The Senate Economics Legislation Committee inquiry into the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026[1]Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 — Senate Economics Legislation Committee“Committee reporting deadline June 19, 2026; Treasury Secretary Wilkinson conceded CGT changes don't simply return to 1999; CPA Australia compliance costs $295-542M/year vs Treasury's $88.4M; Senator Pocock called bundling approach 'actively avoiding scrutiny'” was meant to be Labor's proof that 10 days of formal review was sufficient accountability for what PwC described as "the most far-reaching overhaul of Australia's CGT regime since CGT discounts were introduced in 1999"[10]2026-27 Federal Budget — CGT and housing tax reform“'The most far-reaching overhaul of Australia's CGT regime since CGT discounts were introduced in 1999'; 'new residential dwelling' is 'yet to be determined as it will be set by the Minister via legislative instrument'; obtaining market values for illiquid assets 'may be costly'; guidance tools 'have not yet been released or detailed'”. The hearing record says otherwise.
Three facts, taken together, expose the inquiry as inadequate. Treasury's own deputy secretary admitted under questioning she cannot give the Senate separate revenue estimates for the CGT and negative gearing changes — and does not have them. The National Farmers' Federation[4]Farmers must not be overlooked in tax bill inquiry“NFF president McIntyre said 'The missing voice is the sector producing the food and fibre every Australian relies on'; NFF's 80,000 farm businesses were not invited to appear at June 15-16 hearings”, representing 80,000 Australian farm businesses, was not invited to appear despite making a formal written submission. And the mathematical apportionment formula millions of Australians will need when splitting their capital gains at July 1, 2027 — old regime versus new — remains unpublished as of June 20.
On June 19, the day the committee report was due, Treasurer Jim Chalmers conceded on ABC radio that the 2026 budget had knocked some "political paint" from the Labor ship[3]Chalmers concedes Labor took hit over CGT changes as Butler rejects leadership speculation“Chalmers conceded budget knocked 'political paint' from Labor on June 19; Taylor called for the bill to be axed; Wilson said 'I suspect this is the treasurer's last budget'”. That is not the language of a minister confident that scrutiny has served Australia well.
By the numbers: The accountability gap
- $3.6 billion — combined four-year revenue estimate (CGT + negative gearing); disaggregated breakdown unavailable to Treasury
- $8.1 billion — total four-year raise including discretionary trust changes
- $88.4M/year — Treasury's annual compliance cost estimate; CPA Australia puts it at $295M–$542M/year
- 80,000 — farm businesses whose peak body was excluded from Senate committee hearings
- Nine — original ministerial instruments in the bill replacing primary legislation
- Zero — apportionment formula instruments published as of June 20, 2026
Why can't Treasury tell Parliament what its own tax reforms cost?
On the afternoon of June 16, in the closing hours of the two-day Senate committee hearing in Sydney, Liberal Senator Claire Chandler asked Treasury deputy secretary Diane Brown to provide separate revenue estimates for the CGT changes versus the negative gearing changes.
Budget papers show both reforms together generate $3.6 billion by 2029-30[2]Tensions flare over CGT costings in fast-tracked Senate hearing“Treasury deputy secretary Brown said 'we do not have in our possession a disaggregated, broken-down number' for CGT vs. negative gearing revenue; combined budget figure is $3.6 billion by 2029-30”. Bundling two structurally distinct policy interventions into a single revenue line makes it impossible for the Senate to assess the cost-benefit or revenue risk of either measure in isolation. Chandler wanted the breakdown.
Brown initially offered to take the question on notice. When Chandler pressed, Brown confirmed the limitation: "we do not have in our possession a disaggregated, broken-down number"[2]Tensions flare over CGT costings in fast-tracked Senate hearing“Treasury deputy secretary Brown said 'we do not have in our possession a disaggregated, broken-down number' for CGT vs. negative gearing revenue; combined budget figure is $3.6 billion by 2029-30”.
"So why can't you tell us what the numbers are?" Chandler asked.
"I just don't have the numbers in front of me, Senator," Brown replied[2]Tensions flare over CGT costings in fast-tracked Senate hearing“Treasury deputy secretary Brown said 'we do not have in our possession a disaggregated, broken-down number' for CGT vs. negative gearing revenue; combined budget figure is $3.6 billion by 2029-30”. "I apologise."
This exchange ought to stop the legislative program in its tracks. The government is asking the Senate to pass — before July 2 — a bill that permanently restructures the taxation of every capital asset held by every Australian individual and trust from July 1, 2027. The Senate is asked to assume that the $8.1 billion combined four-year raise from CGT, negative gearing, and trust changes[7]Tax reform for workers, businesses and future generations“June 18 package: $300M small business threshold expansion to $10M turnover covering 2.7M businesses; startup consultation; testamentary trust exemption; 'new residential dwelling' definition deferred to later tranche” is distributed in ways that justify the disruption to millions of Australians. Treasury's own officials cannot confirm, on the record, how much flows from abolishing the CGT discount versus restricting negative gearing.
The accountability failures compound. Treasury Secretary Jenny Wilkinson conceded at Senate estimates on June 4 that the CGT changes do not simply "go back to 1999"[1]Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 — Senate Economics Legislation Committee“Committee reporting deadline June 19, 2026; Treasury Secretary Wilkinson conceded CGT changes don't simply return to 1999; CPA Australia compliance costs $295-542M/year vs Treasury's $88.4M; Senator Pocock called bundling approach 'actively avoiding scrutiny'” as Prime Minister Albanese had claimed — the pre-1999 system allowed income averaging over five years and imposed no 30 percent minimum tax. And National Housing Supply and Affordability Council chair Susan Lloyd-Hurwitz told the Day 1 committee hearing the reforms could result in approximately 35,000 fewer new homes being built[12]Senate inquiry into controversial CGT, negative gearing reforms kicks off in Canberra“COSBOA chair Addison warned measures 'risk doing the opposite' of encouraging investment; Lloyd-Hurwitz acknowledged 35,000 fewer homes projection at Day 1 hearing; SMSF loophole flagged” — a figure she herself placed before the Senate. Which provision drives how much of that shortfall? Treasury cannot say.
The Tax Institute of Australia submitted that the bill should not be passed in its current form[8]Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 — Tax Institute submission“The Tax Institute recommended the bill should not be passed in its current form, citing lack of consultation, compressed timeframe, and significant technical gaps”, citing the absence of prior public consultation, a compressed timeframe, and significant technical gaps including undefined key concepts delegated to ministerial instruments. Whether the committee's majority report acknowledges that recommendation remains to be seen.
Who was in the room — and who wasn't?
The government defended the two-day inquiry by pointing to the prior Senate Select Committee on the Operation of the Capital Gains Tax Discount, which reported in March 2026. That committee examined principles. It did not examine the specific bill introduced on May 28 — with its four new categories of capital gains, nine ministerial instruments, and undefined 'new residential dwelling' term[10]2026-27 Federal Budget — CGT and housing tax reform“'The most far-reaching overhaul of Australia's CGT regime since CGT discounts were introduced in 1999'; 'new residential dwelling' is 'yet to be determined as it will be set by the Minister via legislative instrument'; obtaining market values for illiquid assets 'may be costly'; guidance tools 'have not yet been released or detailed'”. Two days of hearings on that specific legislative text is what the 48th Parliament's Senate received.
In those two days, the committee heard from economic think tanks, housing equity advocates, accounting and legal professional bodies, tech startup groups, mining exploration representatives, and the Australian Taxation Office. COSBOA chair Matthew Addison told the Day 1 Canberra hearing: "Tax reform should encourage ambition, investment, and growth" — warning the measures "risk doing the opposite"[12]Senate inquiry into controversial CGT, negative gearing reforms kicks off in Canberra“COSBOA chair Addison warned measures 'risk doing the opposite' of encouraging investment; Lloyd-Hurwitz acknowledged 35,000 fewer homes projection at Day 1 hearing; SMSF loophole flagged”. What was absent across both days: any representative of Australian agriculture.
The National Farmers' Federation — representing 80,000 Australian farm businesses — was not invited to appear[4]Farmers must not be overlooked in tax bill inquiry“NFF president McIntyre said 'The missing voice is the sector producing the food and fibre every Australian relies on'; NFF's 80,000 farm businesses were not invited to appear at June 15-16 hearings”. Nor was any other agricultural organization. Farms are among Australia's most significant CGT asset holders: capital-intensive, long-held, frequently transacted through intergenerational succession, and extraordinarily difficult to value for a deemed disposal. The NFF submitted written evidence calling for CGT settings that would not undermine farm "viability, productivity and investment capacity... at key transition points such as intergenerational succession."
The missing voice is the sector producing the food and fibre every Australian relies on.
Hamish McIntyre, NFF president, June 16, 2026
NFF president Hamish McIntyre said on June 16: "The missing voice is the sector producing the food and fibre every Australian relies on."[4]Farmers must not be overlooked in tax bill inquiry“NFF president McIntyre said 'The missing voice is the sector producing the food and fibre every Australian relies on'; NFF's 80,000 farm businesses were not invited to appear at June 15-16 hearings”
An NFF spokesperson confirmed that decisions about who appears at committee hearings are at the committee's discretion — and noted this is a government-led committee chaired by Victorian Labor Senator Lisa Darmanin[5]Farmers laud increase in turnover threshold for CGT concession“Committee is government-led and chaired by Senator Lisa Darmanin; Victorian Farmers Federation said threshold expansion was 'a step in the right direction'; NFF confirmed it was not invited to appear”. That government-chaired committee chose, across two days of hearings, not to hear directly from the people who grow Australia's food and whose assets — farmland, family businesses, intergenerational properties — sit squarely in the path of the July 2027 deemed disposal.
The irony became acute the following day. On June 18, Prime Minister Albanese announced the expansion of the small business CGT threshold to $10[7]Tax reform for workers, businesses and future generations“June 18 package: $300M small business threshold expansion to $10M turnover covering 2.7M businesses; startup consultation; testamentary trust exemption; 'new residential dwelling' definition deferred to later tranche” million turnover — one of the NFF's core asks. The concession emerged through bilateral engagement with the Treasurer's office, not from public testimony at the committee hearing. The Victorian Farmers Federation said the threshold expansion was "a step in the right direction"[5]Farmers laud increase in turnover threshold for CGT concession“Committee is government-led and chaired by Senator Lisa Darmanin; Victorian Farmers Federation said threshold expansion was 'a step in the right direction'; NFF confirmed it was not invited to appear” — and simultaneously evidence that the inquiry failed its basic function: the reform agricultural communities needed was identified not because the committee questioned farming witnesses, but because they lobbied outside the inquiry process.
This is how parliamentary scrutiny degrades under calendar pressure. Direct government lobbying substitutes for transparent on-the-record testimony. The concession is announced as a win. The record of who said what, when, and on what evidence disappears.
The $475 million band-aid on a broken process
The June 18 concession package has been presented by the government as evidence it is willing to listen. It is more accurately characterized as evidence the original bill was insufficiently developed before introduction.
The package expands the small business active asset CGT reduction threshold from $2 million to $10 million turnover, covering 2.7 million businesses at an estimated cost of about $300 million[7]Tax reform for workers, businesses and future generations“June 18 package: $300M small business threshold expansion to $10M turnover covering 2.7M businesses; startup consultation; testamentary trust exemption; 'new residential dwelling' definition deferred to later tranche”; releases a startup consultation paper closing July 10 with final legislation deferred (approximately $125 million); exempts discretionary testamentary trusts from the 30 percent minimum tax (approximately $50 million); and commits to remove some ministerial discretion provisions from the current bill.
Australian Industry Group CEO Innes Willox said on June 18 the concessions "lessen, but don't eliminate, the harm which will be done to investment"[11]CGT Changes Ease but Don't Erase Investment Harm“AiGroup CEO Willox said concessions 'lessen, but don't eliminate, the harm'; CGT reforms will 'raise our taxes on capital gains to some of the highest levels in the OECD'; only one of five AiGroup recommendations was adopted”. Willox noted the government adopted only one of AiGroup's five recommendations and declared the CGT package would "raise our taxes on capital gains to some of the highest levels in the OECD"[11]CGT Changes Ease but Don't Erase Investment Harm“AiGroup CEO Willox said concessions 'lessen, but don't eliminate, the harm'; CGT reforms will 'raise our taxes on capital gains to some of the highest levels in the OECD'; only one of five AiGroup recommendations was adopted”, adding that "exempting some small businesses from a harmful tax reform does not transform it into a beneficial one"[11]CGT Changes Ease but Don't Erase Investment Harm“AiGroup CEO Willox said concessions 'lessen, but don't eliminate, the harm'; CGT reforms will 'raise our taxes on capital gains to some of the highest levels in the OECD'; only one of five AiGroup recommendations was adopted”.
On compliance costs, the June 18 package changes nothing material. CPA Australia's bottom-up analysis puts annual compliance costs at $295 million to $542 million per year — three to six times Treasury's own $88.4 million estimate — plus one-off transitional costs of $675 million to $825 million[1]Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 — Senate Economics Legislation Committee“Committee reporting deadline June 19, 2026; Treasury Secretary Wilkinson conceded CGT changes don't simply return to 1999; CPA Australia compliance costs $295-542M/year vs Treasury's $88.4M; Senator Pocock called bundling approach 'actively avoiding scrutiny'”. These costs are structural to the bill's four-category deemed disposal mechanism. Raising the small business threshold does not reduce compliance complexity for the millions of individual and trust taxpayers above it.
| Metric | Treasury position | Independent assessment |
|---|---|---|
| Annual compliance costs | $88.4M/year | $295M–$542M/year (CPA Australia) |
| One-off transition costs | Not published | $675M–$825M (CPA Australia) |
| 'New residential dwelling' definition | Later tranche; not yet drafted | Not yet drafted |
| Apportionment formula | Ministerial instrument; not yet published | Not yet published |
| Startup legislation | Consultation closes July 10; deferred | Not yet legislated |
The commitment to embed the WATO calculation in primary legislation responds to Greens Senator David Shoebridge's "Henry VIII powers" critique. But the definition of 'new residential dwelling' will be moved to primary legislation in a later tranche, not the current bill[7]Tax reform for workers, businesses and future generations“June 18 package: $300M small business threshold expansion to $10M turnover covering 2.7M businesses; startup consultation; testamentary trust exemption; 'new residential dwelling' definition deferred to later tranche”. PwC confirmed the concept of 'new residential dwelling' "is yet to be determined as it will be set by the Minister via legislative instrument"[10]2026-27 Federal Budget — CGT and housing tax reform“'The most far-reaching overhaul of Australia's CGT regime since CGT discounts were introduced in 1999'; 'new residential dwelling' is 'yet to be determined as it will be set by the Minister via legislative instrument'; obtaining market values for illiquid assets 'may be costly'; guidance tools 'have not yet been released or detailed'” — and that knock-down-rebuild projects on existing sites face particular uncertainty about whether they meet the proposed "genuine addition to supply" test. Senators voting before July 2 cannot read the definition that will determine whether their constituents' property investments attract CGT relief. It does not exist.
Independent Senator David Pocock — who supports the reform's housing policy goals — called the bundling approach "actively avoiding scrutiny"[1]Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 — Senate Economics Legislation Committee“Committee reporting deadline June 19, 2026; Treasury Secretary Wilkinson conceded CGT changes don't simply return to 1999; CPA Australia compliance costs $295-542M/year vs Treasury's $88.4M; Senator Pocock called bundling approach 'actively avoiding scrutiny'” and proposed splitting the bill so popular tax cuts pass separately from the contested structural elements. That proposal was declined.
The missing formula: a vote on blind faith
The apportionment formula for the July 1, 2027 deemed disposal remains unpublished[6]Capital gains tax and negative gearing amendments: key changes and implications“The apportionment method and critical aspects of the bill 'will be left to legislative instruments not yet released at the time Parliament votes'”. This is the mechanism by which every Australian will calculate, when they eventually sell an asset held before July 2027, how much of the gain is taxed under the old regime (50 percent CGT discount) and how much under the new regime (CPI indexation plus 30 percent minimum tax). For illiquid assets — unlisted businesses, farmland, private shareholdings — the apportionment method determines whether the tax liability can be estimated without an expensive professional valuation.
PwC warned that "obtaining a reliable market value" at July 1, 2027 "may be costly" for holders of private companies, trusts, real property, and other illiquid assets[10]2026-27 Federal Budget — CGT and housing tax reform“'The most far-reaching overhaul of Australia's CGT regime since CGT discounts were introduced in 1999'; 'new residential dwelling' is 'yet to be determined as it will be set by the Minister via legislative instrument'; obtaining market values for illiquid assets 'may be costly'; guidance tools 'have not yet been released or detailed'” — and that the government's promised guidance tools "have not yet been released or detailed."
Corrs Chambers Westgarth identified that the apportionment method and other critical aspects of the bill "will be left to legislative instruments not yet released at the time Parliament votes"[6]Capital gains tax and negative gearing amendments: key changes and implications“The apportionment method and critical aspects of the bill 'will be left to legislative instruments not yet released at the time Parliament votes'”.
The government's June 18 commitment to embed the WATO calculation in primary legislation is a partial step. But the precise mathematical formula still needs to be written. CPA Australia formally demanded the instrument be released for consultation by October 1, 2026 — three months after the government wants the Senate to vote. The Senate is being asked to authorize the framework for a tax whose central transition mechanism cannot be examined, because it has not been written.
Chalmers concedes the political damage
On June 19, Treasurer Chalmers told ABC radio the budget had knocked "political paint" from Labor. He framed this as the price of doing the right thing for first home buyers and workers, saying that if Labor is given the choice between the easier path politically or the more difficult thing, "it will be worth it."
The framing is designed for the Greens, whose support Labor needs. But what Chalmers was conceding is that the government's process caused political damage precisely because it bypassed the consultation that would have allowed the bill to be better designed before introduction. Tax changes affecting millions of Australians' retirement assets, investment decisions, farm succession arrangements, and startup equity stakes were designed without public consultation, introduced on May 28, forced through the House of Representatives in 16 hours across 21 divisions[9]Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 — Parliament of Australia“Bill listed as first Government Business for Senate June 22, 2026; passed House June 4 after 16 hours and 21 divisions without amendment”, subjected to a two-day inquiry that excluded farmers, and are now being pressed to a Senate vote with the formula millions will use still unwritten.
Opposition treasury spokesperson Angus Taylor called on June 19 for the bill to be axed, saying: "We need an axe to this. This is a failed policy. This is a failed budget."[3]Chalmers concedes Labor took hit over CGT changes as Butler rejects leadership speculation“Chalmers conceded budget knocked 'political paint' from Labor on June 19; Taylor called for the bill to be axed; Wilson said 'I suspect this is the treasurer's last budget'”
Opposition treasury spokesperson Tim Wilson told Channel Seven's Sunrise: "I suspect this is the treasurer's last budget"[3]Chalmers concedes Labor took hit over CGT changes as Butler rejects leadership speculation“Chalmers conceded budget knocked 'political paint' from Labor on June 19; Taylor called for the bill to be axed; Wilson said 'I suspect this is the treasurer's last budget'” — provoking Health Minister Mark Butler, on the same program, to dismiss leadership speculation as "rubbish."
The Coalition's substantive objections are that restricting negative gearing and abolishing the CGT discount will suppress housing investment, push up rents, and penalize ordinary Australians who have built retirement savings around current tax settings. AiGroup's Willox warned the CGT package creates "perverse incentives that punish investment and innovation"[11]CGT Changes Ease but Don't Erase Investment Harm“AiGroup CEO Willox said concessions 'lessen, but don't eliminate, the harm'; CGT reforms will 'raise our taxes on capital gains to some of the highest levels in the OECD'; only one of five AiGroup recommendations was adopted”.
Even for those who accept that reforming CGT and negative gearing serves valid policy goals — and reasonable people can — the way this bill was designed, introduced, scrutinized, and is being rushed to a vote falls well below the standard Parliament should insist upon for legislation of this scope. The Tax Institute[8]Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 — Tax Institute submission“The Tax Institute recommended the bill should not be passed in its current form, citing lack of consultation, compressed timeframe, and significant technical gaps” said the bill should not pass in its current form. CPA Australia agreed. Senator Pocock agreed. The 80,000 farm businesses whose peak body was excluded from hearings have every reason to agree as well.
What happens from June 22?
When the Senate reconvenes on June 22, the committee report will be tabled at the morning documents session. Under the winter sitting legislative program for June 22-25[9]Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 — Parliament of Australia“Bill listed as first Government Business for Senate June 22, 2026; passed House June 4 after 16 hours and 21 divisions without amendment”, the Tax Reform No. 1 Bill is listed as the first item of government business, subject to that tabling. Floor debate follows.
Tax Reform No. 1 Bill 2026: the rushed road
- May 12, 2026 — Budget night: CGT, negative gearing, and trust reforms announced without prior consultation
- May 28, 2026 — Bill introduced by Treasurer Chalmers in the House of Representatives
- June 4, 2026 — Bill passes the House after 16 hours and 21 divisions, without amendment
- June 15–16, 2026 — Two-day Senate committee hearings; NFF and agriculture excluded
- June 16, 2026 — Treasury admits it cannot provide disaggregated CGT/negative gearing costings
- June 18, 2026 — $475M concession package announced; apportionment formula still absent
- June 19, 2026 — Committee report due; Chalmers concedes political damage; Taylor calls for full repeal
- June 22, 2026 — Senate reconvenes; committee report tabled; floor debate begins
- July 2, 2026 — Government's target for Senate passage before winter recess
Labor holds 30 of 76 Senate seats. With the Coalition's 27 senators opposed, Labor needs all 10 Greens — or a crossbench combination reaching 39 votes — to pass the bill. The Greens' core demands remain at least partially unresolved: Labor has committed to address ministerial discretion but has not conceded retrospectivity — scrapping grandfathering on existing assets. No formal Labor-Greens deal has been announced as of June 20, 2026.
This is a Senate approaching a critical vote on the most consequential tax legislation in decades with the following on the parliamentary record: Treasury cannot disaggregate what each component raises. The July 2027 apportionment formula has not been written. Australia's 80,000 farm businesses were not heard at the inquiry. Startup legislation is deferred to a future parliament. And the definition of 'new residential dwelling' — which PwC confirms "is yet to be determined" and will be set by ministerial instrument[10]2026-27 Federal Budget — CGT and housing tax reform“'The most far-reaching overhaul of Australia's CGT regime since CGT discounts were introduced in 1999'; 'new residential dwelling' is 'yet to be determined as it will be set by the Minister via legislative instrument'; obtaining market values for illiquid assets 'may be costly'; guidance tools 'have not yet been released or detailed'” — is still being drafted.
Parliament's role is not to rubber-stamp legislation on a government's preferred calendar. It is to require the executive to demonstrate, before it votes, that what it proposes is properly understood, properly costed, and tested against the full range of those who will live under it. On the Tax Reform No. 1 Bill 2026, as of June 20, 2026, that requirement has not been met. Treasurer Chalmers called the cost "political paint." The accountability cost is something harder to repaint over.