Jim Chalmers has now introduced the legislation for the Budget’s suite of tax changes to Parliament, describing it as the “first step” in an ambitious tax reform package.

Under the Treasurer’s plans, the 50 per cent discount on capital gains tax will be replaced with an inflation-based discount, with a 30 per cent minimum payable on the taxable portion.

Negative gearing of investment properties will be limited to newly built homes only.

The Government is also setting up a new $250 annual working Australians tax offset (WATO) and a $1000 standard deduction.

Dr Chalmers has previously said the WATO sets up a new architecture that governments can use for tax cuts targeted at people earning wages down the track – hinting at but not yet promising further relief from income taxes close to the next election.

The capital gains tax changes have proven the most controversial because they cover all asset classes, not just housing as was anticipated before the Budget.

Business groups have warned it will stifle investment and are urging the Government to significantly narrow the changes so they’re limited to housing only.

Small business advocates COSBOA and the National Farmers Federal have also asked for the thresholds for existing CGT concessions to be lifted from $2 million turnover to $10 million, in line with the tax office definition of small business.

The Government appears open to this change and ensuring there is some special arrangement for low-capital, high-growth businesses like start-ups, but has all but ruled out the broader restriction.

Any carveouts will be dealt with in subsequent legislation later in the year.

“This is a bill for workers, for first home buyers, and for future generations,” Dr Chalmers told Parliament.

Deputy Liberal leader Jane Hume confirmed on Thursday morning a Coalition government would repeal the tax changes.

“We will vote against these terrible tax changes, these toxic taxes, and when in government, we will make sure that we deliver higher and better income taxes with a tax back guarantee for all Australians,” she told Sky News, accusing the government of “ramming through these changes” without proper scrutiny.

“We would make sure that housing supply is the focus for us … by making sure that we invest in the enabling infrastructure that allows new developments to build, we’ll make sure that our migration program is tied to new housing completions, so that we can afford to bring people in and house them appropriately here, as well as allow Australians to get a better chance to get their foothold in the housing market.”

The Treasurer and colleagues are keen to steer debate back onto the housing affordability aspect, which has landed far better with the public once they get past the small business complaints.

Dr Chalmers says housing supply is still the government’s primary focus, but it had become clear that wasn’t the whole solution.

“Following the policy mistakes made a quarter of a century ago, home ownership has been pushed further and further out of reach, and especially for young Australians,” he said.

“We hear a lot about helping people get on the property ladder, but there’s no point having a ladder if the first few rungs are missing.

“For too long, governments have turned a blind eye to a broken status quo, a status quo that is unfair for people and unfair for our economy.”

But he acknowledged the changes were contentious, switching gear into political attack mode amid heckling from the Opposition.

“We have seen dishonest scare campaigns already, and deliberate distortions of the truth,” he said.

He explained the government is not introducing a tax on inheritances or inherited assets (although the grandfathering of negative gearing won’t survive a property being passed on to heirs), that the capital gains tax will still be reduced, albeit with a different formula, and that the “vast majority” of small businesses remain eligible for further capital gains tax concessions.

“These are the facts, Mr Speaker, but it’s also a fact that this bill presents a choice, a choice between cutting income taxes for Australian workers or keeping them higher,” he thundered.

“Most of all, this legislation is about cutting taxes for workers. It’s about making it easier to buy a first home.”

The Government is trying to goad the Opposition into opposing the tax cuts, because they are combined here with the CGT and negative gearing changes that the Coalition opposes.