I move that the Bill be now read a second time.
Today, the Albanese Labor government is delivering on our commitment to boost innovation and investment through the tax system.
The reforms we are introducing today are part of our comprehensive plan to support businesses and grow our economy.
They are a key part of our ambitious tax reform package which is also making it easier for Australians to buy their first home, cutting income taxes for workers again and again, and better aligning the tax treatment of work and asset income.
Speaker, a thriving private sector is the key driver of economic growth.
Our long‑term growth agenda is built on that fact, and the reforms we are introducing today are as well.
These reforms give the private sector tools and tax concessions to help them succeed in an increasingly competitive world.
The Bill provides more certainty for investors and more incentives for innovation, building on the $3.8 billion in new tax relief and concessions for businesses and start‑ups.
These reforms will mean our tax concessions are targeted at starting a new innovative business and investing in a new build, helping Australians to invest their money, grow their wealth, and boost growth.
Importantly, the Bill also provides more flexibility for businesses to meet tax obligations.
Cash flow is crucial for small businesses which is why we are providing more options to pay tax in a way that works for businesses.
And reforms to better target support for electric vehicle uptake will make existing tax breaks fairer and more sustainable.
Schedule 1 to the Bill implements the Innovative Business Capital Gains Tax concession.
The concession supports early investment in innovative businesses by providing eligible founders, employees and investors with access to a 50 per cent capital gains tax discount on equity investments.
This means early investors in innovative start‑ups that begin with a low or zero cost base still receive a significant discount on a future capital gain.
This will support investment in innovative Australian start‑ups, and the continued growth of Australia's start‑up and venture capital system.
Critical technologies like artificial intelligence, quantum computing, robotics and clean energy will play a critical role in driving our nation's future economic growth, productivity and jobs.
Schedule 2 to the Bill simplifies and refines the Research and Development Tax Incentive to better target government support for business R&D in Australia and drive innovations and productivity gains.
This Schedule simplifies administration and better targets the incentive to genuine innovation, including by increasing core R&D offset rates by up to 50 per cent.
It extends access to the refundable offset for young, growing firms for longer by increasing the turnover threshold from $20 million to $50 million, reduces the R&D intensity threshold so that firms that invest more substantially in core R&D can benefit from higher offset rates, and increases the maximum expenditure threshold.
In addition, the changes in this Schedule recognise the longer regulatory approval processes and product development timeframes of biotechnology and medical technology firms by providing access to the refundable offset for up to 15 years for eligible firms.
Older firms' eligibility for the higher offset rate is maintained through a non‑refundable tax offset.
It also improves integrity requirements around small claims, with expenditure claims below $50,000 requiring a partnership with a Research Service Provider or Cooperative Research Centre to be eligible for the incentive.
This Schedule also introduces an instrument making power to allow a Treasury Minister, in consultation with the Industry Minister, to prescribe eligible R&D activities as being integral to core R&D.
This will future‑proof the incentive and allow governments to modernise the definition of R&D as markets, businesses and technologies evolve over time. Overall, these reforms are expected to lift investment in R&D by young firms by $400 million per year. These reforms form part of the government's response to the Ambitious Australia report.
Speaker, Schedule 3 to the Bill expands the venture capital tax incentives to encourage more investment and support early stage and growth businesses.
These changes increase existing thresholds to reflect modern company valuations. This will allow venture capital investors to invest larger amounts over a longer period in start‑ups that find it difficult to access traditional forms of finance.
Speaker, Schedule 4 to the Bill allows taxpayers required to report and pay Pay‑As‑You‑Go instalments on a quarterly basis to elect to pay on a monthly basis instead.
This will provide individuals and businesses with more flexibility to meet their tax obligations.
It is one of several initiatives we're rolling out that will ensure instalments better reflect real‑time business conditions.
It also empowers the Commissioner of Taxation to require taxpayers with a demonstrated history of non‑compliance to report and pay instalments monthly to strengthen the integrity of the tax system.
Speaker, Schedule 5 to the Bill adjusts the electric car discount settings to ensure it remains fiscally sustainable, incentivises supply of more affordable options, and provides more targeted support for EV drivers.
This measure has been successful in boosting uptake of EVs while reducing transport emissions and contributing towards more fuel security.
The discount has helped take EVs from 1 in every 50 sales when we came to government to roughly 1 in every 8 in 2025.
Now, we are ensuring these settings are sustainable for the future.
From 1 April 2029, a 25 per cent discount for electric cars up to the fuel‑efficient threshold for luxury car tax will be applied to the 20 per cent fringe benefit tax statutory formula rate that applies to all other cars.
The full 100 per cent fringe benefit tax discount will continue to apply to electric cars valued up to $75,000 from 1 April 2027 to 31 March 2029.
All eligible electric cars will retain the fringe benefit tax treatment that was in place when the last relevant commitment commenced.
Full details of the measure are contained in the Explanatory Memorandum.
Speaker, I want to acknowledge the many groups and individuals who have contributed to this Bill.
Like all big tax reform, implementing details relies on constructive feedback and expert insights, and I thank everyone who has helped us to get this right.
There has also been a lot of collaboration among ministers and members of this place on these proposals as well, and I acknowledge their role too.
This is a Bill that recognises the hard work of Australian businesses and helps them to succeed.
It encourages entrepreneurship and economic growth.
The changes are sensible, but they will make a positive difference to the businesses and start‑ups that employ Australian workers and make our economy stronger.
And that is why I commend this Bill to the House.
