Pressure is mounting on Treasurer Jim Chalmers as crossbenchers and the Coalition push to strip back sweeping ministerial powers in Labor’s tax reforms. Greens and Coalition MPs have raised fresh concerns about the tax overhaul, warning the legislation gives the Treasurer “Henry VIII powers” to alter key parts of the regime after it passes parliament.
Dispute Over Ministerial Discretions
At the centre of the dispute is a set of provisions in Labor’s proposed changes to capital gains tax and negative gearing, which allow Treasurer Jim Chalmers to adjust key elements of the reforms after they pass parliament. While the government passed the bill in the House without amendment, it will face severe opposition from both the Coalition and the crossbench in the Senate. The Coalition says the powers go too far, while the Greens argue they undermine parliamentary scrutiny and could allow major changes to be made without a full legislative process.
Coalition Criticism
Shadow Defence Minister James Paterson said it was significant overreach by the Treasurer. “He knows he’s completely stuffed this up. And he’s asking the parliament to let him mark his own homework,” he said. Mr Paterson said parliament should not surrender its authority to a minister, particularly given the scale of the proposed changes. “He wants to be able to just change it a little bit after it passes through parliament, and effectively take on the power of the parliament himself. These are god-like powers that no one in the parliament should grant a minister like Jim Chalmers.”
Mr Paterson noted that even concerns from the Greens showed the scale of the issue now emerging in the Senate. “They’re in principle in favour of higher taxes, particularly on capital gains and of other things, but they also defend the principle of the parliament. The parliament should not lightly give away its power to legislate to a minister like Jim Chalmers.”
Government Defense
The government has rejected the criticism that the bill gives the Treasurer the ability to make significant changes without returning to Parliament. Mr Chalmers insisted the use of legislative instruments was standard practice in major tax reform and had been used under governments of both political persuasions. Mr Paterson said the comparison was misleading. “It was not done for something as contentious and consequential as this. Normally this is just tiny little tweaks here and there in the application of legislation, but actually fundamental questions haven’t been answered about this bill.”
“The fact that they are rushing it through the House in two days ... they’re going to guillotine the debate to prevent people from asking legitimate questions. They want to rush it through a Mickey Mouse Senate inquiry and they want this done and dusted by the end of the financial year,” he added.
Greens’ Position
The Greens argued the measures effectively hand the Treasurer the ability to rewrite parts of the law after it is passed. Greens Senator David Shoebridge said the mechanism amounted to what is described as “Henry VIII” powers. “You can call them god-like, but the term politically is like Henry VIII powers, the ability to rewrite the laws that have been passed by Parliament,” Mr Shoebridge told Sky News. He said the Greens wanted closer scrutiny of the legislation before committing their support. “It’s a real issue for us that the government has put like a secret backdoor in their legislation to literally undermine any of the very minor changes that they’re putting to tax wealth.” Mr Shoebridge said the Greens were still considering their position as scrutiny of the bill intensifies.
Specific Ministerial Discretions
CPA Australia revealed the legislation contains nine separate ministerial discretions. They include determining what qualifies as a new dwelling under the government’s negative gearing changes, as well as setting rules around housing-related definitions that could affect how the reforms operate in practice. The legislation also gives scope for ministerial determinations on the application of the apportionment method used for capital gains tax calculations and on whether additional classes of assets can continue to access the 50 per cent CGT discount. Other powers cover exemptions from Labor’s proposed minimum 30 per cent capital gains tax rate for certain recipients of income support payments. A separate determination relates to the government’s Working Australians Tax Offset.
Government’s Broader Aims
The government has defended the broader package as a way to better align investment tax settings and improve housing affordability. Mr Chalmers dismissed the outcry against the major tax overhaul as “lies” and scare campaigns.
