The Albanese government’s decision to ram through a massive tax overhaul that imposes a so‑called “widow tax”, higher taxes on some Australian small businesses, and damaging new taxes affecting investment, housing, charities, and the broader Australian economy.
Last week—Deputy President, in this place—the Greens and the Labor Party did a deal under which the Labor government pushed through material tax changes that will have a huge impact on the Australian economy, and are already having a huge impact on the Australian economy. We saw it just last weekend, when across the country auction clearance rates for people attempting to sell their houses fell through the floor—fell through the floor. They’ve dropped to levels not seen since during COVID.
That’s how bad it is. That reflects the lack of confidence in the Australian property market at the moment. We are seeing this as a direct result of the Labor Party’s introduction of these massive tax changes.
Auction clearance rates—the rate at which houses are sold at auction across the country—are now lower than at any other time except during the height of COVID, when, especially in Victoria, people were locked down. That is the undermining of confidence in the Australian property market caused by this Labor budget, and it is an absolute disgrace.
I also want to talk about the so‑called “widow tax”, and explain to people what this means.
There were provisions in the budget that provided for grandfathering in respect of investment properties owned as at the date of the budget. Those properties would continue to receive the benefit of the existing regime. That makes sense on the basis that someone has purchased a property under existing taxation arrangements, and that property should continue to be treated the same way while it is held by the owners.
However, we have found out in the Senate that there is a problem with how the government has drafted this proposal. There is a flaw in the legislation passed just last week by the Greens and the Labor Party. Specifically, if an investment property is held by a husband and wife—two spouses—and one of the spouses dies, that triggers a change in ownership. That change then triggers tax consequences for the surviving spouse.
That is unacceptable—absolutely unacceptable.
All those mum‑and‑dad investors out there who own investment properties in their joint names are potentially going to be impacted by this glitch.
The second issue is where two spouses buy a property in both their names and then subsequently divorce. Again, this could trigger potentially disastrous taxation consequences for that couple.
What is so surprising is that the Labor government did not think about these issues before putting forward these tax changes. These are obvious issues that should have been considered before they broke their promise—taken to the last election—not to make any changes to negative gearing or capital gains tax.
Then we saw the Treasurer on Insiders on Sunday. When he was asked directly how the government would fix this—what they were going to do—he said they would fix it. But when pressed on how, he couldn’t say. He didn’t know how they were going to fix it.
We have no detail and no clarity whatsoever.
As a result, there will be Australians today who own property in joint names and who are at risk because this issue may not be properly rectified. This is just one example—one example—of the unintended consequences flowing from the Labor Party’s budget.
We saw this in reality over the weekend with that massive fall in auction clearance rates, reflecting a clear undermining of confidence in the Australian property sector. And it is the same across the board—in the mining sector, the biotech sector. Young shareholders and older shareholders alike have lost confidence to invest in this country because of Labor’s agenda.
