Focus on Productivity and Fiscal Prudence
The Treasury Laws Amendment (Tax Reform No.1) Bill 2026 was introduced on 29th May, marking one of the most substantial changes to Australia’s tax system in recent decades. Chartered Accountants Australia and New Zealand (CA ANZ) have urged the government to focus on clear implementation.
Damian Ogden, CA ANZ Group Executive Advocacy, Public and Government Affairs, emphasised the importance of recognising the scale of these changes. He stated, “It is difficult to deliver genuine structural change to the tax system. This bill goes beyond tinkering at the edges, and we encourage the Government to continue pursuing large-scale changes that strengthen the system in the long-term.” Ogden also highlighted the need for the government to focus on long-term strengthening of the tax system, alongside productivity and fiscal prudence.
Capital Gains Tax Overhaul
Significant changes to Capital Gains Tax (CGT) are included in the bill, representing one of the most substantial updates in decades. Susan Franks, CA ANZ Australian Leader – Tax, Superannuation and Financial Services, explained, “Bringing long-held assets into the tax net, shifting from the discount to indexation, and introducing a minimum tax rate are substantial structural changes that will reshape how Australians think about investment and long-term planning.”
Franks cautioned that the complexity of these changes, particularly for small business owners, necessitates effective consultation to ensure the system remains fair. She noted that “the scale of change introduces significant complexity, particularly around transitional arrangements, the valuation of assets and the interaction between old and new rules.”
Impact on Small Businesses and Start-Ups
Susan Franks expressed concern that the bill does not include targeted CGT carve-outs for small businesses and start-ups, which she believes should be considered in future iterations. According to Franks, “These sectors take on added risk and drive innovation, and the tax system should recognise their unique contribution.”
Franks suggested that the government revisit ideas such as income averaging and a 50% discount on goodwill. She remarked, “For many start-ups and growing businesses, value is built over time with very limited cost bases.”
Changes to Negative Gearing
The legislation modifies negative gearing by restricting it to new residential properties, affecting many investors. Franks highlighted the importance of public understanding of these changes as they alter investment decisions and cash-flow dynamics. She clarified, “Losses are not lost. For investors who hold both negatively and positively geared properties, a loss on one can still offset income from another.”
Franks also noted that losses remain available to offset future capital gains on the sale of negatively geared residential properties.
Personal Income Tax Reforms
The bill introduces a $1,000 standard deduction for work-related expenses and the Working Australians Tax Offset, aiming to simplify the tax system and provide relief. Franks acknowledged these as positive steps but noted the need for further work on the personal income tax system.
Franks remarked that Australia’s top marginal rate applies at a lower income threshold compared to other OECD countries, highlighting an area for potential improvement. CA ANZ plans to engage with the legislative process in the coming weeks to ensure that members and their clients are well-informed.
Last updated: 29 June 2026, 11:58 am
