Labor reaches deal with the Greens to pass changes to capital gains tax and negative gearing reforms | Australian politics
The Greens will back the Albanian government’s negative gearing and capital gains tax changes in a deal that will delay and adjust Labor’s planned overhaul of the national disability insurance scheme.
The minor party announced its position on Tuesday morning, paving the way for Labor to pass its contentious budget bill before the federal parliament reconvenes for the winter recess.
The Greens decided to back the tax bills after the government agreed to remove a loophole, as well as ministerial powers, that would allow investors with self-managed super funds to continue to benefit from tax breaks, allowing the government to reverse reforms in the future.
The prime minister, treasurer and finance minister drew attention to the Greens’ announcement in their joint statement.
“The Albanian government is one step closer to implementing tax reforms for workers, home buyers and businesses,” they said.
“These reforms will make it easier for Australians to buy their first home, reduce taxes for more than 13 million workers and better align the tax treatment of labor and asset income.”
The Greens said that as part of negotiations with Labor they had secured an eight-week extension of the Senate inquiry into the NDIS changes and were negotiating various changes, including limiting the scope of the minister’s powers to make across-the-board cuts across categories of participant support.
The minor party will continue to vote against the legislation, which it considers “draconian” and harmful to the more than 240,000 people expected to be removed from the disability scheme under the serious cost-savings plan.
The government last week announced several changes to its capital gains tax proposal, including rolling back the exchequer’s discretionary powers, in a bid to address one of the Greens’ biggest concerns.
According to the proposed changes, the 50% capital gains tax deduction applied on the profit from sold assets will be converted to a cost-based indexation model as of July 2027.
Negative gearing concessions will also no longer apply to investment properties purchased after 19.30 on 12 May 2026, except for new construction and some government housing programs open to investors.
The findings of a Senate inquiry into legislation to control the rising cost of the NDIS are due to be tabled on Tuesday after being postponed twice last week.
Guardian Australia has been told the inquiry will be extended until August 14, allowing extra time for public hearings and the consideration of thousands of applications submitted to senators.
The committee heard widespread concerns from disability advocates, providers and states and territories about Labour’s heavy-handed plan to save $37.8 billion over four years, including tightening eligibility criteria and requiring all participants to undergo independent functional assessments.
The legislation would also give the minister the power to cut entire categories of support, which health minister Mark Butler plans to use to cut off the flow of funding they use to hire support workers to allow participants to engage with the community.
Jordan Steele-John, the Greens’ disability spokesperson, negotiated an amendment that would protect other support categories from the force, including funds for daily living, assisted technology, supplies and home improvements.
The supports people rely on for their daily healthcare needs, getting to medical appointments or going to work will also be protected.
The junior side also received assurances that people would not have to subject themselves to restrictive practices (for example, forced medication) to meet the new requirement that all treatment options be exhausted before they can access the NDIS.
Potential deals between Labor and the Greens will infuriate the Coalition, which has offered to work with the minor party to extend the NDIS investigation by six months in exchange for greater scrutiny of its tax bills.
The government will need opposition support to pass the NDIS after the inquiry publishes its findings in mid-August.
Butler has been contacted for comment.
More details coming soon…
