the same:

Will it encourage more investment or less investment?

Will it result in more housing or less housing?

Will it strengthen incentives to save, invest and take risks, or weaken them?

Treasury's own modelling suggests the answer is clear.

Deputy Speaker,

Before we debate whether Australians should pay more tax, we should ask a more fundamental question.

Why do we tax in the first place?

Australians accept taxation because government has important responsibilities.

We fund defence.

We fund Medicare.

We fund schools, roads and hospitals.

But taxation is not an end in itself.

Taxation is the price citizens pay for effective government.

Australians are entitled to ask whether they are receiving value for money.

Australians are already paying more tax than ever before.

Government spending continues to grow.

Debt continues to grow.

Yet many Australians feel they are receiving less in return.

Housing affordability is deteriorating.

Infrastructure is struggling to keep pace with population growth.

Small businesses are under pressure.

Families are confronting the worst cost-of-living squeeze in a generation.

The Reserve Bank has repeatedly warned that strong government spending contributes to demand in the economy and makes the task of controlling inflation harder.

Governor Michele Bullock has made clear that government spending contributes to inflationary pressures.

That matters because inflation is itself a tax.

It erodes savings.

It reduces purchasing power.

It drives up mortgage repayments.

And it keeps interest rates higher than they otherwise would be.

Australians therefore have every right to ask: if the Government wants more tax revenue, has it first demonstrated that it has controlled spending?

Has it shown taxpayers they are getting value for money?

Because asking Australians to pay more tax while inflation remains elevated and debt continues to climb is not genuine reform.

Australia today also faces a serious productivity challenge.

The Productivity Commission has repeatedly warned about weak productivity growth.

Treasury itself has identified productivity as one of the greatest challenges to future living standards.

Former Reserve Bank Governor Philip Lowe put it simply when he said productivity growth is the key to rising living standards.

Without productivity growth there can be no sustainable increase in wages, no lasting improvement in living standards and no durable solution to budget pressures.

Yet these Bills increase taxes on capital, investment and risk-taking at precisely the time Australia needs more of all three.

The OECD has consistently observed that taxes on capital are among the most economically damaging taxes because they directly affect investment decisions and long-term growth.

When governments increase taxes on investment returns, investment falls.

When investment falls, productivity growth slows.

When productivity growth slows, wages suffer.

And when wages suffer, living standards suffer.

That is not ideology.

It is economics.

One of the most extraordinary aspects of this debate has been Treasury's defence of these measures.

The Government argues that replacing the capital gains tax discount with inflation indexation is a fairer way of taxing investment returns.

That is a legitimate policy debate.

What is harder to reconcile is Treasury's own modelling.

Treasury forecasts approximately 35,000 fewer homes and around 75,000 fewer investor-owned dwellings over the next decade.

Those forecasts are only possible if investors respond to the incentives created by the tax system.

If those housing losses occur, then the policy is clearly reducing investment.

Treasury's own modelling therefore confirms the Coalition's central concern:

When governments increase the effective tax burden on investment, they get less investment.

Nowhere is that contradiction more obvious than in housing.

Australia does not have a tax shortage.

Australia has a housing shortage.

Every serious analysis of the housing market points to the same conclusion: we need more homes, more supply, more construction and more investment.

Yet the Government's response is to increase taxes on the very people who finance a significant share of Australia's housing stock.

Every policy setting should currently encourage housing investment.

Every incentive should encourage housing construction.

Instead, Treasury's own modelling forecasts fewer homes being built.

Former Reserve Bank economist Dr Peter Tulip has repeatedly argued that Australia's housing affordability challenge is fundamentally a supply problem.

The Property Council and Urban Development Institute have consistently argued that increasing supply must be the central objective of housing policy.

Yet these measures move in the opposite direction.

If you reduce investment in housing, you reduce housing supply.

If you reduce housing supply while population growth remains strong, prices rise, rents rise and affordability deteriorates.

The people who pay the price are renters, first home buyers and young Australians already struggling to get ahead.

Deputy Speaker,

Statistics matter.

Economic modelling matters.

But ultimately economic policy is about people.

It is about the decisions Australians make every day to work hard, save, invest, build a business, buy a home and create a better future for their families.

Since these measures were announced, I have spoken to many constituents across Lyne who are deeply concerned about what they mean.

Jordan is a 27-year-old from my electorate.

Before the Budget she had mortgage pre-approval and was actively pursuing her dream of home ownership.

Following the Government's changes, she was informed by her mortgage broker that her borrowing capacity had been reduced by approximately $200,000.

Two hundred thousand dollars.

That reduction has effectively ended her ability to purchase a home in the area where she hoped to live.

Jordan told me she now struggles to see the point in working and saving if she is effectively being locked out of opportunities to invest and build wealth.

I also spoke with Geoff from Forster.

He worked hard for decades, delayed retirement and invested in property instead of building a large superannuation balance.

Today he is self-funded and receives nothing from government.

His concern is that these changes will force him to increase rents because the economics of providing rental accommodation will fundamentally change.

His fear is simple: fewer investors will mean fewer rental properties and higher rents.

Leigh from Tinonee put it another way.

He asked:

"What have I done to justify being penalised by this Treasurer and this Government? All I have done is save and work."

Those questions go to the heart of this debate.

People increasingly feel government is becoming more interested in redistributing wealth than helping Australians create it.

They see governments talking about fairness while making it harder to save, harder to invest and harder to get ahead.

And they ask a simple question:

When did aspiration become something to be taxed rather than encouraged?

Deputy Speaker,

At its core, this debate is about wealth creation.

For decades Australia pursued a simple proposition: that ordinary people should be able to build wealth.

Not because wealth itself is the objective, but because wealth creates independence.

Wealth allows people to own a home.

Wealth allows people to retire with dignity.

Wealth allows families to withstand economic shocks without relying on government.

A healthy society is one where more people are financially independent, not less.

Yet these reforms send precisely the opposite signal.

They tell Australians that when they save, government wants a larger share.

When they invest, government wants a larger share.

When they build an asset, government wants a larger share.

And when they succeed, government wants a larger share.

Perhaps the most troubling aspect of these Bills is that they arrive at a time when the Commonwealth is already receiving substantial windfall revenue gains.

Inflation has boosted tax receipts.

Bracket creep has boosted tax receipts.

Higher nominal incomes have boosted tax receipts.

And according to the Budget papers, Australians will pay around $77 billion more in tax over the forward estimates.

Yet despite this enormous increase in taxation, debt continues to grow.

Government spending continues to grow.

And deficits remain embedded in the forward estimates.

Australians are entitled to ask a simple question:

If this Government cannot exercise spending restraint when revenue is rising, when exactly will it?

If this Government cannot repair the budget during a period of windfall tax collections, when does it intend to do so?

Historically, governments used revenue windfalls to repair the budget and prepare for future economic shocks.

This Government has treated windfall revenue as an invitation to spend more.

Australian families have carried the burden through higher mortgage repayments, higher rents, higher grocery bills and a higher cost of living.

And now, rather than demonstrating spending discipline, the Government wants Australians to pay even more tax.

That is the fundamental problem with this package.

It is not being driven by economic necessity.

It is being driven by a Government that has become addicted to spending and now needs higher taxes to sustain it.

Deputy Speaker,

There is another tax Australians pay every year.

It is called bracket creep.

And it is one of the most insidious taxes in our system.

As inflation pushes wages higher, Australians move into higher tax brackets even though they are often no better off in real terms.

The result is that government automatically collects more tax while Australians keep less of what they earn.

It is taxation by stealth.

That is why the Coalition's Tax Back Guarantee represents a far better approach.

Rather than increasing taxes on investment, savings and entrepreneurship, the Tax Back Guarantee protects Australians from being pushed into higher tax brackets simply because inflation has increased their nominal income.

It restores a simple principle.

If government wants to increase taxes, it should have the courage to ask voters for permission.

It should not rely on inflation quietly doing the work.

By indexing income tax thresholds to inflation, the Tax Back Guarantee would strengthen incentives to work, improve transparency and ensure Australians keep more of what they earn.

That is genuine tax reform.

It rewards effort.

It encourages aspiration.

And it protects Australians from one of the most persistent forms of taxation by stealth.

Deputy Speaker,

This Budget was sold to Australians as a Budget about fairness.

But it is increasingly being revealed as a Budget of broken promises.

A Government that promised not to change negative gearing is changing negative gearing.

A Government that promised not to change capital gains tax is changing capital gains tax.

A Government that promised relief from cost-of-living pressures is presiding over higher taxes, higher spending and higher debt.

And all the spin in the world cannot make it shine. Because Australians understand a simple truth. You cannot tax your way to prosperity.

You cannot tax your way to housing affordability.

And you cannot build a stronger economy by making it harder for Australians to save, invest and build wealth.

For those reasons, I oppose Schedules 1 and 2 of these Bills.

Because Australia does not become stronger when government claims a larger share of what Australians create.

Australia becomes stronger when Australians are free to create more of it.

The Albanese Government taxes aspiration. The Coalition backs aspiration.