National

'Poison pill': coalition attacks Labor's tax 'wedge'

May 26, 2026

QUESTION TIME — Prime Minister Anthony Albanese says small businesses will be getting other supports. -AAP Image

The coalition will oppose Labor's controversial budget tax changes, even though it opens them up to another attack by the government for voting against tax cuts.

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Opposition industry spokesman Andrew Hastie accused Labor of "classic wedge politics" for bundling a popular tax offset in the same bill as tax hikes on investors, which the coalition argues is an attack on aspiration.

Mr Hastie said the coalition supported the working Australian tax offset, which will provide wage and salary earners a $250 a year tax refund.

But changes to the capital gains tax discount and negative gearing did not have a mandate, he said.

"Labor is trying to put a poison pill in this bill," Mr Hastie told Sky News on Tuesday.

"The Australian people did not vote for an increase to their taxes, and this is exactly what Labor is going to do.Â

"This is ultimately a vote for more taxes, which is why we will oppose it."

The government is consulting industry groups about potential carve-outs from the new capital gains tax regime for startups, which could face their top marginal tax rate doubling to near 47 per cent when they sell their business.

If Labor MPs were concerned about the community backlash to the tax changes, they did not voice those concerns in a caucus meeting on Tuesday.

Just one member asked about the tax changes, specifically on how the consultation process was going, according to a briefing provided to journalists.

In response, Treasurer Jim Chalmers said the consultation was looking at the treatment of all startups, not just the tech sector.

Asked in Question Time if the carve-out will extend to hairdressers, builders, gyms, pharmacies, vets, dentists, landscapers or childcare operators, Prime Minister Anthony Albanese deflected and said small businesses would be getting other supports.

"Small business are already eligible for four different concessions," he told parliament.

"In addition to that, in the budget, we announced $3.5 billion in new measures that lower taxes for businesses to encourage investment and innovation."

Labor is set to introduce the omnibus tax bill to the House of Representatives on Thursday.

Any amendments carving out startups from the new capital gains regime would be introduced once the legislation is already before parliament.

With the coalition ruling out its support for the bill, Labor will have to count on the Greens to get it through the Senate.

The minor party has indicated it is broadly supportive, describing the changes a "step in the right direction", even though it wants Labor to go further by also scrapping negative gearing and the capital gains discount for existing investors.