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Controversial changes to the capital gains tax have been introduced to parliament despite ongoing consultation for potential carve-outs after the reforms sparked significant backlash from the small business sector.
Treasurer Jim Chalmers introduced the legislation – which intertwines a number of budget measures – to the House of Representatives on Thursday morning.
It ties together the controversial changes to CGT and negative gearing, the $250 Working Australians Tax Offset (WATO) and Labor’s pre-election pledge of a $1000 standard tax deduction, all in the one Bill.
“This Bill delivers on three objectives. It cuts taxes for every Australian worker, again and again,” Mr Chalmers said.
“It makes it easier for people to buy their first home. And it better aligns the tax treatment of labour income and asset income.”
He said the government was still consulting on the changes with start-ups where “indexation is applied to a low or zero cost base”.
“Further consideration will also be given to a range of specific details such as interactions with attribution managed investment trusts, tax consolidation, residency changes, along with any other relevant issues,” he said.
Mr Chalmers confirmed any subsequent carve-outs would be finalised in additional legislation, which he described as a “standard approach”.
The Coalition, which has supported the WATO and tax deduction, has accused the government of wrapping the changes into one Bill to try to wedge the opposition into passing CGT changes it vehemently opposes.
It has since vowed to vote against the Bill.
Opposition defence spokesman James Paterson described it as an “outrageous” approach that would attempt to pass “flawed” legislation.
“The government’s got his completely backwards,” he told Sky News on Thursday.
“Even they admit their own legislation is so flawed that they will have to fix it in the future.
“But they’re saying, ‘Just trust us, rush it through now, and then we’ll negotiate with you afterwards to repair the mistakes we’ve made’.
“Well, that’s an outrageous approach to legislating.”
He cast doubt over Anthony Albanese’s commitment to consulting on carve-outs by pointing to the Prime Minister’s pre-election promise not to touch the tax settings in the first place.
“If this is rushed through the parliament, if it is slammed through, why wouldn’t he change his mind again and not go back and fix the problems that have been identified and just leave it as it is?” Senator Paterson said.
“Once this is legislated only the government can fix it. And I think that’s why they need to stop, they need to pause, they need to consult properly and fix it before they legislate, not afterwards.”
West Australian Labor Premier Roger Cook has warned the government its CGT changes should not disincentivise investment in the mining sector – from which the state derives much of its wealth – after investors flagged concerns with him.
“It’s important that as the government continues to consult and refine the tax laws, which back up their announcements in relation to the budget,” he said on Wednesday.
“That they talk to industry about … the potential impacts of those announcements, and ensure that the laws ultimately don’t produce outcomes that they didn’t intend.”
He is the second state Labor leader to express doubts on the federal budget’s tax package after NSW Premier Chris Minns criticised the Albanese government for not handing back bigger tax cuts to income earners.
“You work Monday, Tuesday and half of Wednesday for yourself and then Wednesday, Thursday and Friday for the government. That’s a tough burden for a lot of families to hit,” Mr Minns said previously.
“We do need to make sure we’re paying urgent attention when it comes to personal income taxes because at the moment, a lot of working families are getting stung.”
But Employment Minister Amanda Rishworth dismissed the criticism as “entirely a matter for those premiers”.
“What I would say is we work very closely with state and territories,” she told ABC Radio National.
Assistant Treasurer Daniel Mulino earlier said the federal government would “engage” with Mr Cook on a “good faith basis” over the issue, while confirming Treasury was locked in consultations with a number of sectors.
“The government has received representations on the range of fronts. Those are the (venture capital) issues I identified, there’s been a number of issues in relation to small business,” he told ABC News Breakfast.
“I myself have been in discussions in relation to that. But I know of course the treasurer is leading that and treasury, the department, is also engaged with those.”
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