Labor's first tranche of major tax reforms have passed the lower house despite opposition from One Nation and the Coalition. The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 was read a third time shortly before 12:30pm on Thursday, passing 94 to 49 with support from the Labor majority.
The Bill includes changes to capital gains tax, negative gearing, tax offset, and instant tax deduction. It will now go to the Senate, where the government does not have a clear majority. A second tranche of bills is yet to come before parliament.
Independent MPs Helen Haines and Andrew Wilkie supported the bill, while other crossbenchers such as Zali Steggall and Sophie Scamps did not. The Greens' sole MP, Elizabeth Watson-Brown, backed the measure. One Nation's newly minted second lower house MP David Farley, who abstained from voting on the second reading, voted against the third reading of the Bill.
Several amendments, including a Coalition proposal that would have inserted its tax bracket creep reforms into the package, were shot down by Labor.
Barbs Over Tax During Question Time
Following the vote, both Labor and the Coalition traded blame over whether the current or former governing parties had failed to back tax relief. Opposition Leader Angus Taylor asked, "Prime Minister, why did your government vote against lower income tax cuts 11 times, including the Coalition's plan for bigger and better income tax cuts year after year after year?"
In response, Anthony Albanese said the Coalition "voted against the legislated five rounds of income tax cuts" Labor put forward in Thursday's reforms. "No wonder they have brought Tony Abbott back to run the Liberal Party," he said. "A bloke who was dumped by his party, and dumped by his electorate, and they made him party president ... at least when they resurrected the dinosaurs in Jurassic Park they chose a species that was successful."
Shadow Treasurer Tim Wilson accused Labor of "locking in higher taxes for Australian workers year after year" and asked if the Prime Minister would admit his government voted to steal billions of dollars in extra taxes from hardworking Australians.
Treasurer Jim Chalmers described the reforms as "the most significant in over a quarter of a century" and said they would help tens of thousands of Australians into homes who would have been otherwise locked out. He said Thursday was a test for the Coalition "and they failed it."
Potential Senate Deal
Opposition Leader Angus Taylor opened the door to a potential agreement with the Greens in the Senate to delay the reforms after reports he sought a formal deal to send both the tax legislation and NDIS reforms to a longer inquiry. "We'll work with anyone to stop toxic taxes, and that's what Labor's proposing," he said. "The question is whether there's going to be a dirty deal done here between Labor and the Greens."
However, Mr Taylor claimed the Greens wanted to "get rid of all the grandfathering on this" and wanted a much bigger tax hit on Australians. "The Greens have an opportunity here to stop this legislation, and we'll work with whoever we can to stop this toxic legislation getting through the parliament."
Senator David Pocock said he would welcome a team-up between the Coalition and the Greens. He told Sky News the Bill was "something that absolutely needs scrutiny" and that he had serious concerns over the discretionary powers it would give Treasurer Jim Chalmers.
"I think both the NDIS changes and changes to CGT should have a lengthy Senate inquiry process," he said. "I've been really concerned about the number of bills the government has been introducing to parliament that gives a minister extraordinary powers ... we have to maintain parliamentary oversight, and I'll be pushing the Greens and the Coalition to ensure we do that. I do think we shouldn't be handing those powers to the Treasurer. Any of those changes should come through parliament."
More to come.
