‘Avoiding scrutiny’: Coalition and Greens fight to delay Labor’s major budget bills

Labor’s plans to push its major budget bills through parliament by the end of June could be thrown off course as the Coalition, Greens and crossbench negotiate to force longer inquiries that will scrutinise the government’s tax changes and NDIS reforms.

The government is hoping to pass its budget tax package through the House of Representatives on Thursday. It combines into one bill the $250 income tax offset and $1000 instant deduction for workers, as well as curbs on negative gearing and capital gains tax concessions.

But Labor is facing delays in the upper house as senators discuss teaming up to extend parliamentary probes into the new laws – the Coalition wants a longer tax inquiry, while the Greens want more time to investigate sweeping changes to the National Disability Insurance Scheme.

The Greens have told the government that their red line is they do not want the NDIS bill passed in the next sitting fortnight, ending July 2. Labor could therefore volunteer to extend NDIS hearings and avoid the Greens working with the Coalition on a tax inquiry that promises additional political pain. However, any NDIS delays will also cost the budget’s bottom line.

Both bills are central to Labor’s agenda: changes to negative gearing and capital gains on all asset classes are part of a package that will raise more than $80 billion over a decade and shift the housing market, while the NDIS laws enable the government to cut spending by $38 billion over four years.

The government wanted to rush these through by the end of June– particularly the NDIS changes, which allow it to start cutting costs immediately – so each bill has been sent to a Senate inquiry with tight two-day hearing schedules that will report back within the month.

But senators are demanding more scrutiny as elements of both packages meet vehement opposition in certain parts of the community.

While changing the CGT discount for housing has proven relatively uncontroversial, the tech sector, start-ups and small businesses are warning of unintended consequences in making those changes for other assets. The changes will replace the 50 per cent capital gains tax discount with an inflation-based model for all assets except new housing.

Ministerial powers baked into the legislation – which would allow the treasurer of the day to tweak tax settings by giving additional asset classes the 50 per cent discount or redefining new housing – have also prompted claims of overreach.

The NDIS changes are similarly raising alarm in the disability community. The Disability Discrimination Commissioner and the government’s own advisory group have warned that broad new ministerial powers to cut spending risk breaching people’s rights and the process must be slowed down.

The NDIS inquiry, which will hold its two days of hearings next week, has received more than 4000 submissions.

Independent ACT Senator David Pocock on Thursday morning said it was the Senate’s job to make sure the legislation was right as he accused the government of “actively avoiding scrutiny”.

“I’ll be working with all of my colleagues on this, scrutinising the detail, doing the job that people elect the Senate to do to actually make sure that these changes make sense, that we are minimising unintended consequences and getting it right,” he said.

“The government has tried to stitch up a really short student inquiry process that doesn’t cut it. These changes are complex, they do need time, and we should be looking at the impact on things like startups and small businesses.”

Labor tried to wedge its opposition by grouping all elements of the budget tax package into one bill – forcing the Coalition to vote against tax cuts for workers if it wanted to oppose the broader tax reforms.

But Pocock will push for Greens, Coalition and crossbench senators to use their collective majority and override Labor in the Senate by passing three elements – the tax offset, instant deduction and negative gearing – while withholding support for the capital gains element.

If successful, this would derail Labor’s plans by removing a wedge for the Coalition and spurring a greater debate about carve-outs and concessions.

“I think the Senate should do its job and actually split this bill – split off the broad changes to all asset classes, when it comes to CGT, send them to Senate Inquiry,” Pocock said.

Opposition Leader Angus Taylor on Thursday said the Coalition would work “with whoever we can… to stop toxic taxes”.

“The question is whether there’s going to be a dirty deal done here between Labor and the Greens. We know what the Greens want to do, they want to get rid of all the grandfathering on this. They want a much bigger tax hit on Australians,” he said.

“The Greens have an opportunity here, though, to stop this legislation, and we’ll work with whoever we can to stop this toxic legislation getting through the Parliament.”

The Greens last week said they would interrogate why the government’s tax changes were being grandfathered, but are still likely to support the tax overhaul.

The Coalition says Labor has mishandled the NDIS reform process but has promised bipartisanship on spending cuts.

Still, sending the bills to longer inquiries will give each side longer to scrutinise the laws, propose amendments, and signal to their voting base.

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