Australia will soon see its biggest tax overhaul in a generation after Labor’s sweeping changes passed Parliament on Thursday, following 45 days of intense debate and accusations the prime minister broke election promises.
The new laws passed thanks to a deal with the Greens, but not before Anthony Albanese faced repeated accusations of lying and breaking trust with voters.
Prime Minister defends tax overhaul amid backlash
In a heated interview with Sunrise on Friday morning, the prime minister was directly asked whether he still has the trust of the Australian people.
“What’s been interesting is that in those 45 days, there’s not anyone saying that the housing market is currently working,” he responded. “If you know that there’s a problem, if everyone’s identified the problem and it’s agreed the system is broken, then you can’t just sit back and not do anything about it.”
Key changes to negative gearing
The centrepiece of the reforms is changes to negative gearing, which will only apply to new builds rather than existing properties from next year. Existing negative gearing arrangements will be grandfathered.
“I saw someone last night at the local government association big national dinner. There was someone, one of the councils there, bought their first home yesterday as a direct result of the fact that they weren’t having to compete with investors for an existing home,” Albanese said.
“So this is the right thing to do. It will give young Australians a fair crack. But also, importantly, last night’s changes give every Australian worker another tax cut, along with the tax cuts that we’d already legislated that will come in next week, as well as six months of paid parental leave coming in, making urgent care clinics a permanent part of the system. All of these changes will come in next week.”
Debate over consultation and governance
When pressed about whether making big announcements before consulting the public was good governance, Albanese rejected the characterisation. “In the lead up to the budget, there was substantial debate already,” he said. “We’d spoken about intergenerational equity and the need to give young people a fair crack.”
However, Sunrise host Natalie Barr pointed out that for 45 days, people have been angry and confused, running to their accountants for clarity. “What’s out of touch is saying the housing system is broken, but the government shouldn’t do anything about it,” Albanese countered. “We should just leave everything there.”
Political cost and defense of Treasurer
Albanese acknowledged there has been a political cost, but insisted: “My job is to do the right thing for the nation.” He also faced questions about various concerns raised about the budget, including claims about death taxes, small business exemptions, and superannuation changes negotiated with the Greens. “Some of the things that you’ve raised there are just not true. We’re making no changes to people’s inheritance arrangements. None,” he said.
Albanese defended Treasurer Jim Chalmers, saying he is “doing a great job” despite the controversy.
Implementation timeline and impact
The tax changes will come into effect next week, along with additional tax cuts, six months of paid parental leave, and permanent urgent care clinics. The negative gearing and capital gains changes will commence in a year. “Young people won’t be competing if it’s an existing property, they won’t be competing with investors who want negative gearing,” Albanese said, arguing the changes are already having an impact on the market.
