Introduction

Australia’s taxation system should serve the Australian public, not entrench the wealth and market power of those already best positioned to benefit from it.

Our tax system must be fair, efficient, economically productive, and capable of ensuring that corporations benefiting from Australia’s infrastructure, natural resources, workforce, institutions, and public investment make an appropriate contribution in return.

This policy package proposes a significant rebalancing of taxation and public expenditure. It will provide greater support to households, encourage workforce participation, reform housing taxation, and fundamentally strengthen the public return from Australia’s natural resources.

Particular attention will be given to large corporations and multinational enterprises that possess substantial market power, receive government assistance, benefit from taxpayer-funded infrastructure, or derive significant profits from publicly owned natural resources.

The central principle is straightforward:

Private corporations should be free to generate substantial profits, but they should not be permitted to privatise the gains from public investment while socialising the costs.

Where taxpayers fund the infrastructure, concessions, subsidies, services, or institutions that enable private corporations to generate substantial returns, the public should receive an appropriate return.

Where Australia’s finite natural resources generate extraordinary private profits, a substantially greater share of that economic rent should remain with the Australian people.

Family Income Splitting Reform

Australia’s progressive income tax system is based primarily on individual earnings, while families frequently operate as shared economic units. Uneven income distribution between partners can therefore produce substantially different tax outcomes for households with similar total incomes.

A reformed Family Income Splitting framework will allow eligible couples and long-term partners to allocate a portion of taxable income between spouses for tax assessment purposes.

However, the framework will be deliberately structured to balance household fairness with strong incentives for workforce participation.

Standard Income Splitting

The standard income-splitting benefit will operate at approximately 50 per cent of the maximum transferable amount that would otherwise apply under a full income-splitting system.

This provides meaningful recognition of shared household finances without creating excessive incentives for one partner to permanently withdraw from the workforce.

Eligibility will be based on household income, with greater assistance directed toward low- and middle-income households.

Full standard eligibility will apply to households earning up to approximately 1 times median household income, followed by a gradual taper to approximately 1.3 times median household income.

Maternity Leave Exemption

A specific exemption will apply during periods of maternity leave and primary infant caregiving.

During an eligible maternity or parental leave period, the income-splitting benefit may temporarily operate at 100 per cent of the otherwise available entitlement.

The purpose of this exemption is to recognise that temporary withdrawal from paid employment to care for a newborn is fundamentally different from permanent labour-force withdrawal.

The exemption will ensure that families are not financially penalised because one parent temporarily reduces or suspends paid employment to provide essential early-childhood care.

Once the eligible maternity or parental leave period ends, the standard 50 per cent income-splitting limitation will resume.

Workforce Participation

The reformed system is intended to strike a balance between family financial security and workforce participation.

The policy will therefore favour:

households with genuine caregiving responsibilities;
temporary reductions in employment associated with childbirth and infant care;
low- and middle-income households;
secondary earners returning to employment;
families facing substantial differences in partner incomes.

The objective is not to subsidise permanent non-participation in the workforce, but to recognise legitimate household and caregiving responsibilities while maintaining incentives to work.

Estimated Fiscal Impact

• Standard family income splitting: $6–10 billion annual cost
• Maternity/parental leave exemption: $0.5–1.5 billion annual cost
• Total estimated annual cost: $7–12 billion

Resource Sector and Mining Tax Reform

Australia’s natural resources belong to the Australian people.

Minerals, gas, petroleum, and other publicly owned natural resources are finite national assets. Private companies may extract and profit from those resources, but the Australian public must receive a substantially greater return for the depletion of national wealth.

Resource taxation must therefore account not only for corporate income, but also for the enormous public investment that makes extraction possible.

Mining operations rely on roads, railways, ports, electricity infrastructure, water systems, telecommunications, emergency services, environmental regulation, education systems, skilled workers, courts, planning systems, and other publicly funded institutions.

Where a mining project requires major public infrastructure, the company benefiting from that infrastructure should contribute directly toward its cost.

Resource Infrastructure Contribution

A new Resource Infrastructure Contribution framework will apply to major resource projects.

The framework will assess the public infrastructure constructed, expanded, maintained, or substantially required to support a resource project.

Where infrastructure is built primarily or disproportionately to facilitate private resource extraction, the Commonwealth will have the capacity to recover an appropriate share of that infrastructure cost from the companies benefiting from it.

This may occur through:

infrastructure access charges;
project-specific levies;
long-term contribution agreements;
royalties;
additional resource rent taxation; or
direct public equity arrangements where appropriate.

The principle is that taxpayers should not be required to permanently subsidise infrastructure whose primary economic beneficiary is a highly profitable private corporation.

Estimated Fiscal Impact

• Resource Infrastructure Contributions: $2–6 billion annual revenue
• Additional long-term benefit: reduced requirement for general Commonwealth and state infrastructure funding for resource-specific projects.

Corporate Tax Rate Increase for Large Corporations

The corporate tax rate applicable to large corporations will be increased by 5 percentage points.

The reform will initially operate for a period of between 8 and 20 years, with the precise duration determined according to fiscal conditions, economic performance, investment levels, and government policy.

As the end of the initial period approaches, Parliament will conduct a comprehensive review.

The increased rate may:

expire following the review;
be extended for a further period; or
become a permanent component of the corporate taxation system.

The purpose of the reform is to ensure that highly profitable corporations contribute more appropriately to the public systems and infrastructure from which they benefit.

The policy will be designed to minimise adverse effects on productive investment while preventing Australia's tax base from being systematically eroded by highly profitable corporations with substantial domestic economic activity.

Estimated Fiscal Impact

• Estimated additional revenue: $7–12 billion annually
• Potential 8-year gross revenue at the central estimate: approximately $72 billion
• Potential 20-year gross revenue at the central estimate: approximately $180 billion

Public Investment and Corporate Ownership Framework

Where the Commonwealth provides substantial direct financial support to a major private corporation or project, the public should not automatically receive nothing in return.

A new Public Investment Equity Principle will establish that substantial government financial assistance may, where appropriate, result in proportional public ownership.

This principle will apply particularly to:

major infrastructure projects;
strategic industries;
resource developments;
energy projects;
critical minerals;
nationally significant manufacturing;
projects receiving substantial direct government investment.

Government support will be assessed according to the value of the public contribution relative to the supported asset or project.

Where appropriate, the Commonwealth may receive an ownership interest proportionate to its contribution.

For example, where public funds materially finance the construction or acquisition of an asset, government participation should be considered rather than treating the expenditure as an unconditional transfer of wealth to private shareholders.

This framework will fundamentally change the relationship between government assistance and private enterprise:

If the public assumes a substantial share of the financial risk, the public should have the opportunity to share in the resulting economic return.

Government assistance will therefore increasingly take the form of investment rather than unconditional subsidy.

Estimated Fiscal Impact

This policy should primarily be considered a public balance-sheet reform rather than a conventional tax measure.

• Potential immediate annual budget saving from withdrawn unneeded grants: $1–3 billion
• Potential Commonwealth asset accumulation over 10 years: $5+ billion, depending on the scale of projects supported
• Potential future dividends and capital gains: additional, but not included in the central fiscal estimate

Corporate Subsidies and Government Support

Large corporations will no longer be treated as automatic beneficiaries of government support simply because they are large, strategically important, or politically influential.

All major subsidies, grants, concessions, tax expenditures, infrastructure commitments, and other forms of corporate assistance will be subject to comprehensive review.

The government will establish a Corporate Fair Contribution Framework to assess whether continued public assistance is justified.

Assessment will consider:

company profitability;
market concentration;
market share;
taxpayer contributions;
government assistance already received;
infrastructure provided by government;
employment generated;
domestic investment;
regional economic benefits;
environmental impacts;
strategic importance; and
the corporation's capacity to independently finance the proposed activity.

Where a corporation is highly profitable and possesses substantial capacity to finance an activity itself, government support should face a much higher evidentiary threshold.

Public money should not be used to increase private shareholder returns where the corporation is capable of undertaking the investment without taxpayer assistance.

Estimated Fiscal Impact

• Reduction in inefficient corporate subsidies: $2–5 billion annually
• Reform of corporate tax concessions and expenditures: $3–7 billion annually
• Improved procurement and government-support arrangements: $1–2 billion annually
• Total estimated annual improvement: $5–12 billion

Resource Rent and Mining Reform

The taxation of Australia's resource sector will be fundamentally restructured to capture a greater proportion of extraordinary economic rents.

The reform package will include:

A review and progressive removal of direct subsidies to highly profitable mining, gas, and petroleum corporations.
Removal of tax concessions that cannot demonstrate a clear and substantial public economic benefit.
A 25 per cent levy on gas export revenues, subject to detailed design to prevent avoidance and excessive manipulation of transfer pricing.
A 5 percentage-point increase in the corporate tax rate for large corporations, including major resource companies.
A review and strengthening of royalties and resource-rent taxation.
A Resource Infrastructure Contribution for major projects benefiting from publicly funded infrastructure.
Stronger taxation of extraordinary profits generated during periods of exceptional commodity prices.
Greater transparency regarding government assistance, tax concessions, infrastructure expenditure, royalties, and corporate tax paid by major resource companies.

The objective is not to prevent mining investment.

Australia should remain a major global resource producer.

The objective is to ensure that resource extraction generates a proportionate return for the country whose resources are being depleted.

Estimated Fiscal Impact

Potential mature annual revenue:

• Resource rent and royalty reform: $6–12 billion
• Removal of resource-sector concessions and subsidies: $2–5 billion
• Extraordinary-profit taxation: $4–8 billion
• Total resource-sector reform: $14–27 billion annually

Corporate Taxation and Market Competition Reform

Australia has allowed significant concentrations of economic power to develop across sectors including banking, supermarkets, telecommunications, insurance, energy, aviation, and major infrastructure.

Large corporations benefit from economies of scale, market power, public infrastructure, skilled workforces, and government institutions. Where that power becomes entrenched, the tax system and government policy must not reinforce it.

The government will therefore undertake a comprehensive review of corporate taxation and market concentration.

Key measures will include:

A complete audit of major corporate subsidies, grants, tax concessions, and government contracts.
Greater transparency regarding the total value of government support received by major corporations.
Stronger measures against profit shifting and artificial tax minimisation.
Review of deductions and concessions available to highly profitable corporations.
Stronger competition laws where market concentration produces excessive economic power.
Greater scrutiny of mergers and acquisitions that threaten competitive markets.
Measures to prevent government assistance from entrenching existing market dominance.
Consideration of public ownership or public equity where government investment is essential to the success of strategically important assets.

Corporate success will remain welcome.

However, economic success does not create an entitlement to permanent taxpayer support.

Estimated Fiscal Impact

• Competition-related tax and concession reforms: $2–5 billion annually
• Reduced corporate assistance and market-distorting support: $2–4 billion annually
• Stronger tax-integrity measures: $1–3 billion annually
• Estimated annual fiscal improvement: $5–12 billion

Negative Gearing Reform — Housing Investment Rebalance

Australia's taxation system should encourage the construction of housing rather than disproportionately rewarding competition for existing housing.

Negative gearing will therefore be progressively reformed over an eight-year transition period.

The reform will:

Gradually restrict negative gearing benefits associated with existing dwellings.
Preserve and strengthen tax incentives for genuinely additional housing supply.
Prioritise new construction, purpose-built rental housing, and developments that add net housing stock.
Provide substantial grandfathering arrangements for existing investments.
Phase changes gradually to minimise market disruption.
Review the system regularly to ensure it is increasing housing supply rather than simply increasing asset prices.

The distinction will be between investment that creates additional housing and investment that primarily reallocates existing housing assets.

The ultimate objective is to reduce the tax incentives that encourage speculative competition for established homes while directing investment toward construction and additional rental supply.

Fiscal revenue is secondary to the central objective of improving housing affordability and increasing housing supply.

Estimated Fiscal Impact

• Years 1–3: $0.5–2 billion annual revenue
• Years 4–6: $2–4 billion annual revenue
• Years 7–8: $3–5 billion annual revenue
• Mature annual revenue: $3–6 billion
• Estimated cumulative eight-year revenue: approximately $15–25 billion

Tax Simplification and Closing Corporate Loopholes

Australia's tax system has become unnecessarily complex, while sophisticated corporations and high-income taxpayers can devote substantial resources to tax planning and exploiting inconsistencies.

A comprehensive tax simplification program will:

consolidate outdated and overlapping provisions;
close artificial profit-shifting arrangements;
strengthen multinational tax enforcement;
review deductions, offsets, concessions, and exemptions;
reduce unnecessary compliance costs;
strengthen Australian Taxation Office enforcement capabilities;
improve transparency around corporate taxation;
introduce stronger penalties for deliberate tax avoidance;
ensure tax concessions demonstrate a measurable public benefit.

The objective is not taxation through complexity.

The objective is simple:

Australians and corporations should pay the tax Parliament intends them to pay.

Tax planning that reflects genuine economic activity should remain legitimate. Artificial arrangements designed primarily to avoid taxation should not.

Estimated Fiscal Impact

• Multinational tax enforcement and profit-shifting measures: $3–6 billion annually
• Closure of artificial deductions and avoidance arrangements: $1–3 billion annually
• Reform of inefficient concessions: $1–3 billion annually
• Reduced government and taxpayer compliance costs: $0.5–1 billion annually
• Total estimated annual improvement: $5–12 billion

National Welfare Distribution Reform

A phased reform will consolidate major welfare administration systems—including the NDIS—under a more integrated national public-service framework.

The objective is to reduce administrative duplication and ensure that public funding is directed primarily toward recipients and frontline services.

The reform will:

progressively consolidate fragmented administrative systems;
establish nationally consistent eligibility and assessment standards;
reduce unnecessary intermediary and administrative expenditure;
improve procurement and pricing;
establish integrated digital administration;
strengthen auditing and fraud prevention;
maintain participant choice;
preserve independent oversight and appeal mechanisms;
protect frontline workers and essential services during transition.

The government will distinguish between expenditure that directly improves the lives of recipients and expenditure that primarily maintains unnecessary administrative layers.

Savings should come principally from:

reducing duplication;
improving procurement;
reducing administrative fragmentation;
strengthening pricing controls;
improving fraud detection;
consolidating information systems.

Savings should not be achieved by reducing essential support for people who genuinely require it.

Estimated Fiscal Impact

• Administrative consolidation: $1–2 billion annual savings
• Procurement and pricing improvements: $0.5–1.5 billion annual savings
• Reduced duplication and leakage: $0.5–1.5 billion annual savings
• Welfare administration and systems consolidation: $0.5–1 billion annual savings
• Total mature annual savings: $2–5 billion

Fiscal and Economic Accountability

All major taxation reforms will be accompanied by transparent fiscal modelling and independent evaluation.

Revenue estimates will account for behavioural responses, investment decisions, commodity-price movements, corporate restructuring, employment effects, and changes in taxable income.

Where a reform is projected to generate substantial revenue, the government will publish both:

a central estimate; and
a reasonable range reflecting economic uncertainty.

This is particularly important for resource taxation and corporate taxation, where corporate behaviour and international commodity markets can significantly affect government receipts.

The government will not rely on optimistic revenue assumptions to fund permanent expenditure.

Estimated fiscal impact