Coalition wants to split tax plan as debate turns personal

The Coalition will seek to split Labor’s tax plan in two as it ramps up its opposition to the changes to capital gains and negative gearing.

Prime Minister Anthony Albanese painted his plan, which the Government claims is all about housing, as part of a broader bid to stave off the rising populism that is reflected in the increased support for One Nation.

“At a time when so many people don’t think the system is working for them, we are working to change the system to give people a better chance,” he told Labor colleagues in their caucus meeting on Tuesday morning, labelling the tax changes “pro-aspiration and pro-supply”.

It wants to replace the 50 per cent discount on taxable capital gains with an inflation-based one and a minimum 30 per cent tax rate, and limit negative gearing to new homes only.

It will use the money raised to pay for a $1000 standard deduction and a $250 annual working Australian tax offset for 13 million wage earners.

The Coalition’s party room vowed to oppose the capital gains tax and negative gearing elements of the Bill — and the whole thing if it can’t split them out.

“If there’s an ability to separate those, we’d obviously want to, but whether we can is another question,” a Liberal source said, noting the reality of Labor holding 94 seats in the Lower House.

Leader Angus Taylor has also tacked on a second reading amendment — a rhetorical motion that doesn’t actually alter the Bill — calling for the Government to dump its plans in favour of his policy to index tax brackets.

“The Government thinks it can get away with portraying its toxic tax grab as addressing intergenerational equity. But Australians aren’t falling for Labor’s ruse,” he told Parliament.

Politicians will have a couple of late nights in Canberra debating the legislation which the Government wants to push through the Lower House by Thursday morning.

An already truncated Senate inquiry has had its reporting date moved three days earlier, to June 19, to allow the bills to be put to the Senate before politicians leave Canberra for the winter break.

Debate over the changes turned personal on Tuesday between Treasurer Jim Chalmers and his shadow Tim Wilson on their competing plans for income tax cuts.

“If anybody’s looking for evidence that the Member for Goldstein is not the sharpest tool in the shed, how about him asking about tax cuts on a day that their party room decided to vote against tax cuts for 13 million Australian workers?” Dr Chalmers hit out with during question time.

Labor’s four-year-old rhetorical flourish of seeking to allow Australians to “earn more and keep more of what they earn” also made a return in the scripts of multiple ministers after having been rested for several months.

Mr Wilson hit back, saying the Government’s “credibility has been shredded, destroyed” and that the “train wreck Treasurer … simply fails to understand the scale of what he is doing”.

Mr Taylor used his speech to call the Prime Minister arrogant and someone who “didn’t have the guts” to put the plan to voters.

“He ruled out changes and now this Prime Minister is imposing these toxic taxes on Australians against their will. I tell you what, it’s arrogant … and Australians use colourful terms, adjectives next to arrogant,” he said.

The final settings for the CGT measures, including how the system will deal with low-capital, high-growth operations like start-ups, will be sorted out in a combination of regulations and further legislation after the winter break.

Parliament will be able to overturn the regulations.

Cabinet minister Clare O’Neil said over the weekend that the Government was working to settle the final exemptions or carve-outs “speedily”, after Mr Albanese earlier indicated it would be dealt with at some point later in the year.

Dr Chalmers was also leaning on the accelerator on Tuesday, promising to finalise the consultation “as soon as we can” while making sure that people’s voices were held.

But he said the timing of those subsequent bills depended on the consultation that’s happening now with groups including small business advocates COSBOA, the Australian chamber of Commerce and Industry, the Tech Council, the National Farmers Federation, and Ai Group.