Treasury Laws Amendment (Tax Reform No. 4) Bill 2026

Milton Dick

The question now is that the amendment circulated by the member for Kooyong be agreed to.

Member for Kooyong's circulated amendment

That all words after "notes that" be omitted with a view to substituting the following words:

(b) the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and the Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026 have been referred to the Senate Economics Legislation Committee, but this bill has not; and

(c) Schedule 2 inserts a power for the Minister to determine, by legislative instrument, kinds of activities that are integral to R&D, after consulting only another Minister; and

(5) calls on to government to:

(a) refer its bill to the Senate Economics Legislation Committee for inquiry and report, so that provisions of Schedule 2 of the bill can be properly examined; and

(b) require the Minister to consult Industry Innovation and Science Australia, the Commissioner of Taxation, and industry, before making any determination under proposed subsection 355-25(7) of the Income Tax Assessment Act 1997".

Monique Ryan

This amendment is modest, practical and reasonable. The bill removes supporting R&D activities from the R&D tax incentive. R&D activities are the supporting work that makes medical research, engineering and innovation possible. Since the exposure draft of this legislation was released, it's now been garnished with a new power allowing a minister to determine by legislative instrument which kinds of activities are integral to R&D under the R&D tax incentive. This legislative instrument is presumably the government's answer to the concerns raised in consultation regarding the removal of supporting R&D activities. The minister's determination will determine which activities stay inside the incentive and which fall out. It will shape how much support Australian businesses can receive for their research and development.

But under the bill, as it is currently drafted, before making that determination the Treasurer need consult only one person: the industry minister. The minister is not obliged to consult Industry Innovation and Science Australia, the expert board that this parliament established to actually decide what is and isn't research and development. The minister is not required to consult the tax office, which administers the offset and will have to apply whatever the minister determines. The businesses, the scientists, the medical researchers, the academics and the engineers who understand better than anyone in this place what research and development needs will not be consulted on those activities which are integral to their activities. A decision made that way risks picking winners and losers. The industries with the best access to ministers' offices may well see their sorts of activities recognised, but the small manufacturer in a regional town, the startup without a lobbyist and the researcher perhaps working in a hospital or in a university department who doesn't happen to know anyone in Canberra won't be represented, and they won't have a voice. I'm very concerned that this process will just invite lobbying and the corrosion of a process which should be independently adjudicated to reward excellence, not influence.

My amendment will ensure that the definition of R&D activities will be subjected to due process. Before making a determination, the minister should have to consult widely—with the minister for industry, as the bill already provides; with Industry Innovation and Science Australia; with the Commissioner of Taxation; and with any bodies representing relative and relevant industries, along with any other industries and entities that the minister considers likely to be affected. The amendment also requires the minister to publish draft determinations on the department's website and allow for at least 28 days in response in written submissions. My amendment does not stop the government from making determinations, and it doesn't change what the government can put in those determinations. It simply means that those people with the expertise and the knowledge relevant to those decisions are heard before the decision is made, not after.

The government has said that it intends to consult on this instrument. The amendment also ensures that this government and future governments hold fast to that commitment. The R&D tax incentive changes won't apply until 1 July 2028. A 28-day consultation period will not delay this legislation, but it will give businesses planning multi-year R&D programs some certainty about how the rules will be set. The government's own _A__mbitious Australia_ review called for the R&D incentive to be rendered simpler and more predictable for those companies who claim it and who rely upon it. Ministerial discretion exercised without consultation could be capricious, and it could be compromised. Confidence in government decision-making is built on transparency and consultation, and so I commend this amendment to the House.

Tim Wilson

I pick up exactly where the member for Kooyong made her remarks. Her remarks were that this amendment is designed to make sure that there's proper consultation in this legislation and its effect and to not give unrelenting power to the minister. Of course, that has a very good basis. We should see more of that. There's just one fundamental problem, which is that the Australian people were never consulted in this legislation and its development. The Australian people were actually told this legislation was not going to be introduced before the last election. In fact, I believe it was 50 times over, to quote one eminent political figure, otherwise known as the Prime Minister. Now we have this additional tax, this extra tax burden, that is hitting research and development of the future of our country. Speaker, I don't know about you, but I cannot think of anything more outrageous than a direct tax assault on the initiative research basis of this country if we want to have an economy that is global, that is outward looking, that is competitive and has a focus on building the jobs and economic opportunity in the future of this nation. Instead, what we have is the cosy relationship and provision of a gliding pathway by certain MPs, teal MPs, Community Strong MPs—whatever we want to call them—and the government to increase taxes on the Australian people, particularly on research and development businesses.

Milton Dick

The member for Kooyong on a point of order?

Monique Ryan

I understand that the member for Goldstein is enjoying his repeated ad hominem attacks this morning. He's not speaking to my amendment.

Milton Dick

I need you to state the point of order.

Monique Ryan

The point of order is relevance. He's not speaking to my amendment. He's not actually even referring to it.

Milton Dick

I've been very lenient with this consideration in detail because of some of the issues being raised. We're just going to have to return to the standing orders. It is specific. It's not a general debate, as the member for Kooyong is rightly pointing out. If any member wishes to enter the debate, they really—the purpose of this is to go through the detail that is being presented to the House, not to get into a more general debate about the reasons behind the bill or your thoughts on why the bill is there. It's got to be a technical debate. That's the purpose of this. If the member could refer to the clauses within the amendments before the House, I think that would assist the House in this debate.

Tim Wilson

Indeed, we are talking about an amendment to a tax bill specifically related to research and development and the need for consultation. I am agreeing with the proposition that we should have consultation about legislation associated with research and development that directly affects innovative businesses. Part of it is how we got here, the components of the legislation and the practical consequences of their interrelationship. What we know is that research and development communities, exactly as the member for Kooyong has correctly identified, were not consulted and have not been consulted under this legislation into the future. I will accept that point from the member for Kooyong. All I am simply highlighting is the inconsistency in the behaviour to get to that point and that we wish to have consultation into the future under this legislation, like how we would like to have had consultation in the lead-up to this legislation. We know that the practical effect of not having consultation under this legislation is that businesses are going to pay higher taxes, and, if we don't have consultation in the lead-up to the legislation, during the legislation or its implementation or practical consequences, small businesses, innovative businesses, and research and development in this country is going to find it harder to get ahead and build the future economic growth of this country. I am simply stating, for the member for Kooyong's needs, that some of us see that as enormously problematic, and we really would rather, instead of providing amendments to try and cover the tracks of the member for Kooyong and other members, simply oppose the bill.

Milton Dick

The question is the amendment moved by the honourable member for Kooyong be agreed to.