Australian news and politics live updates: Taylor fires at Albanese over tax reform

The initial bill is expected to include changes to capital gains tax and negative gearing, forming part of a broader reform package.

Mr Clare said breaking the reforms into multiple pieces of legislation was standard practice for major tax overhauls.

“This will be done in stages,” he told Sunrise on Thursday morning.

“The first bill gets introduced today, but there’ll be a series of bills to implement these reforms, as there always is with big tax reform.”

He said the government’s objective was to deliver income tax cuts for working Australians while also improving housing affordability.

“But the goal here is pretty simple, mate,” he said.

“We want to be able to cut income tax for millions of Aussies who work for a living right across the country.

“We want to make it easier for young people to be able to buy a house.”

Controversial changes to capital gains tax concessions and negative gearing will be introduced to parliament despite warnings they will worsen Australia’s productivity problem.

The proposals to rein in investor tax breaks will be bundled up alongside a $250 a year tax rebate for workers and a $1000 standard tax deduction in a single bill that Treasurer Jim Chalmers will submit to the House of Representatives on Thursday.

The treasurer has said the changes will help level the playing field for many young Australians who have been locked out of the housing market by a system that taxes income earned from labour at a higher rate than income derived from investments.

While the majority of economists and business groups have acknowledged the need for tax reform, and the changes are likely to be passed with the support of the Greens, the government has taken flak in particular for the proposed changes to the capital gains discount.

Rather than confining the change to property and leaving the existing 50 per cent discount for gains made on the sale of shares and businesses, Labor has applied its new indexation regime across the board.

The government has acknowledged that creates an issue for startups, which have a low initial capital base, and is consulting on potential amendments with industry groups, including the Australian Chamber of Commerce and Industry.

The chamber’s chief executive, Andrew McKellar, called on the government to scrap the changes for businesses and keep them confined to housing.

He warned the tax changes will result in less business investment.

“That will be bad for productivity. That will be bad for competitiveness. It will be bad for the future growth of the Australian economy,” he said.

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WA Premier Roger Cook has echoed industry concerns that Anthony Albanese’s sweeping changes to capital gains tax could deter foreign investment in the State’s mining industry.

The Premier is under pressure to intervene from industry groups, who want a carve-out for junior explorers.

Mr Cook said foreign investors were also wary.

“We want to make sure that it doesn’t disincentivise both international investment in our major projects, but also exploration by our small miners,” he said on Wednesday.

The Budget plan to replace the 50 per cent CGT discount with a discount linked to inflation, and a minimum 30 per cent tax on gains, could almost double the tax payable on shares sold after a company makes a discovery.

Mining executives claim it means the risk of investment could outweigh the potential reward.

Mr Cook confirmed several have raised the alarm with him.

“It’s been raised with me by investors, both domestic and foreign, that that could potentially put a disincentive in place for foreign investors who have been central to, particularly for bringing to life some of our big projects, which are fundamental to job creation in WA,” he said.

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Opposition defence spokesman James Paterson has taken aim at the Albanese government for rushing its capital gains tax and negative gearing reforms through parliament, arguing Labor is already acknowledging the legislation will need fixing later.

The Liberal senator criticised the timing of consultation, saying, “Consultation should have been done before the budget, not afterwards, and it should be done before the legislation passes, not afterwards.”

Speaking to Sky News on Thursday, Mr Paterson said Labor was asking Australians to back unfinished policy.

“They’re saying, just trust us, we’ll rush it through now, and then we’ll negotiate with you afterwards to repair the mistakes we’ve made.

“Even they admit their own legislation is so flawed that they will have to fix it in the future.

“Well, that’s an outrageous approach to legislating. It is not in Australia’s national interest. It will harm our economy, it will harm small businesses, it will hurt young people.

“But I understand why they’re trying to do it, because every day this debate goes on, it gets worse for the government. More people speak out, more problems are identified,” he said.

“We’ve now got two Labor premiers on the public record canning Jim Chalmers‘ budget, and Labor MPs are getting very, very nervous, and they should be, because this is doing serious damage to the government.”