I move that this Bill be now read a second time.
Speaker, this Bill is the next step in our government's delivery of the most ambitious tax reform package for a quarter of a century.
It's all about helping more people to buy their own home, cutting income taxes for workers again and again, and better aligning the treatment of labour and asset income.
It's a package focused on delivering a better tax system for business by encouraging investment and innovation and delivering a simpler and more sustainable system as well.
The Bill being introduced today delivers the next important part of our plan.
It backs Australian businesses and it helps them to succeed.
Our plan is good for workers, good for first‑home buyers and good for the millions of businesses that make such an important contribution to our economy.
It introduces 2‑year loss carry‑back to help encourage sensible risk taking and smooth out difficult periods, and it makes the $20,000 instant asset write‑off permanent to encourage investment and slash compliance costs.
These measures go hand in hand with the steps announced last week, which are all about providing more clarity and confidence to investors, more support for small businesses and more incentives for innovation.
We will extend the eligibility of the 50 per cent active asset capital gains tax reduction to more businesses by increasing the turnover threshold from $2 million to $10 million.
This means all 2.7 million active small businesses and 98 per cent of all active businesses will be eligible for generous CGT concessions.
And we are consulting on the design of a 50 per cent CGT discount for early‑stage investors, including founders and employee share scheme participants of innovative start‑up businesses.
Altogether, we are proposing over $3.8 billion in new measures that lower taxes for businesses, supporting new and growing businesses at critical stages in their life.
Speaker, the reforms in this Bill support resilience, investment and sensible risk taking by Australian firms.
Schedule 1 to the Bill amends the Income Tax Assessment Act 1997 to introduce loss carry‑back for companies with annual global income of less than $1 billion from 1 July 2026.
It enables eligible companies to carry back a tax loss and offset it against tax paid up to 2 years earlier, generating a refundable tax offset.
Schedule 1 applies to revenue losses only and is subject to a company's franking account balance, ensuring refunds are appropriately limited to prior tax paid.
OECD research shows that loss carry back is an effective policy to improve the neutrality of the tax system and increase the resilience of companies to adverse shocks.
By allowing losses to be recognised against earlier profits, loss carry back will be particularly valuable for established businesses that have been profitable in recent years but experience a temporary downturn.
It will also support otherwise profitable small companies that incur a tax loss because they have invested in new assets, including those that are eligible for the permanently extended instant asset write‑off.
This is all about improving cash flow and helping firms remain resilient through periods of adjustment or broader economic shocks.
Loss carry back is expected to benefit up to 85,000 companies each year, mostly small businesses, with the largest impacts in construction, manufacturing, professional and scientific services, finance and insurance, and wholesale trade.
Speaker, the government is also making the instant asset write‑off permanent to give small businesses the certainty they need and deserve.
This is all about backing small businesses, cutting compliance costs and helping them invest with confidence.
Schedule 2 to the Bill amends the Income Tax Assessment Act 1997 and the Income Tax (Transitional Provisions) Act 1997 to permanently extend the $20,000 instant asset write‑off from 1 July 2026.
Up to 4.1 million businesses with aggregated annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000 from 1 July 2026.
The $20,000 threshold will continue to apply on a per asset basis, so small businesses can instantly write‑off multiple assets.
Assets costing $20,000 or more can be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.
The lock‑out rules, which prevent small businesses from re‑entering the simplified depreciation regime for 5 years if they opt‑out, will continue to be suspended until 30 June 2027 so that small businesses can take advantage of the measure.
The permanent $20,000 instant asset write‑off is estimated to reduce ongoing compliance costs for small business by around $32 million per year.
It's part of our plan in the Budget to cut red tape and compliance costs by $10.2 billion a year.
Finally, Schedule 3 to the Bill provides an income tax exemption for income derived in respect of employment with the PNG Chiefs Limited, the new PNG‑based National Rugby League franchise.
This exemption seeks to ensure that income tax exemptions legislated by the Papua New Guinea government for players and staff of the PNG Chiefs Limited will operate as intended.
Schedule 3 is connected to the government's broader strategy to listen and act on the priorities of our alliance partner and closest neighbour - Papua New Guinea - and support rugby league in the Pacific.
The establishment of a PNG team in the NRL is an important symbol of the deep partnership between Australia and PNG. This partnership is underpinned by shared strategic trust and commitment to delivering peace, prosperity and opportunity for the people of Papua New Guinea and Australia.
Introducing these arrangements as part of this Bill will provide certainty and support the effective administration of the tax arrangements PNG has put in place.
Speaker, these are sensible changes and ones I hope this entire chamber can get behind.
But they are changes that took an ambitious Labor government to introduce, and an ambitious Labor government to make permanent.
It was Labor that first introduced the instant asset write‑off in 2011.
And it was Labor that introduced loss carry back at that time as well.
Disappointingly, these important measures to support business were unwound when the Coalition came to office.
It took those opposite years to realise what a mistake they made and bring these measures back, but even then, only temporarily.
Now, we're making both of these tax measures permanent - because Labor backs Australian businesses and is invested in helping them grow and get ahead.
That's what these measures are all about.
That's what our $3.8 billion in business tax relief is all about.
It's what our plan to create a more productive economy, to cut $10.2 billion of red tape, to grow GDP by $13 billion by working with the states, and to encourage innovation and risk‑taking is all about.
We are proud of this Bill and we are proud of our ambitious tax reform package.
And that is why I commend the Bill to the House.
